Business confidence evaporated shortly before Malcolm Turnbull took over as prime minister, according to research published today by Sensis.
The latest Sensis Business Index shows there was a four-point decline in business confidence this quarter, meaning business confidence is down to levels not seen since before the May budget.
However, the survey of 1000 small and medium businesses was taken before the Liberal Party leadership coup.
Since taking the top job Turnbull has been talking up the economy.
The Sensis index shows new prime minister may have a tough task ahead of him. Business confidence declined across Australia this quarter, except in New South Wales, the Australian Capital Territory and Queensland.
South Australian businesses have the dreariest outlook on the economy, while those in Canberra have the most optimistic view.
Around 87% of SMEs believe the Australian economy is slowing or standing still, according to Sensis, while just 13% who were polled believe the economy is growing.
Sensis chief executive John Allan said business confidence had been eroded since the announcement of the Government’s budget sweeteners for small business in May.
When asked about their support for the federal government this quarter, the number of SMEs who said the government’s policies worked against small business doubled from 12% to 24%.
“Given recent events on global stock markets and with Australian unemployment on the rise, it is not surprising to see that only 13% of businesses think the economy is growing,” Allan said.
“In South Australia and Western Australia, that figure drops to only 4%. This survey shows the government has failed to consolidate the support it generated with its popular May budget. Only in Tasmania was there a rise in support, with that state now by far the most supportive of the federal government.”
Turnbull has been attempting to turn around business confidence by hinting at a tax reform package and pledging to release a suite of policies designed at encouraging innovation before Christmas.
Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany small businesses have certainly welcomed the leadership change.
“Confidence has risen, there’s no doubt about that,” Strong says.
“Nobody says it’s a bad change, not one person [small business owner] I’ve talked to.
People have said they’re disappointed about Bruce Billson [who lost his job as small business minister], but they’ve still looked at the overall picture.
“People think it’s about getting away from the concentration from boats and talking about innovation. We’re hearing good things.”
Strong says while it’s early days, it appears small businesses have little to fear from the Turnbull government.
“The big question mark for all of us is, is the big end of town going to have too much influence or not? Time will tell,” he says.