They say the best way to make a good deal is to have that ability to walk away from it.

When you are struggling to gain control of the lower house, there may well be transaction costs attached. For Australian business, that means a range of initiatives might be at risk. Consider for a moment some of the a new policy frameworks that a minority government may have to work within:

  • National welfare - Tasmania and South Australia will want more of the federal tax dollar - Arrium’s plans to save $100m is just the beginning. Top of Nick Xenophon’s wish-list is a rescue package for the Whyalla steelworks. As much as $250 million to $300 million may be sought. More widely, what extra financial support might be demanded for Australian industry to avoid job losses and the dislocation of technology and globalisation?

  • Trans-Pacific Partnership – despite the work of the last government securing a range of free trade deals, these initiatives are now unlikely to be developed further, let alone complex multi-nation deals like the TPP. Expect to see more push back and demands for ‘the Australian government to look at the wider national interest in supporting a diverse economy in our trade negotiations.’

  • Industrial relations reform – given a big Senate crossbench, it is unlikely Malcolm Turnbull would have the numbers to pass industrial relations reform legislation.

  • The $50 billion company tax cut – these were reliant on the passage of a wider range of funding measures like the changes to taxation of superannuation that now seem unlikely to pass. This injection was at the heart of the coalition’s economic strategy, what can possibly replace it?

  • The Royal Commission into Banks – bearing in mind the emerging complexion of lower house cross benches and the senate, we may well see some form of commission into the banking sector firm as a price of power but what it will look like is anyone’s guess.

  • Foreign investment - expect an increasing level of restlessness over the benefits of FDI and potential pressure for further restrictions.

  • Medicare: there is little or no hope that any government in the near future will make any effort to deal with a model designed in the 60’s and 70’s to meet the problems of that period. Where does that leave the proposed Harper competition policy changes designed to inject contestability into health and education services?

The election result presents real challenges for business. The inevitable horse trading that will ensue from a hung parliament will create more uncertainty until the nature and complexion of the governing party is clearly established and the terms on which Australia will be governed - settled.