Macro and Australian equity strategist, Macro Strategy Advisors

Shane Lee

Macro and Australian equity strategist

Macro Strategy Advisors

Thematic (Sector/Industry)

<ul><li>Political instability has returned to Australia in recent months after several Members of Parliament (MPs) have revealed their dual citizenship status. The Constitution doesn’t allow dual citizens to sit in parliament and so far, two Senators have resigned and another four have been referred to the High Court to determine their dual citizen status.  </li><li>Importantly, the issue has also affected the House where the Coalition has formed Government by a margin of only one seat. Indeed, the High Court will also determine whether National Party member, Barnaby Joyce, can remain in parliament in hearings set for 11 and 12 October. </li><li> At best, the dual citizenship issue is a distraction for a Government that is waning in the polls. At worst, the issue will lead to the collapse of the Government.  Indeed, apart from those already implicated, there are twenty-one MPs born in a foreign country.</li><li> Several clients have asked whether a collapse of government due to the dual citizenship issue would put pressure on the Aussie dollar or cause a rally in bond yields. We think it probably wouldn’t, given markets have been unperturbed by several leadership challenges and changes of Government in the past 10 years.</li></ul>

Political instability has returned to Australia in recent months after several Members of Parliament (MPs) have revealed their dual citizenship status. The Constitution doesn’t allow dual citizens to sit in parliament and so far, two Senators have resigned and another four have been referred to the High Court to determine their dual citizen status.  Importantly, the issue has also affected the House where the Coalition has formed Government by a margin of only one seat. Indeed, the High Court will also determine whether National Party member, Barnaby Joyce, can remain in parliament in hearings set for 11 and 12 October.  At best, the dual citizenship issue is a distraction for a Government that is waning in the polls. At worst, the issue will lead to the collapse of the Government.  Indeed, apart from those already implicated, there are twenty-one MPs born in a foreign country. Several clients have asked whether a collapse of government due to the dual citizenship issue would put pressure on the Aussie dollar or cause a rally in bond yields. We think it probably wouldn’t, given markets have been unperturbed by several leadership challenges and changes of Government in the past 10 years.

Skeletons in the Closet