Even as the Australian Prime Minister Julia Gillard called for a leadership vote on Thursday, one economist told CNBC that the Australian economy faced greater risk from high levels of household debt than from any political uncertainty.
"The domestic risks are way beyond politics," Luca Silipo, Chief Economist for Asia Pacific at French investment bank Natixis said.
"It's the fact that Australia unlike other countries in which household debt was a worry, did not go through complete deleveraging... Australian households are still as much in debt as they were in 2007."
Silipo adds that it is worrisome that Australia has not gone through any deleveraging given the threat of a global slowdown.
The country's household debt have been around 150 percent of disposable income since 2006, according to the Reserve Bank of Australia.
According to Silipo, factors like China's slowing growth and domestic concerns like a slumping real estate sector and accelerating inflation are bigger economic risks for Australia than any political crisis.
Foreign Minister Kevin Rudd's resignation on Wednesday, followed by Prime Minister Julia Gillard's call for a leadership vote to be held next week also had little impact on Australian equity and forex markets on Thursday.