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Political uncertainty causing 'lead weight' on economy

THE uncertainty emerging from politics in Canberra has been dubbed a "lead weight" on the economy, dragging down business confidence, a new report shows.

The latest Deloitte survey of leading chief financial officers, to be released on Thursday, shows the policy uncertainty created by the Abbott Government's budget and Senate machinations had dragged confidence down to a minus 62% rating in the December quarter.

Deloitte chief operating officer Keith Skinner said it marked a "vicious cycle" of "a psychology of pessimism starting to prevail".

Mr Skinner said the uncertainty in the business environment and global and local factors were seeping into business's appetite to invest and take on more risk.

He said despite industry hopes of the change in government in 2013, Canberra "appears to still be a lead weight on business confidence" and disappointment and frustration had replaced optimism "as the budget stalemate continues".

The survey also noted that business pessimism had "taken hold" about the slowing of China's economy, which despite improvements in the United States's prospects had dragged CFO confidence down to a minus 46% rating in the past quarter.

More than 80% of leading CFOs said they expected current conditions to remain for at least another 12 months.

Topics:  economy politics


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