"Whoever wins it means that the risk of a sovereign credit rating downgrade has increased further," he said, in a view echoed by leading independent economist Saul Eslake. "Australia is one of only a handful of nations to hold the top AAA credit rating from all three major agencies, having dodged recession during the global financial crisis.They have yet to pass judgement on the weekend polls but Oliver said political uncertainty never boded well. "Even if the coalition does win government it won't have control of the Senate with the balance of power remaining with the Greens and minority parties which will act as a huge constraint on the government," said AMP Capital chief economist Shane Oliver. A similar scenario is forecast for the upper house Senate, which does not bode well for getting legislation passed, potentially causing policy gridlock.Economists said this could stymie efforts to rein in debt and deficits, undermining business and consumer confidence with repercussions for the economy. "The end result will be poor prospects for getting government spending and the budget deficit under control over the next three years and for the coalition implementing its policy to cut corporate taxes let alone undertaking serious productivity enhancing economic reforms.

Source: Economic Times July 04, 2016 03:15 UTC