As most of us would be aware of by now (thanks to those pesky ads we are seeing everywhere), the current Federal election campaign is well underway.
In fact, we are now, mercifully, less than a fortnight away from polling day on 3 May.
Unlike the 2019 election, which saw extensive debates around changing the existing arrangements on investing tax breaks such as negative gearing, franking credits, and the capital gains tax, the 2025 election campaign has been decidedly tamer on the investing front.
As it currently stands, the campaign has been dominated by other issues such as the cost of living, Medicare, energy, and foreign relations.
Neither of the major parties has offered up any substantial changes to our investing framework or tax regime this round.
But that's not to say that no changes will eventuate after the 3 May poll. Opinion polling indicates that it is a real possibility that neither the Labor Party nor the Liberal/National Coalition will win the 76 seats needed in the House of Representatives to form a majority government.
If that indeed occurs, one of the parties will have to negotiate with crossbench MPs, such as Greens or teal independents, to form a minority government. And if we do end up with a 'hung parliament', all bets are off.
Renowned economist at AMP, Shane Oliver, recently released a newsletter discussing the election and its impacts on the share market. Let's dive into some of what Dr Oliver had to say.
Image source: Getty Images
Federal election: What does it mean for ASX investors?
Oliver starts off by noting the following:
Australian election campaigns tend to see uncertainty driving weak gains for shares, followed by a bounce… Labor is offering more of the same whereas the Coalition is offering smaller government albeit without much detail… A hung parliament & minority government is the biggest risk.
He goes on to note that shares have historically returned more under Coalition governments (an average of 12.9% per annum) than Labor governments (9.7% per annum). Saying that, Oliver does point out the caveat that both the Whitlam and Rudd governments came to power in the wake of major financial shocks, and that the markets averaged an impressive 17.2% per annum during the Hawke/Keating era.
Going forward, Oliver notes that the Labor government is "offering a continuation of bigger government, a higher tax share to eventually balance the budget, industry policy like 'Future Made in Australia' and more regulation". However, he points out that the Liberal/National Opposition has committed to matching most of Labor's significant promises if it comes to power.
In conclusion, Oliver posits that "the relatively modest difference in economic policies between the Coalition and Labor suggests minimal impact on investment markets if there is a change of government".
He argues "the main risk for investment markets may come if neither side win enough seats to govern, forcing a reliance on minor parties or independents, further delaying productivity reforms and in the case of a minority Labor government forcing it down a less business friendly path".
Let's see what happens on 3 May and beyond.
