Saturday, August 21, 2010

Australia Following Britain?

This seems to be the year of "hung parliaments" (where neither of the mayor parties-or coalitions will get a majority) as it increasingly looks as if Australia will like Britain get it . And as I mentioned before, this outcome could very well happen in Sweden as well in next month's Swedish elections.

Anyway, returning to Australia, it seems more likely that Labor will form a minority government than that the centre-right coalition of Liberal and National Party will do so. The reason for that is that the Independents which hold the balance of power in the House have said that they will side with whoever has the best chance of forming a stable government. And since the Greens hold the balance of power in the Senate and since the Greens presumably are more inclined to support Labor that would probably mean Labor.

However, with Greens and Independents being necessary to make future decisions, the ability of Labor to push through major changes will probably be constrained. While the Greens will presumably support taxation of mining (including coal mining) and Australia's version of the "cap and trade" scheme (two policies which would both be destructive to the Australian economy), it remains to be see whether the Independents (most of whom have a background in the National Party) will support it.