Investors support, warn Gillard
Australia's first female Prime Minister, Julia Gillard has won the support of investors, but with a caution that any postponement to a compromise agreement with miners over the RSPT would stoke an investor revolt.
Results in the latest Investor Pulse survey, a joint venture between market research group Colmar Brunton and BusinessDay, show that 51 per cent of investors believe Gillard can negotiate a deal that is both beneficial to taxpayers and acceptable to the miners. One-third did not think a satisfactory agreement could be reached, while another 16 per cent from a sample of 2000 investors were uncertain.
But the stakes are high for the government with the new prime minister having limited time to put things right. Based on the survey, most investors see it unacceptable that the resource tax debate be settled after the election. Only one-fourth of investors agreed it was okay to delay the compromise deal and a few remained unsure.
From a more general perspective, the survey suggests Gillard faces a credibility shortfall with investors on two fronts. First, when quizzed if Gillard was "a safe pair of hands" for the economy, 42 per cent answered no, 34 per cent said yes and 24 per cent were undecided.
Closing this gap may be harder with the retention of Treasurer Wayne Swan, whom 50 per cent of investors believe should not have been promoted to Deputy Prime Minister after the party room spill of Kevin Rudd as leader and prime minister last week.
Second is her history of trade union involvement. Almost half of investors worried about it, particularly with reference to any potential lessening of the Australian Building and Construction Commission's powers.