Now that the election is over, Australia has a first hung parliament in 70 years. What this means that no political party has an outright majority to form a government. However, what can happen is that either the Labor or Coalition party can form a minority government by dealing with the minor parties and independents.

Regardless which party forms the government, it can be easily toppled with a vote of no-confidence in parliament. When that happens, either the people have to go back to the polls again or the other party form the next government.

If the global macroeconomic headwinds of deflation comes and puts the Australian economy under enormous stress in the months to come, we can expect more political instability as blame shifting, polarisation of views and strife increases. This is an environment that is hardly conducive for sound economic policies and doing business.

Watch this space.