How Will The Australian Election Affect The ASX200?

The Australian election has been called for 18 May 2019, how will it affect the ASX200 (XJO)?

Prime Minister Scott Morrison has called the Federal election for just over five weeks ago, so the political parties will go into overdrive talking about how bad the other side is and how much better their own policies are.

Queensland and Victoria will be key election battle states, so you can imagine that a lot of political attention will be focused there over the next month.

What are some of the potential outcomes on the ASX200?

During (and before) the Royal Commission the Labor Party was making noises about how they would apply the right regulations and punishments on the big ASX banks of National Australia Banks Ltd (ASX: NAB), Westpac Banking Group (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA), as well as AMP Limited (ASX: AMP).

If Labor win, we’ll find out how much of that was political point scoring and how much of that was serious.

Labor has said it will reduce negative gearing, which could have a short term impact on construction/property businesses like Stockland Corporation Ltd (ASX: SGP), Mirvac Group (ASX: MGR), DuluxGroup Limited (ASX: DLX), Harvey Norman Holdings Limited (ASX: HVN), CSR Limited (ASX: CSR), Brickworks Limited (ASX: BKW) and Adelaide Brighton Ltd. (ASX: ABC).

However, both political parties are promising to spend on an infrastructure extravaganza, which should be a boost for Adelaide Brighton, Cimic Group Ltd (ASX: CIM) and Lendlease Group (ASX: LLC).

Energy companies could come under further pressure to reduce prices for households that are doing it tough amid almost record-high energy prices. AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG) are two of the ones I’m thinking of.

If Labor win, which seems the most likely outcome, there are quite a few ASX200 shares that could be affected.

That’s why I think it’s better to own shares that are less likely to be affected by political changes such as the exciting growth shares in the FREE report below.

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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

Jaz Harrison

Jaz Harrison

Jaz is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.