Business hangs its hat on polling hopes

Surveys show that businesses are still spooked by political uncertainty and are hopeful of a Coalition victory. If Abbott beats Rudd we're likely to see a rush of business activity.

Australians sense danger ahead and it's showing up in surveys and forward estimates.

And the Coalition believes that the fear that is engrained in so many enterprises and their staff will deliver a Coalition victory when the party unleashes its enormous election spending power in the final week of the campaign.

The surveys are also showing that if the Coalition wins there will be a rush of business activity because that sense of danger has deferred decisions. If Kevin Rudd wins – and he is the people’s favourite – then some deferred decisions will be made but the sense of danger will remain.

Over a wide area in business, although there is a stabilising outlook, the Dun and Bradstreet survey shows that enterprises are looking to shed labour, particularly as many now have cash flow problems (Business outlook stabilising: survey, August 6).

A coalition victory will prevent some labour shedding but in many cases the decisions have been made.

Fascinatedly that sense of danger is being reflected in tougher times for restaurants and according to the AIG services survey the labour intensive hospitality industry is struggling (Private service sector activity slumps: AIG, August 5). 

Hospitality is having great difficulty passing on the industrial relations legislation imposed higher labour costs and the higher costs of energy, regulation and other services. This applies in many other industries.

I suspect that is why Tony Abbott is opening his campaign with an attack on the carbon tax and promising immediate action.

Similarly the motor vehicle industry, led by the dealers has stopped to a walk after the FBT changes, which is multiplying the sense of danger in the business community. If the Coalition wins and the FBT changes are scrapped it will cause a rush of pent up motor demand.

Lower interest rates will see a rush by investors to buy houses and may kindle some young home buyers to stop renting, but because the investors have jumped in first home buyers still struggle.

And the sense of danger will see many wait until after September 7.

The lower dollar helps many enterprises but three years of a high dollar sees a wide variety of industries adversely affected by higher import costs. For example retailers will suddenly see prices rise although initially suppliers may take the blow on the chin, but that will not last long.

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