Maxsted attacks Labor record

One of Australia's most senior businessmen, Westpac chairman Lindsay Maxsted, has criticised Julia Gillard's minority government as "unhelpful" to business and says it should share some of the blame for many companies' reluctance to invest.

In a sign of the poor relations between Labor and corporate Australia, Mr Maxsted accused the government of ignoring the needs of business in its approach to developing policy.

Mr Maxsted, also a BHP Billiton director and the chairman of Transurban, has persistently bemoaned the government's relationship with business.

"The minority government in Canberra has been unhelpful for business over the last few years," he told a lunch in Sydney on Thursday.

"It's not a government which is user-friendly for business, it's not a government which goes out of its way to understand business.

"It certainly doesn't work on a basis of understanding that to drive the economy, and to do some of the pet projects which are very good pet projects [such as the National Disability Insurance Scheme] ... you actually need to work with business to get the right policy settings.

"For all sorts of reasons, without apportioning blame to anyone in particular, that just hasn't been the environment for the last few years."

Mr Maxsted said he did not intend the comments to be especially political but they were a statement of the facts as he saw them.

He said Labor's policies on industrial relations had contributed to making companies much more cautious.

"In that sort of environment it's not surprising that businesses are reluctant to invest a lot of money and borrow a lot of money," he said.

"Quite quickly we've become a very high-cost economy and quite quickly we're falling down the ladder on productivity."

Surveys show business sentiment is below its long-term average, despite the Reserve Bank's deep cuts in interest rates and improving consumer confidence.

Mr Maxsted said another factor squeezing business confidence was the high dollar.

With banks facing growing regulations, he also warned that regulations designed to make banks safer could act as a brake on future economic growth, by holding back the supply of credit.

As confidence grows on financial markets, Mr Maxsted said the banking system could come under "amazing" pressure if credit demand were to pick up at the same time as people were taking money out of deposit accounts, because banks could no longer use short-term wholesale markets as heavily.