Brexit labelled a ‘king hit’ to Australia as politicians downplay the local impact

THE PM is calling for calm, but both sides of politics are being slammed for keeping Aussies in the dark over the impact of Brexit.

BRITAIN’S shock decision to leave the European Union is a “king hit” that is bad news for Australia, a former Liberal leader has said.

While Prime Minister Malcolm Turnbull tries to delicately play down the oncoming effects of the split while calling for calm, commentators are ignoring his pleas and digging into both sides of politics over their handling of the fallout.

Speaking on ABC radio, former Liberal leader John Hewson criticised both leaders for failing to acknowledge the full consequences of a Brexit for Australians.

“This is a king hit (to the economy), and it’s a king hit also in political terms,” he said.

“This is all bad news for Australia, and the challenge is not being recognised by either side of politics.”

Mr Hewson said neither the government nor opposition had conceded how a global economic shake up brought on by the Brexit would hit Australia, and said they were each leaning on “optimistic” budget forecasts.

“It’s global uncertainty. Global growth rates have been consistently downgraded by the IMF and the World Bank each time they make announcements. I think we’ll see more of that,” he said.

“World trade I think fell about 14 per cent last year. I mean this is all bad news for Australia.

“I think those budget forecasts on which they’re both relying are very optimistic. They were optimistic to start with, I think more optimistic now we’ve had Brexit.”

Former Liberal leader John Hewson, pictured at a climate change rally yesterday, is among commentators ignoring politicians’ urges to keep calm after the Brexit vote. Picture: Dean Sewell/Oculi for Greenpeace

Former Labor trade minister Craig Emerson also weighed in on the effects Australia would feel, telling ABC radio the economic effects would be more than brief market fluctuations.

“I don’t think it’s going to be one of these matters that’s a little bump in the stock market for the next couple of days and then it’ll be all over,” he said.

“It’s in the interest of the UK to exit as smoothly as possible but it’s not necessarily in the interest of the EU that it does exit as smoothly as possible because the EU will want to demonstrate this is a difficult and painful process in order to reduce the likelihood of other countries exiting.”

Treasurer Scott Morrison this morning called for cool heads as Australian markets prepared for a second day of fallout from the Brexit decision.

“What has happened in the UK is a simple reminder of the uncertainty that’s out there,” he told the Seven Network on Monday.

Brexit wasn’t the only issue creating headwinds in the global economy, Mr Morrison said, citing changes in China, the deflation and currency concerns in Japan and the political situation in the US.

“At this time of uncertainty, you’ve got to focus on the things that you can control,” he said.

“You can’t control the things that are out there well beyond us but what you can control is how much you spend, how much you tax.”

Opposition Leader Bill Shorten is trying to use the Brexit outcome to the advantage of his election campaign. Picture: Kym Smith

While each calling for calm, both Mr Turnbull and Bill Shorten have used uncertainty in the wake of the Brexit result to sway voters their way ahead of Saturday’s election.

The Prime Minister is promising economic stability while the opposition leader seeks to paint a picture of political instability within the government, saying the Brexit vote and following turmoil had arisen from “weak leadership and a divided government”.