Every Australian Prime Minister Since 1987 Has Impacted Our Equity Markets: Here Are The Best And Worst Moves By All Of Them

Nine different people have been Australian Prime Minister since the modern ASX was born in 1987. There were exchanges prior to that, but they were several state‑based exchanges which merged into a single national market. Each Prime Minister has made decisions that have shaped the equity market. Some decisions permanently strengthened the investment environment. Others imposed costs, distorted capital flows or created uncertainty that lingered long after the political cycle moved on.

In this article, we look through the consequential “best” and “worst” moves by every PM since the ASX’s formation — not in a partisan sense, but strictly through the lens of equity‑market impact. These are the decisions that changed the cost of capital, altered investor behaviour, reshaped sector valuations or shifted the structural flow of money into and out of listed equities.

The Best and Worst Moves From Every Australian Prime Minister Since 1987

Bob Hawke (1983–91)

Best: Dividend imputation (1987)

Dividend imputation remains one of the most powerful structural advantages of the Australian equity market. Introduced in 1987, it eliminated the double taxation of company profits and dividends, making fully‑franked yields a defining feature of the ASX. It is this rather than any cultural preference that explains why Australian investors hold equities for income in a way few other markets do. The policy permanently tilted household capital toward shares over debt or property, and its influence is still visible in the valuation premium of high‑franking‑credit sectors such as banks and industrials. If it weren’t for this, companies would splurge on share buybacks as they do in America.

Worst: The tightening that triggered the 1990–91 recession

The early‑90s recession crushed equities as interest rates were pushed above 17% to defend the currency and curb inflation. The downturn collided with the collapse of late‑80s corporate empires, whose excesses regulators had allowed to run too far – most notoriously Alan Bond’s empire. The combination wiped out wealth, shattered confidence and left a scar on risk appetite that lasted well into the decade.

Paul Keating (1991–96)

Best: Compulsory superannuation (1992)

The Superannuation Guarantee is arguably the single greatest structural tailwind the ASX has ever received. It created a perpetual, compulsory inflow of capital from every employed Australian into super funds, with a large share allocated to domestic equities. The compounding effect over 30 years has been extraordinary. Australia now has one of the largest pension pools in the world relative to GDP, and it is this rather than short‑term sentiment that underpins the depth and liquidity of the ASX. Nonetheless, it was only 3% at the time and would take some decades to be magnified.

Worst: Keeping company tax high as global competitors cut theirs

As Treasurer, Keating deserves credit for cutting company and income tax when CGT was introduced – Jim Chalmers could learn a thing or two. But when he entered the Lodge, he kept the same rate right at the time peer economies were cutting rates to attract capital. Our reluctance to follow suit signalled the beginning of a long‑running corporate‑tax disadvantage. Investors still debate whether this was the true “worst” decision of the era from a broader policy standpoint, but from an equity‑market perspective, we’d argue it is.

John Howard (1996–2007)

Best: The 50% CGT discount and company tax cuts (1999)

The combination of a 50% capital gains tax discount for individuals and a reduction in the company tax rate from 36% to 30% transformed the after‑tax attractiveness of equity investment. It was intended to normalise direct retail share ownership and make it easier in an era of online share ownership. For many investors, this remains the most consequential pro‑equity reform of the past 30 years.

Worst: The same CGT discount when paired with negative gearing

The CGT discount became a double‑edged sword. When combined with unrestricted negative gearing, it diverted a generation of household capital into leveraged residential property rather than productive equity investment. It is this rather than any lack of innovation that explains why Australia’s household balance sheet became so property‑heavy.

Kevin Rudd (2007–10, 2013)

Best: The 2008 bank guarantees during the GFC

The wholesale funding and deposit guarantees introduced during the global financial crisis arguably prevented a banking‑sector collapse. With the big four representing the largest weighting on the ASX, stabilising the banks stabilised the entire market. The guarantees were decisive, fast and effective. Otherwise, we could’ve ended up worse than America which had a 4% decline in peak to trough GDP – again, because the big four weigh so heavily.

Worst: The Resource Super Profits Tax (2010)

The RSPT wiped tens of billions off miners’ market caps within days. It triggered one of the most aggressive industry campaigns in Australian political history and directly contributed to Rudd’s removal. For equity investors, it was a textbook example of sovereign‑risk repricing. It is not often you have corporate CEOs at loggerheads with a government but this is just what happened.

Julia Gillard (2010–13)

Best: Replacing the RSPT with the watered‑down MRRT

Gillard’s Minerals Resource Rent Tax restored a degree of certainty to the resources sector. The damage from Rudd’s version had already been done, but the MRRT was far less punitive and helped stabilise valuations. It also minimised the impact until it was renewed.

Worst: The carbon pricing mechanism (2012)

The carbon price increased costs for energy‑intensive ASX‑listed companies at a time when global growth was still fragile. Some investors argue the long‑term transition benefits outweighed the short‑term pain, but from a pure equity‑market perspective, the timing was difficult.

Tony Abbott (2013–15)

Best: Repealing the carbon tax and MRRT (2014)

Removing both taxes lifted cost overhangs that had been weighing on resources and energy stocks. The repeal provided immediate valuation relief and improved earnings visibility.

Worst: Ending carbon pricing without a replacement mechanism

Another double-edged sword here. Scrapping the carbon price without a credible alternative created a decade of policy uncertainty for energy and utilities investment. It is this rather than the repeal itself that investors still cite as the most damaging legacy of the period.

Malcolm Turnbull (2015–18)

Best: The Ten Year Enterprise Tax Plan and early‑stage investor incentives

Turnbull was forced to back down on his plans for cutting the rate for all companies given notorious campaigning from Bill Shorten, but ended up with a compromise in the form of a 28% rate for companies with a turnover below $50m. This improved capital‑raising conditions for small caps and pre‑IPO companies. These reforms strengthened the risk‑capital ecosystem and supported the ASX’s vibrant small‑cap market.

Worst: The 2017 Major Bank Levy

The levy imposed a direct annual tax on the liabilities of the five largest banks, hitting the biggest sector on the ASX straight in the earnings line. Investors priced it as a structural drag on profitability. And what positives did it achieve? Just like the MRRT, some nomimal revenue.

Scott Morrison (2018–22)

Best: COVID‑era stimulus

The stimulus response (i.e. JobKeeper, instant asset write‑offs and accelerated depreciation) helped cushion the 2020 crash and supported one of the fastest equity‑market recoveries on record, not just at the big end but small end too – just look at how many IPOs there were from May 2020 to November 2021. The policy response was a major reason why.

Worst: The fallout from the Banking Royal Commission

Although the inquiry began under Turnbull, Morrison oversaw the implementation of the recommendations. The consequences were severe: AMP collapsed in value, wealth‑management models were dismantled, and compliance costs surged across the financial sector. Investors still debate whether this was “worst” in a normative sense, but the market impact was unambiguous.

Anthony Albanese (2022–present)

Best: Completing the rise of the Superannuation Guarantee to 12%

The move to 12% (effective July 2025) extends Keating’s structural inflow mechanism to its intended endpoint. It increases long‑term capital flowing into super funds, much of which ultimately finds its way into ASX‑listed equities. From an investor’s perspective, this is a net positive even though it raises labour costs for businesses.

Worst: Proposed CGT changes affecting risk capital

The proposed capital‑gains tax changes risk disincentivising investment in riskier, early‑stage and small‑cap companies. If the changes had been isolated to real estate, they might have corrected a long‑standing distortion. Applied broadly, they risk starving the ASX’s growth engine of capital.