Directors throw support behind broadband network
Australian company directors largely believe the federal government does not understand business, but for the first time a majority of directors have thrown their support behind the national broadband network.
An Australian Institute of Company Directors survey of 504 directors and chairmen across the public, private and not-for-profit sectors also found directors expect unemployment to rise, and the Australian dollar and interest rates to fall in the next year.
The survey, conducted early last month, showed that overall director sentiment increased but remained in negative territory from November last year to March.
But it found that overall director sentiment had improved over the past two years. It now stands at 71 points, up 15 points from the previous survey but below the neutral level of 100 points.
Sentiment towards business conditions 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.
Still, the survey 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, just more than 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 49 per cent of respondents agreed that the national broadband network 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 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.
Think tank the Grattan Institute this week warned the country faced a "decade of deficits" due to flagging revenues and continued spending pressures.
The Business Council of Australia last week called for political leaders to risk their jobs to achieve long-term reform.