The political environment in Australia is tense, even as the Liberal Coalition claims victory by the slimmest of margins. How the corporate landscape will be impacted by the outcome is merely a guessing game.
It’s been something of a topsy-turvy year, and couple of months in particular, for political uncertainty around the world. The on-going US election campaigns ahead of the November election have polarised opinion, while in the UK the Brexit vote has individuals and organisations alike trying to uncover the full extent of the changes.
And while there is likely to be more instability in the coming months, the ongoing uncertainty around the Australian election has the business community and procurement leaders watching with baited breath, given that what elements of business trade could be impacted by this is anyone’s guess.
With 80 per cent of the vote counted, we do know that Malcolm Turnbull will be returned as Prime Minister, after opposition Leader Bill Shorten admitting defeat on Sunday, according to recent media reports.
The Liberal Coalition is expected to win just enough seats (76) to form a majority government. But the rest of the line-up could take weeks to finalise. And Turnbull has an uncertain and challenging year ahead, as he faces difficult negotiations with independent members of parliament, a hostile Senate, and potential mutiny within his own party.
The election was held against the backdrop of a particularly complicated political environment. Laura Tingle, the Australian Financial Review political editor, helped to outline why in her keynote address to the Asia-Pacific CPO Forum in Melbourne earlier this year.
Back in 2013, Australian voters wanted to get rid of the Labor government, with many viewing it as a “soap opera“, as Julia Gillard first took over from PM Kevin Rudd in 2010, before being challenged by Rudd twice, resulting in Rudd leading Labor again at the 2013 election.
However, Tingle explained that the ‘coup’ in 2013 from Rudd isn’t the only reason the electoral situation was in flux.
“Voters have been utterly disappointed by the Coalition under Tony Abbott, and confused and angered by what has happened since Malcolm Turnbull took over,” she says.
The highly respected journalist and political commentator told forum attendees that it’s rare for there to be a uniform swing across seats in an election, and that she can’t think of an election where there are so many unknown factors at play that could create wild outcomes.
For example, the Melbourne seat of Batman, once considered technically the safest Labor seat in Australia (with margins of 21 per cent), was only just held by Labor during the election. The significant change is due in part to rapidly changing demographics in the seat.
In addition, there was a lack of clarity in the state of Queensland as to how the votes would be cast, with independents including the hard-right Pauline Hanson picking up support from dissatisfied voters.
Political Instability Ahead
Tingle argued that Australia was heading into a period of instability.
“When I say ‘uncertainty’, I mean it in the sense that we really don’t known what the election outcome will be if we judge it purely by the numbers.”
Prior to the election, the question was really about whether or not the electorate really wanted yet another change in prime minister.
“Ironically, I think it is the Coalition – the current government – which is more of a policy unknown that the Labor Party.
“The Coalition has been thrown off course in the last couple of years. First by its political incompetence and lack of policy savvy. The 2014 budget has become the byword for this, but there was much that proceeded it in terms of policy towards business even before the budget was brought down,” she says.
Complex Issue Resolution
Even if the government is returned to power, and it looks likely that it will happen, Tingle argued that the major issues, such as health funding, schools funding, and universities funding, would have to be sorted out one at a time, due to the complexity of the issues in the political environment.
“None of this, in reality, leads you to think that either side of politics can have a real breakthrough moment. There has already been a lot of commentary to the effect that much will depend on the size of the majority Turnbull is able to command in the House of Representatives.”
The most basic measure Tingle has learned covering politics and policy making for so long is the capability of politicians to react to the issues of the day.
“When I say that, I mean it is assessing what you believe their underlying capability is to deal with the stuff that comes along every day when governing a country, rather than the set piece policy positions you draw up beforehand.”
However, it’s not all bad news, particularly from the point of view of public sector spending and government procurement. Even in the midst of the political upheaval and turmoil, it appears to be a case of “business as usual” for procurement.
The Federal Bureaucracy, which is unelected, and as such unaffected by the election until a result is declared, has assured people that the chaos is mainly isolated to the parliament itself.
They have stated that since the election, there have been a large number of state and local government authorities calling for tenders, announcements of grants, and new public works projects. In addition to this, there are tender notices still being issued for on-going projects, suggesting that business will continue however the final few seats fall.
What are your thoughts on the Australian elections? How will your business be impacted by the political uncertainty?
Meanwhile, we’ve been keeping track of the all the major procurement and supply chain news headlines this week…
China Cosco to invest in Port of Piraeus
- One of the largest seaports in the world, the Port of Piraeus, was sold to China Cosco Shipping Corporation for €368.5 million in April this year,
- The deal represented a major privatisation and was a central plank of the €86 billion bailout deal agreed with Eurozone partners.
- This week, China Cosco announced its plans for the site, including an investment of over €500 million in the port over the next five years. The company will focus on developing the cruise and shipbuilding industry.
- Chinese president Xi Jinping said this week, “We are certain that Piraeus will open new prospects for the broadening of Greece-China cooperation in transport, infrastructure, telecoms and shipping”.
Read more at the Wall Street Journal
Estonian Startup Tests Robot Package Deliveries
- Robot maker Starship Technologies has launched a test programme for their self-driving robots.
- The test will involve the robots delivering packages, groceries and goods in the UK, Germany and Switzerland.
- The robots drive autonomously in a 2-3 mile radius and are monitored by human operators.
- Rolling on six wheels, the robots find their destination using GPS, radar and camera, and are able to navigate around obstacles and follow traffic rules. Customers open the secure compartment to access the delivery using their phone.
Hackers Use Social Media for Identity Theft
- The number of victims of identity theft in the UK rose by 57 per cent in the past year, with more than 148,000 victims in the UK in 2015.
- According to Cifas, the fraud prevention service, hackers are now using social media sites like LinkedIn and Facebook to harvest information on individuals.
- Names, addresses, dates of birth, and names of banks are some of the information fraudsters are able to piece together from social media profiles.
- Cifas has urged individuals to look at what information their profiles have on them, and to ensure that security settings on all networks are correct.
Read more at The Telegraph
Hyperloop “Proves” Cost Effectiveness
- Hyperloop, the high speed transport solution and brainchild of Elon Musk, has released a feasibility study which makes the case for the affordability of the system.
- The study examines the cost of connecting Stockholm and Helsinki using Hyperloop, and compares it to California’s high-speed rail project.
- Hyperloop estimates this project to cost $40 million per km, while the rail project is estimated by The World Bank at $56 million per km.
- The report is considered a significant step in proving the validity of the Hyperloop concept, with the technology due for its first test before the end of the year.
Read more at Engadget