Business confidence under Labor “abysmal”

Posted by LC Team, Thursday, July 31, 2008

The slump in business confidence to recessionary levels is an “abysmal” result for the Rudd government, the federal opposition says.

The latest quarterly National Australia Bank business survey shows confidence has tumbled to its lowest since the 1991 recession as share market turmoil and 12-year high interest rates worry the captains of industry.

Expectations for the September quarter fell as one-third of firms expected conditions to worsen, particularly in the building and property sectors.

The opposition’s spokesman for small business Steven Ciobo said this was an “extraordinary” result.

“Labor has remarkably exceeded in getting business confidence to a level not seen since the recession despite Australia having 2.75 per cent GDP growth,” Mr Ciobo told AAP.

“It takes a special amount of ineptitude to get a result this abysmal.”

He said since the government came to power last November both business and consumer confidence has done nothing but fall.

Consumer confidence is also near recessionary levels.

“And to compound the problem, instead of providing reassurance, Labor is doing the exact opposite,” Mr Ciobo said.

He said there is uncertainty about inflation, future employment, economic conditions going forward and Labor’s proposed emissions trading scheme.

“And we have an uncertain and reckless treasurer who is making all of these problems worse,” he said.

Commenting on the survey, NAB’s head of economics Jeff Oughton said falling consumer confidence, rising borrowing costs and share market volatility were rattling business expectations.

“When you get a great deal of uncertainty and nervousness, confidence adjusts accordingly,” he said.

“A triple whammy of reduced activity, lower consumer confidence, rising costs for borrowing, oil and other key purchase costs, and volatile and lower equity markets continue to weigh on the business outlook.”

AAP

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8 Comments

MM Reber July 31, 2008

A “cheap” shot b/c the die was well & truly cast in past financial year
with US sub-prime exploding onto the global scene with continuing repercussions, well before the current government came to power & this commentary should be seen as such.

DBH July 31, 2008

Grasping at straws, the good Doctor and his mates. Maybe some fiscal responsibility, restraint and planning beyong forthcoming elections when they were calling the shots would have mitigated the steaming pile of trouble they’ve left us with.

Jotoma July 31, 2008

What really concerns me is that we have a government with very little experience in running an economy that surely must be under pressure from the unions (for election favours) to increase wages.

I cant see it being a great 12-24 months.

kpw August 4, 2008

By the sound of it, Mr Ciobo is indicating that if Liberal had been relected last Nov, then we would not currently have these problems.
Now that would be interesting to see, headlines read “Australian Liberal Party saves the world”.

Labor or Liberal…..we would still be in the current position.

Bradford May 28, 2009

Howard and Costello would of made a better fist of running the economy during these times. Swan and Rudd were hard at degrading the economy way before this hit. They started their campaign telling us we were heading for Inflation then they belatedly discovered the opposite was true. Howard had warned before the Election we were heading for rough times, but this was ignored. Unfortunately the Prime Minister and the Treasurer were panicked by their inexperience. Now we are left with huge debts, and the States lack of discipline, especially NSW will leave our country with a huge debt. The sad part about all this, our governments are accumulating huge debts, with out realizing that debt is the problem, which still has to be dealt with. Even when things appear normal again, we will still be waiting for the debt problem arise again. This is the Third time that the US economy in particular has been steered out of its problem- debt far to much of it and over consumerism.
So in essence we will have incurred debts in the 100s of billions and we still have not dealt with the problem. The outcome has to be, those who have built up superannuation for themselves will have to forfeit their savings or part of, as “you know we tax payers have helped them with Tax savings”. Sound familiar. The other thing my bet is those who will retire in 5 years or so will never be let draw down on their Super, but it will be dealt out to them as a pension.
Happy retirement- o the best bet get a Government job.

Michael May 29, 2009

Sorry Bradford, Howard and Costello had their day in the sunshine and most Australians were not that keen on their handling of the economy. During a period of unprecedented income, they invested not one cent. If a business operated like they did they would be out of business.
As any good business person knows, you use the good times to invest for the bad times. Investment in infrastructure will ensure an ease thrugh the bad times.
Howard and Costello did not do any such thng. They reduced Australai’s tax base and gave excessive tax cuts to everyone ensuring more spending and no savings.
No wonder we have to borrow now for this investment.
It is far too early to say whether Rudd/Swan have got it right. But they were given few options.

Bradford May 29, 2009

Sorry Michael.Trust you are ready to retire. Those people who are under fifty will be laden up with so much debt their lives will be hell.This recession was predicted years ago.
The problem the Western world has is debt, to much of it.
The present crisis was caused by the Bill Clinton and others offering loans to people who could not repay. This was started years ago. What did those who owned the debt do, they thought up wonderful ways to repackage and resell this wonderful stuff. They called them CDO. Even our Local government Councils bought this stuff. So we now have to have a rate rise to cover the loss. Let us not blame them only. As we all know many things in the US were screwed for example, General Motors became a welfare company that happened to make cars. Many other companies and Directors were just to greedy and lazy.
We all agree now is the time to build infrastructure, when we have available resources such as Labor and Plant, not when you are in a boom
You say Howard did not invest, they invested 5% of GDP, Yes, they sold Telstra, but they did pay back some 90 billion in debt and invested some where around 50 billion in a future fund and left around 20 billion in the kitty. Now for a Socialist this may not be much loot but it shore does take some Taxes to recoupe. At a guess the fuel excise for ten years.
But my dear friend, Michael, the point you are missing the Debt that this lot intend to leave us with will change the way you and I live in this country. It will mean that some of those people who think they are going to get their hands on their super never will, it will become a pension. Another problem that Swan and Rudd will have is they will have fired all their crackers when the real problems is about to hit.
This will be rising energy costs. One of these will be massive increases in oil prices, inflation and unemployment. Michael Debt equals unemployment, we all think we can solve the worlds problems, but once you are indebted to another you lose your options to help others.
The sheer size of the debt that Swan and Rudd will leave us with will ensure that the unemployed and disadvantaged will be worse of then ever.
The worst Government in Australia is the NSW one, they are the ones who have not invested in anything, only themselves, friends and families.
Their are great links from this web site that will help you get a better understanding of the problems we face

Michael June 1, 2009

Thanks Bradford. You have opened my eyes to a lot of things I didn’t know.
I always thought that GM went under because they kept making cars that no one wanted. Who would have thought Bill Clinton brought them undone.
I was definitely unaware of the Howard govt’s 5% contribution to infrastructure every year. Perhaps if someone could point out exactly what it was spent on, we can clear up the misconception that they spent nothing.
And debt is bad. Again I was always under the impression that every successful company in the world, use to debt to get it to the position where it employed people, paid taxes and paid dividends.

I am not too sure how I have survived in small business for a quater of a century.

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