With the federal election now behind us, there has been a dramatic bounce in business confidence.
With political stability restored, the landscape for business in Australia has changed.
The newly appointed Coalition government has vowed to move quickly to boost the economy by cutting taxes and building new infrastructure.
Prime Minister Tony Abbott has also promised to scrap government taxes on carbon emissions and the profits of large mining companies, introduced by Labor.
Two recent surveys show the change of government, low interest rates and the falling Australian dollar will deliver growth this year.
More than 600 business surveyed by National Australia Bank have displayed a surprising level of optimism about the months ahead.
The monthly confidence index increased by its sixth-highest ever level in August – from -3 to 6 in net terms.
And another survey released by recently by Citi shows the falling Australian dollar is already boosting confidence among exporters.
Citi's Scott Southall says companies are forecasting much higher export volumes this year.
“This quarter’s report underscores that manufacturing workers have a real sense of optimism about the number of career opportunities that exist today,” Mr Southall said.
With the proposed abolition of mining and carbon taxes, mining executives are also exhibiting a “new sense of optimism.”
And consumer confidence climbed sharply in September. The Westpac/ Melbourne Institute Index of consumer sentiment climbed 4.7 per cent in September from August to 110.6 points – above the 100-point level that means optimists outnumber pessimists.
Many of the Coalition’s pre-election policies are designed to stimulate manufacturing and small business, including:
- A promise to cut the company tax rate by 1.5 percent.
- Slashing red tape to save small business $1 billion a year.
- Making Small Business a cabinet portfolio within the Treasury department.
- Creating a new ministry for Trade and Investment
- Establishing a manufacturing Transition Fund to provide grant funding of up to $10 million for “new and expanding manufacturing sectors.”
- Restoring funding to Export Market Development grants, to assist SMEs.
- Creating a new $80 million HECSstyle apprenticeship support scheme.
These new measures will be welcomed by manufacturers who continue to struggle, despite recent sharp falls in the Australian dollar.
Manufacturing activity has contracted for 26 months up until August, battling headwinds from the strong Australian dollar, tough overseas competition, cheap imports and a shortage of skilled workers.