Support for the Federal Government among small and medium businesses (SMBs) has dipped to its lowest level since Malcolm Turnbull took over as Prime Minister, according to the latest Sensis Business Index (SBI) survey.
“After we saw Malcolm Turnbull take over as Prime Minister in 2015 we saw confidence in the government rise, with businesses telling us they were optimistic about the change, ” Sensis chief executive, John Allan said. However, since then the government’s approval rating has fallen nine points and is 20 points lower than the highest score under Tony Abbott, following the pro-business 2015 Federal Budget.
“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 focus on the interests of big business,” Allan said.
The Index, which reflects the views of 1,000 small and medium businesses from across Australia, also revealed that despite a tough quarter for the Government the long term projections for the economy have improved to their best level in 2 ½ years.
“Perceptions of the current state of the economy fell slightly, but when we look further ahead businesses are feeling the most optimistic they have been since the carbon tax was repealed in 2014,” Allan said.
The net balance score for current perceptions of the economy now sits at +2, while the expectation 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. 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.”
In terms of business confidence there was a two point fall nationally, with the score now sitting on +44, which is the second best result since March 2010.
Across the states and territories businesses in the ACT, Tasmania, Queensland and Northern Territory became more confident, Western Australia maintained their score, but the other states and territories went backwards.
“Results were fairly flat this quarter, although the ACT saw an 18 point spike and now sits in top spot, driven by strong sales results, in this, the first full survey taken since the ACT election,” Allan said.
“In a sign of what was to come, the WA Government’s score fell as it headed towards the election loss, with SMBs reporting concerns the government was too focused on the interests of big business.”
At an industry level there were mixed results when it came to business confidence, with seven out of 10 industries going backwards in the quarter. The three sectors that improved were health and community services, building and construction and retail trade.
According to Allan, 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.”
This story originally appeared on Appliance Retailer.
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