Business leaders throw their support behind NBN

Australian company directors largely believe the federal government doesn't understand business, but for the first time their view has swung in favour of the NBN.

Australian company directors largely believe the federal government doesn't understand business, but for the first time their view has swung in favour of the NBN.

An Australian Institute of Company Directors survey of 504 directors and chairmen across the public, private and non-profit sectors also found that directors expect unemployment to rise and the Australian dollar and interest rates to fall in the next 12 months.

The survey, conducted early last month, showed that overall director sentiment increased but remained in negative territory from November 2012 to March 2013 but had improved over the past two years.

It now stands at 71 points, up 15 points from the previous survey but well below the neutral level of 100 points.

Sentiment towards business conditions also moved from negative to positive, to 111.5 points.

"There is renewed optimism about business growth over the coming year and sentiment of each of the economic indicators has improved since the previous survey," the latest Director Sentiment Index said.

But the survey also showed that there was "increased pessimism with the federal government's performance ... and more than 80 per cent of directors maintain the belief that the federal government lacks understanding of business".

"Conversely, 50 per cent of directors believe the federal opposition understands business."

Furthermore, a touch over 50 per cent of respondents said that abolishing the carbon tax - as the Coalition has promised to do - would have a positive effect on the business.

But the survey showed that 49 per cent of respondents agreed that the NBN was a "positive thing for Australia", compared with 37 per cent who disagreed.

The survey comes as Labor and the Coalition grapple with how to fund expensive election commitments as the high Australian dollar and weaker commodity prices crunch the federal budget.

On Sunday, federal Treasurer Wayne Swan said that weaker terms of trade and a persistently high Australian dollar had stripped $7.5 billion in revenues over the past six months.

The Grattan Institute this week warned that Australia faced a "decade of deficits" because of flagging revenues and continued spending pressures, and leading economist Ross Garnaut advised the Reserve Bank to slash interest rates to protect Australia from recession when the mining boom ends.

The Business Council of Australia, whose members are the chief executives of Australia's largest companies, last week called for political leaders to risk their jobs to achieve long-term reform.

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