Small and medium businesses are not feeling the love from the current government as support has fallen into negative territory, according to the latest Sensis Business Index survey.
When Malcolm Turnbull took over as Prime Minister, confidence rose, with businesses optimistic about the change, however, it has now fallen to the lowest level since he came into power.
“The government’s approval rating has fallen nine points and is 20 points lower than the highest score we saw under Tony Abbott, following the pro-business Federal budget of 2015,” explains Sensis CEO, John Allen.
“To find a lower score we need to go back to the March 2015 survey, which was taken after Tony Abbott had survived a leadership spill.
“While perceptions of the economy remain strong, less than one in seven businesses have faith in the Government’s policies, with the biggest concerns being excessive bureaucracy and red tape, as well as there being too much of a focus on the interests of big business.”
At an industry level there were mixed results in terms of business confidence, with seven out of 10 industries going backwards this quarter. The three sectors that improved were health and community services; building and construction; and retail trade. Confidence in the retail trade sector increased during the past quarter by nine points to +23 but still has the second lowest overall industry confidence level.
The index also reveals that long-term projections for the economy have improved to their best level in 2.5 years and expectations for the economy in a year’s time have risen to +10.
“When we look at the key indicators, sales, employment, wages and prices are all positive, while profitability has also improved, despite still recording a negative score. When you mix these results with the fact that business confidence remains at one of the best levels we’ve seen in the past seven years, it’s not surprising to see the long term economic sentiment improve,” says Allan.
“Businesses are expecting a solid increase in prices this quarter, which may give inflation a push, helping the Reserve Bank to justify a rate hike at a time when everyone is keenly watching their every move.
“Overall more businesses in the capital cities are feeling confident and it comes down to their perceptions of the economy. They believe the economy is travelling well, whereas more regional business owners feel pessimistic,” he adds.
By Marion Gerritsen
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