Business confidence lifted by more than 5% in September following a near 12-month low in August, while the number of businesses that expect their business to be better off financially this time next year increased by 4%.
These are the findings of Roy Morgan Research’s Business Confidence, which is based on 1049 interviews with a cross section of businesses across Australia.
The company attributes the 5.8% lift in business confidence to 114.9 last month to increased confidence about the year ahead, noting the result follows the passing of the Turnbull Government’s middle-income tax cuts and the ‘Omnibus’ Bill with $6.3 billion in Budget savings.
Approximately 41.3% of businesses expected their business to be better off financially this time next year than currently (up by 4%), compared to 20% that believed they will be worse off (down by 0.1%).
In addition, there was a 5.8% lift in the number of businesses that say the next 12 months is a good time in invest in growing the business (to 54.3%), while the number of businesses that say it is a bad time dropped by 1.6% to 39.9%.
Michele Levine, CEO of Roy Morgan Research, notes business confidence increased in all states except Queensland, which experienced a slight drop.
“Tasmania continues to have clearly the highest business confidence in the nation while the resource rich State of Western Australia continues to lag the rest of the nation with the lowest business confidence.”
According to Levine, the next major focus for the Government is passing the significant business tax cuts as foreshadowed in the Federal Election.
“The Government has pledged to reduce the corporate tax rate for large businesses to 25% (from the current 30%) over the next decade,” she says. “In a sign that businesses believe the Government will be able to pass this legislation, now 54.3% (up 5.8ppts) of businesses now say the next 12 months will be a ‘good time to invest’ in growing the business.”
Levine believes the successful legislation of the proposed tax cuts will provide an important stimulus for the Australian economy dealing with several economic headwinds over the next few years, including in the car manufacturing industry with the closure of Holden and Toyota.