Australia’s business leaders are more confident than they’ve been in six years, according to a survey of more than 1,100 company directors released today by the Australian Institute of Company Directors.
The bi-annual Director Sentiment Index shows that those sitting around Australia’s boardroom tables are feeling particularly bullish about domestic conditions, with sentiment on investment levels and staff hires at their highest point since 2011.
Directors’ confidence about the growth of their primary business is also at its highest level ever, with 57% of directors expecting their business to grow over the next 12 months.
The Index is the only indicator measuring the opinions and future intentions of directors on a range of issues including the economy, government regulation and governance regulations.
AICD Chairman Elizabeth Proust AO said that the increase in business sentiment was primarily driven by increasing confidence around domestic and international economic conditions.
“Directors’ confidence in the outlook for the Australian economy rose significantly, as did their expectations around the health of the US and Asian economies. Concerns around global economic uncertainty and a China slowdown also dropped substantially,” she said.
“These results show that directors feel buoyed by the economic outlook and are taking a positive growth mindset.
“However, directors remain concerned about the ability of the Government and Parliament to drive reform and growth, with 86% rating the current quality of public policy debate in Australia as poor. Directors also ranked less focus on short-termism as the number one measure to boost productivity.”
The AICD last month released its Blueprint for Growth national reform policy which recommended a range of structural reforms to improve public policy debate and encourage longterm thinking including the introduction of fixed, four year terms for the Federal Government.
Ms Proust said directors rated taxation reform as the most important short-term issue for the Federal Government to address, followed by energy policy and infrastructure.
“Infrastructure ranked as the top issue for the Federal Government to address in the long-term, closely followed by climate change, tax reform, an ageing population and energy policy.”
Given current concerns around housing affordability, directors nominated tighter controls on foreign purchases, a boost to housing supply through streamlined approvals and changes to negative gearing arrangements as the top three measures governments should prioritise to address the issue.
Other key findings form the AICD’s Director Sentiment Index 1st Half 2017 include:
- Directors are more pessimistic regarding the level of corporate taxation in Australia in the 1st half of 2017, with 60% holding the belief that it is too high.
- Only 25% of directors believe the current AGM system is working well.
- Almost 70% say there is a risk-averse decision making culture on Australian boards.
To access the Executive Summary of the Director Sentiment Index, please click here.
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