Citizenship turmoil threatens economic confidence in Australia

Bloomberg

Political turmoil in Australia risks undermining fragile economic confidence as the loss of another lawmaker in the dual-citizenship fiasco left Prime Minister Malcolm Turnbull leading a minority government.
John Alexander, 66, became the second government member in the lower house to resign, when he acknowledged he likely inherited British citizenship through his father. While the government will survive with the support of independent lawmakers as Alexander and former Deputy Prime Minister Barnaby Joyce re-contest their seats, the saga is a major distraction and threatens to stall Turnbull’s legislative agenda.
“As the Australian economy balances the risks of a housing correction, record household debt and persistently low growth, the last thing we need is a crisis of political confidence that undermines economic confidence,” said Andrew Charlton, director of consultancy AlphaBeta in Sydney. “We don’t have the fiscal or monetary policy firepower to deal with a negative shock.” Australia’s parliament has been gripped by turmoil since two Greens senators in July discovered they held dual citizenship, in contravention of the constitution, and resigned. The fiasco engulfed the government last month when Joyce, who inherited his New Zealand citizenship from his father, and four other lawmakers were told by the High Court they were ineligible to sit in parliament.
That ruling cost Turnbull his one-seat majority, and with Alexander’s resigna-
tion he is now in an even more tenuous position in parliament. Joyce, who has since renounced his New Zealand citizenship,
is seeking to regain his seat in a special
election on December 2.
Nevertheless, the issue appears set to drag on into 2018 amid questions about the origins of several other lawmakers — distracting the government and making it harder to pass legislation, including company tax cuts. It risks tipping Australia into further political chaos after a decade in which no prime minister has served a full three-year term due to infighting and
leadership challenges.