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Shakespearean guidance

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When PM Kevin Rudd gets over his number one Aussie persona, which he had publicly for a day on 26 January, he will have to put his mind to what lies ahead for him and his party during this election year. And he might reflect on a bit of Shakespeare if he wants some guidance for his decision-making.

Bad policy decisions could answer the question: “To be or not to be Prime Minister?”

Looking at the way Malcolm Turnbull fell on his ETS sword and how the ‘mad monk’ Tony Abbott rose from the ranks to take the Opposition’s crown, which most thought would rest upon the head of ‘Sir’ Joseph Hockey, all had the makings of a modern day Shakespearian play.

For Malcolm, the play might be called 'A Midsummer Nightmare', while for Big Tony, it might be tagged 'Much Ado About Something'.

Inroads

What is really interesting is Abbott and his party are making inroads and could be a force at the election, especially if Rudd lets hubris get in the way of smart policy.

Until Malcolm retreated to the backbench, Labor looked a complete shoe-in to win the next election and still must be favourite to retain Government. But the embarrassment of Copenhagen, the question marks over climate science, the changes to workplace laws that will shock small business owners, and rising interest rates will keep the Abbottonians in the game.

The chant from the Opposition this year will be: “The excessive stimulus has caused the rapid rise in interest rates.” And, despite the fact that Labor’s policies were right for the time and we were the best-performing developed economy avoiding a recession, a year and half of rising interest rates can annoy voters.

However, there are other worrying Labor issues that could spook voters and investors.

Share price drop

This is where Shakespeare really comes into my story.

On my Sky News Business program, SWITZER, a number of my expert guests have tipped a company called McMillan Shakespeare as a great stock to have in your portfolio. That said, many of my great guests did warn that the Henry Tax Review could affect the company.

McMillan Shakespeare specialises in salary packaging and fleet management and relies on big corporate customers as well as existing tax laws. Since the leaks from the Review, the company’s share price has tumbled a whopping 15 per cent!

Backlash

Now I am not saying the Henry recommendations are faulty but if investors, superannuants, independent retirees, small business owners and other successful people are to be penalised because they were diligent, saved and invested given the current tax laws, then there could be a big anti-Labor backlash at the election.

No one cares about the government closing loop holes that lead to rorts, but if retirees go to a financial planner and accountant to arrange their affairs to legally reduce tax and boost their investment returns, it’s a bit sad for a government to slug the hard workers and solid savers slash investors to pick up the can for people who have done the opposite for most of their lives.

Politics of envy

I believe in fair redistribution of income from the rich to the poor but I hate the politics of envy driving policies in an election year where those who employ people and pay lots of tax, in dollar terms, get politically and economically beaten up because they have worked on being successful.

If Labor gets too ‘red’ this year, Mr Rudd might have to practice the following Shakespeare-with-a-twist line: “Parting is such unsweet sorrow”.

For advice you can trust, contact Switzer Financial Services.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Wednesday, January 27, 2010