BUSINESS OUTLOOK IMPROVES DESPITE REGULATION
Written on the 5 December 2013
AUSTRALIAN directors are confident about the economy since the election but are concerned about red tape and regulation, according to the latest Director Sentiment Index (DSI).
The Australian Institute of Company Directors’ DSI end of year survey shows director sentiment jumping 14 points to its highest point since 2011, but remains pessimistic.
Chief executive John Colvin says the improvement follows growing optimism about business and consumer confidence.
“This seems to be, at least in part, fuelled by a dramatic improvement in the perception of the new government,” Colvin says.
For the first time in the survey’s history, the majority of directors (55 per cent) agreed that ‘the current government understands business’ – compared to 8 per cent in April.
The outlook on the US economy’s future is increasingly pessimistic, while Asia continues to be positive and Europe considered the weakest.
Colvin says directors list regulation, global economic uncertainty and low productivity growth as Australia’s biggest economic challenges.
“More than 60 per cent of directors believe that the level of red-tape and the time spent by the board on regulatory compliance has increased over the last 12 months, with more than 70 per cent of directors identifying workplace health and safety and preparing and paying taxes as the aspects of their business most affected by red tape,” he says.
Infrastructure is rated as the top policy priority for the Federal Government, followed by improving productivity.
“This survey has a clear message – business is telling Government loud and clear, that reducing the regulatory burden, both through cutting existing red tape and taking a more efficient approach to creating any new regulation, must be a priority.”