The economic debate at this election has been unimpressive

WE'RE on the home stretch. No, really, still more than a week to go in what has been Australia's longest Federal election campaign.

As is usual in election campaigns, economic management features prominently, not that the standard of the debate has reached any great heights.

Does the election outcome matter greatly for Australia's economic outlook, and for the future returns of Australian superannuation funds?

From my perspective, working for a major superannuation fund, the short answer is no.

Firstly, would a clear win by either Labor or the Coalition make a great deal of difference in the short term?

My sense is that it wouldn't.

When it comes to the broad macroeconomic policy settings that either side would implement, there's not a lot of difference between the two, and what differences there are often get exaggerated as part of the theatre of politics.

Either way, fiscal policy is likely to be a modest drag on economic growth in the next few years, although marginally less so under Labor.

Both sides are aiming for a budget surplus over time, but neither side is in any great hurry - which, in my view, is not such a bad thing.

And it's extremely unlikely that the Reserve Bank of Australia would see the need to change its view on interest rates, based on the election outcome.

Given how close the polls are at this point, the risk of another hung parliament is very real and that would likely make an already uncertain economic environment even more so in the short term.

However, even that outcome would only make a marginal difference to the economy's performance.

When it comes to deciding where to invest our members' money, we are primarily interested in the medium to long-term outlook for a range of both domestic and global factors, including economic growth, inflation, interest rates and exchange rates.

Elections matter for long-term investors if they have a material effect on any of these factors and I just don't think this election is likely to make much of a difference.


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