Australia’s Liberal-National coalition, which has vowed to scrap the Labor party’s planned mining tax, may be able to form a minority government after last weekend’s poll, Goldman Sachs & Partners Australia Pty said.
“While clearly it is too early to call who will be able to form a minority government, the probabilities ever so slightly favor the coalition at present,” Goldman Sachs’ Melbourne-based chief economist Tim Toohey said in a report yesterday. It will be difficult for Labor to secure the support of independent lawmakers needed to form government, he said.
Australia’s closest election in 70 years left Labor Prime Minister Julia Gillard, who’s reiterated her commitment to the 30 percent tax on iron ore and coal, and opposition leader Tony Abbott competing to woo a handful of independents to form government. Four seats are too close to call with counting of up to 1 million postal votes set to begin tomorrow.
“We anticipate that based on the coalition’s narrow lead in the seat of Hasluck, the three independents’ rural background and their conservative leanings, that a minority coalition government appears the most likely result,” UBS AG analysts led by Scott Haslem said in a report yesterday.
Abbott has promised to scrap the mining tax and repay government debt more quickly than the Labor Party. Gillard has vowed to support a compromise deal made last month with BHP Billiton Ltd., Rio Tinto Group and Xstrata Plc that reduced the rate to 30 percent from former premier Kevin Rudd’s proposed 40 percent and limited the levy to iron ore and coal projects.
“It would seem unlikely that the independents would support the policies of the ALP, which include a mining tax and emissions trading scheme that would be unpopular with their rural constitutents,” Goldman Sachs’ Toohey said. The broker estimates the tax will strip as much as 3 percent from the valuation of the major mining companies.
The three independents Tony Windsor, Bob Katter and Robert Oakeshott, are scheduled to hold talks in Canberra today.