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With the announcement of Joe Biden’s win over the US election earlier this week comes news from experts that Australian SMBs are likely to see more stability moving forward from a volatile period.
However, while hopeful, many are also saying that it is impossible to predict how the market will shift moving forward, and therefore difficult to say how it will impact Australian businesses.
“There is no one size fits all solution for Biden moving forward,” said Kylie Merritt, co-founder of Australian FinTech business ausbiz.
“It’s pretty clear that American is still quite divided and quite polarised. The big challenge for Biden is that he’s not going to have full control over both houses, which makes it almost impossible to predict what changes he will make and how they will affect business owners.”
“But, I think for SMBs the most positive thing we can hope for and hopefully will see is that this presidency brings stability to the world.”
With the announcement of the Pfizer vaccine earlier this week, all eyes are now on Mr Biden to see how quick the adoption of the vaccine into the US will be, and how this will impact the global economy. Ms Merrit says that it will be difficult to determine whether the stability that comes in a post-COVID world should be attributed to the president or the vaccine.
“The hardest thing for me is to be able to look at the Biden presidency alongside coming out of COVID and separate the two,” she said. “Whatever happens here may be because we’ve got a new president, or it could be very likely that it’s actually because we’ve got a new vaccine.”
“I think the one thing we should be hoping for is less volatility, because stabilisation for Australia is always a good thing.
OFX Head of Treasury and a London School of Economics-trained 15-year veteran of global currency markets, Sebastian Schinkel, spoke to Dynamic Business prior to the election, and said that a Biden win could lead to more stability for the global economy, and therefore stronger Australian SMBs.
“A Democratic win could soften the US foreign policy and increase social spending which could weaken the US dollar,” he said.
“Expectations the Democrats will regain a majority in both house and senate have raised hopes of an extensive stimulus bill in the new year.”
Mr Schinkel has also highlighted the effect the US election result will have on Australia’s relationship with China, and how that could impact Australia’s foreign investment and trade.
“Australia has really a lot of dependence on China. We depend on China’s growth and because of the commodities we sell to them,” he said.
With Mr Biden winning the election Mr Schinkel said that the relationship between the US and China will most likely improve, putting Australian in a better position globally.
Ms Merritt has said that while this may be the case, the impacts will vary depending on the industry of the business, and it is difficult to predict an “umbrella outcome”.
“Someone who owns a news agency in Bathurst is not going to be impacted in the same way, as someone who’s trying to export lobsters, and China is 80% of their market,” she said.
“If changes do get made in the States, there will be a flow on effect here, but it could take 12 to 18 months.”
“I think we all just need to wait and see what happens.”