US Election - Biden Administration Policies – Financial Planning

Tuesday, November 10, 2020

It’s comfortable and interesting to watch the US election from the more stable shores of Australia. After an extremely volatile campaign we see Biden most likely the incoming President elect. So what might that mean for financial planning strategies given his electoral campaign policies?

by Maher Digby Financial Planning Sunshine Coast 

The result is yet to be finalised and may take weeks and of course Donald Trump remains in office until January regardless, however assuming an ultimate transition into the new presidency we take a look at Biden’s said plans.

Biden proposed much needed fiscal stimulus spending aimed at assisting the recovery from the devastating effects of Corona Virus on the US economy and population with 230,000 people now deceased under chaotic and inconsistent management of the country’s health care response. His stimulus plan, like Australia’s, includes expenditure on infrasctructure which not only creates jobs but also demand for resources such as building materials and steel.

The new President, with a life-time career in politics under his belt, is expected to have a more co-operative and diplomatic approach to international affairs. International trade wars are likely to be calmed down and this could provide a flow-on for easing recent trade tensions between Australia and China where there has been restrictive trade measures against our barley, seafood, wine, coal and copper. In addition any Australian companies dealing with the US – from steel and aluminium producers to beef farmers, winemakers, rare mineral producers, would benefit from more rational trade policy in general. Although Biden has proposed increasing company tax, which would affect profit margins of Australian companies that operate in the US, it is looking like the administration won’t gain majority in the Senate restricting the passing of these proposed tax hikes. This all being the case it would strengthen our economy, trade and further underpin our own recovery.

Biden also proposed increased policy measures on climate change. The United States is anticipated to join other countries that have pledged to achieve net-zero emissions by 2050. This could lead Australia, and Australian companies trading internationally, down a more proactive path of response to climate change as well. 

Assuming the development of a stronger American economy this would be beneficial for the Australian economy. An unfolding of the US stimulus and a toning down of the trade war is likely to be positive for Australian shares and strengthen the Australian dollar (in relation to the $US).

With potential changes unfolding in international trade and economies responding to a new US administration we recommend staying in touch with your financial advisor to be best position your investments. If you don't have a financial advisor, please feel free to give the Maher Digby team a call to discuss your Wide Bay or Sunshine Coast retirement planning options with one of our expert financial planners in Nambour. 

For more Information contact Mark Digby at Maher Digby Securities Pty  Ltd - Financial Advisers – AFSL No. 230559 – Ph: 075441 1266.  This document was prepared without taking into account any person’s particular objectives, financial situation or needs. It is not guaranteed as accurate or complete and should not be relied upon as such.Maher Digby Securities does not accept any responsibility for the opinions, comments, forward looking statements, and analysis contained in this document, all of which are intended to be of a general nature. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend consulting a certified financial advisor.