A primer on Australia’s general election

The upcoming federal election on 3rd May appears likely to result in a hung parliament. Although the ruling Labor party’s recent uptick in the polls suggest that it is in pole position to form a minority government, we wouldn’t count out the Liberal/National Coalition just yet. If the opposition were to come to power and implement its plans for spending cuts and stricter migration controls, it would likely result in lower inflation and interest rates relative to our baseline forecast.