What the election outcome will mean

Australian banks and superannuation funds look set to emerge as major beneficiaries of the re-election of a Labor Government because of the Australian Labor Party’s policy to lift the superannuation guarantee to 12 per cent, according to new analysis released by UBS Wealth Management.

The analysis, which examines the market consequences of the various election outcomes, has defined superannuation, the mining resources rent tax and infrastructure spending as being the key points of difference between the major parties.

At the same time, it has warned of the market consequences of a hung parliament, pointing to recent experience in the United Kingdom, where the market fell 13 per cent.

However, it said that with respect to Labor’s superannuation policy, the likely beneficiaries would be the managers of superannuation funds such as AMP and, additionally, the Australian banks as they placed emphasis on growing their in-house wealth programs.

On the question of the mining resources rent tax, the UBS analysis said it could result in a mild recovery in mid-cap resources shares as the uncertainty currently surrounding the tax clears. However, it said that in the event of a Coalition victory and the scrapping of the tax, mid-cap miners would be major winners.

The UBS analysis also looked at the likelihood of the Greens holding the balance of power and warned that the miners would almost certainly fare worse under any mining tax designed in part by the Greens and that the resources sector would be strongly impacted by the introduction of a carbon tax.