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CCTV Script 05/07/16

– This is the script of CNBC's news report for China's CCTV on July 5, Tuesday.

Welcome to CNBC Business Daily, I'm Qian Chen.

Australia's federal election on Saturday has yet to produce a winner but regardless of the outcome, a period of political uncertainty risks confidence, efforts at budget repair as well as key pension and property reforms.

Neither major political party has secured the 76 of the 150 seats in the House of Representatives, as the lower house of parliament is known, that are needed to form a majority government. With 80 percent of the vote counted as of Monday morning, the Coalition had 65 seats, the Labor Party had 67, other parties had five seats and there were 13 undecided seats. Counting was set to resume Tuesday but strategists were increasingly warning of a "hung parliament" scenario, where neither party could govern with a majority.

"Whichever party forms the government, the lack of a strong majority (or maybe governing from minority) is likely to make a reform agenda more difficult," Paul Bloxham, HSBC's chief economist for Australia and New Zealand, summed up.

Current political instability could extend for months and another election later in the year couldn't be ruled out, which may hit overall spending by households and businesses, observed Goldman Sachs. IG market strategist Angus Nicholson echoed the warning, saying that a hung parliament's ability to carry out any major reforms to superannuation, negative gearing or corporate tax rates was low, which meant consumer and business confidence could be at risk.

Many have also predicted Australia's sovereign AAA credit rating, ranked as stable, would be placed on negative watch following the weekend's election.

[PAUL GRUENWALD | Asia-Pacific Chief Economist, S&P Global Ratings] "I don't want to touch the rating, but more of the macro story. the macro story in Australia is one that we're watching. that's the one economy in the region that's going to have the most adjusting around China. australia's going to have to become a services exporter rather than a mining exporter, it's happening at a slow rate so far, that's feeding into the fiscal and that's a good thing, but we're going to see it from the macro side."

The Reserve Bank of Australia is expected to announce their decision on interest rates at 12:30pm on Tuesday.

CNBC's Qian Chen, reporting from Singapore.

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