MY MONEY

No economic policy changes in early days of new PM

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On Monday night the nation was presented with a new Prime Minister - Malcolm Turnbull - after a Liberal leadership spill took place in Canberra.

Whilst it's early days, what can the nation expect in terms of changes in economic policy?

Unfortunately a "Turnbull bounce" was nowhere in sight on Tuesday morning when the ASX started trading however currency traders reacted well to the news as the Australian dollar staged a mini rally and rose to a two-week high of USD71.52c.

Malcolm Turnbull

AMP Capital's head of investment strategy and chief economist, Shane Oliver had this to say in his newsletter the day after the leadership spill.

"It's also early days yet with the new PM yet to fully articulate any changes in economic policy. As a result I won't be rushing to change any forecasts/views on the Australian economy and investment markets," says Oliver.

"That said, the change in leadership has the potential to help Australia. Firstly, Malcolm Turnbull is a more popular leader in Australia including amongst Labor and swinging voters. As a result we are likely to see a short term boost in economic confidence."

"Secondly, he is likely to focus more on articulating the challenges Australia faces, proposing reforms to address them and then reaching out to independents and political opponents in Parliament to offer compromises to help ensure that they are passed into law.

This is likely to include getting the budget back under control, reforming Australia's tax system, reducing bureaucracy. The commitment to free market economic policies, including free trade deals, is likely to remain."

"A better articulation of Australia's economic challenges and reforms designed to address them is exactly what Australia needs now and has been lacking over the last few years."

"A better articulation of Australia's economic challenges and reforms designed to address them is exactly what Australia needs now and has been lacking over the last few years."

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