The Federal Government has become a key risk factor for investors interested in putting money into Australian stocks, according to Aberdeen Asset Management.
The Government had made unprecedented decisions without industry consultation, which would hurt some companies’ profits, Aberdeen investment manager of equities Natalie Tam said.
“[Australian] companies are finding themselves effectively blind-sided and scrambling to reassess their strategies,” Tam said.
“For example, at the budget the Government announced a doubling in the income threshold for the Medicare levy surcharge and this will have a big impact on private health insurers and hospital providers.”
Stocks of medical companies Ramsay Healthcare and NIB Holdings had fallen around 13.3 per cent and 25 per cent respectively from budget night on May 13 until June 24.
Another company’s profit affected by government decisions was Lion Nathan, Australia’s second-biggest alcohol producer.
The Government’s announcement of a 70 per cent tax hike on flavoured alcoholic beverages or so-called alcopops to curb youth binge drinking would impact on alcohol producers.
“[Raising] alcopops by 70 per cent, that’s huge. That’s been impacting companies like Lion Nathan,” Tam said.
Lion Nathan’s shares have risen around 2 per cent since the budget.
The Government has also forced petroleum companies to pay more royalties on their oil and gas fields, affecting the profits of Australian petroleum companies and making them less attractive to overseas investors.
“These are just some examples of the changes that have not been anticipated by these companies and they have not been consulted on these issues,” Tam said.
The Government’s position on international takeovers of local companies could surprise, she said.
“If anything, the Labor Government is more likely to be more protectionist than the previous Liberal Government,” she said.
In 2001, then-treasurer Peter Costello rejected Netherlands-based Royal Dutch Shell’s takeover of Woodside Petroleum as it was against “national interest”.
