The ASX's largest blue chips face the possibility of huge fines with Labor planning to increase the potential penalties that businesses can receive for civil offences, according to the AFR.
Labor has suggested that it would get rid of the $210 million limit for corporate civil offices. Instead, Labor is suggesting that businesses that break the law could face a maximum fine of up to 10% of revenue.
That would mean that some of the biggest companies could face the biggest fines. Businesses like Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW), Telstra Corporation Ltd (ASX: TLS) and Westpac Banking Corp (ASX: WBC) could all theoretically face multi-billion-dollar fines.
For those investors thinking large fines would be unlikely, you just have to consider that Commonwealth Bank of Australia (ASX: CBA) has already been fined $700 million by AUSTRAC.
Labor was the party to insist on the Royal Commission and it is seen as more combative to big business compared to the Liberal Party.
It's up to each voter to decide if this is the right thing to do or not, but it's certainly something that investors need to be wary of.
The largest businesses make the best political targets. They're the ones that most of the public use and make the biggest profits, even if they don't have the biggest profit margins or the highest market share out of all ASX shares.
It's one of the main reasons why I'm avoiding buying other shares that are in the political spotlight like AGL Energy Ltd (ASX: AGL) and Estia Health Ltd (ASX: EHE). I think there are better investment opportunities out there compared to the ASX 20 shares.
