Prime Minister Malcolm Turnbull in Launceston. Photo: Andrew Meares Opposition Leader Bill Shorten in Darwin. Photo: Alex Ellinghausen
Australia votes July 2: Full coverageBrexit campaign wins: Britain votes to leave EU$50b wiped off ASX, pound crashesBrexit to hit Australia as world becomes fragmented, experts warn SCOPE. Weaker growth, falling living standards says forecasting panel
The global jolt caused by Britain’s vote to leave the European Union has redrawn battlelines in Australia ahead of the final week of the federal election campaign, catapulting concerns over global disruption and economic stability to the forefront of the agenda.
As world markets plummeted and British Prime Minister David Cameron resigned, both major parties sought to turn the tumult to their advantage, claiming they were best placed to steer Australia through the global headwinds.
On Friday, Prime Minister Malcolm Turnbull described Britain’s EU departure as a “momentous and historic decision”.
He said Australians would be concerned by uncertainty and instability in global markets, including a fall in the Australian dollar.
However, Mr Turnbull insisted “there is no cause for Australians to be alarmed by these developments”.
“It is important to remember that the Australian economy is strong and resilient and has weathered global shocks before and weathered them well,” he said.
Many expect the global economic upheaval to work in favour of the Coalition, which is traditionally seen as the stronger economic manager. However Labor also sought to highlight its economic credentials on Friday by pointing to its experience guiding Australia through the global financial crisis, and saying that its proposed budget repair measures such as negative gearing reform would aid Australia’s response to the global turmoil.
Britain’s vote has cast the spotlight onto how well Australia can withstand short to medium term volatility in markets and currencies, and fuelled debate over each party’s plans for economic growth and returning to surplus.
Mr Turnbull said Britain’s exit could take several years to finalise, and Australia’s relations with both Britain and Europe would remain strong.
Australia was negotiating a European free trade agreement and had “built strong ties with the countries of continental Europe, in particular France and Germany”.
However the instability meant Australia “needs a stable majority Coalition government with a strong economic plan that sets Australia up for a prosperous future,” he said.
That plan should “take advantage of those opportunities and resiliently meet the challenges and the headwinds that we cannot always anticipate and that we cannot always influence”.
It was the Coalition’s preference that Britain remain part of the European Union.
Labor leader Bill Shorten said Australia’s economic fundamentals were “solid and not changed by this referendum whatsoever”.
“Share markets go up and down all the time. That’s not an argument to not change a government. The argument about changing the government goes down to the economic fundamentals and the economic plan,” he said.
Earlier in the day, he said the Brexit vote showed the need for “a long-term plan for transitioning Australia from the mining boom”.
“That’s why our long-term economic plan is the right plan for Australia,” he said.
“Labor’s got a plan to make sure that whatever happens in the world, we’re building sustainable, organic, domestic propositions which will see the Australian economy growing. We’ll keep generating the sort of jobs so fundamental to economic prosperity.”
Treasurer Scott Morrison said the result in Britain reinforced the need to ensure political stability in Australia and “keep the settings that we have”.
“The shocks of things like massive changes in our property market as Labor is proposing – negative gearing and increasing capital gains tax – that increases the risk. What we are doing with our plan is to decrease the risk,” he said.
Mr Morrison said the government’s plans for economic growth, which include a $48 billion corporate tax cut, would drive private investment, jobs and competitiveness.
He predicted that Australia and Britain would embark on free trade negotiations. However Fairfax Media understands this will not be a possibility for many years because Britain will first have to renegotiate its membership of the World Trade Organisation as an individual member – an unprecedented process.
Australia’s focus will rather be on reassuring its own trade markets in what could be a turbulent period ahead.
Ahead of the result, Labor’s shadow treasurer Chris Bowen predicted the effects of global uncertainty on Australia would be limited, but said his party “has experience and a track record in the most uncertain global times of the last 80 years,” in reference to the global financial crisis.
“Difficult” Labor decisions such as proposals for negative gearing and capital gains tax reforms would “build very strongly, over the next few years, a very significant medium term repair to the federal budget,” he said, adding that the Coalition’s proposed corporate tax cut was “the biggest impact on growing budget deficits”.
Foreign Minister Julie Bishop told Fairfax Media that the decision was “a devastating blow for those who were seeking Britain to remain [in the EU].”
– With David Wroe and Deborah Snow
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This story Administrator ready to work first appeared on Nanjing Night Net.