Australias top chief executives are deeply concerned by the governments lack of control of the nations debt and an internationally uncompetitive tax system, a survey has found. Accounting firm PwC surveyed 44 of the nations leading chief executives who said over-regulation, the governments response to the fiscal deficit and debt and the increasing threat of rising taxes were the biggest threats to business growth. Woolworths chief executive Grant OBrien said his concerns about government regulation related to strict trading hours that were hurting bricks and mortar retailers, whereas online, people could shop anytime. Weve got a government investing billions of dollars into the national broadband network, he said. From a retail point of view it enables [customers] to shop internationally 24 hours a day, seven days a week. So I dont get why the government invests in that and yet a government, and albeit it may be a state government say well, you cant open your stores before 9 oclock and you must have them closed by 4 oclock on a Sunday. PwC chief executive Luke Sayers said both business and government bore the responsibility of the failure to deliver outcomes to secure Australias long-term economic future. Part of that problem is clearly a difficult senate, but the broader and more important issue is a failure, both by business and government, to properly communicate the rationale for change to the broader community, he said. The 18th Annual Global CEO Survey, which collected opinions from 1322 CEOs worldwide, including 44 Australians, found that an almost-unanimous 95 per cent of CEOs said over-regulation was a threat to their business growth. Globally, this figure was 78 per cent. Other economic and social threats to growth was the Coalitions handling of the budget deficit, four out of five Australian CEOs surveyed said, while 64 per cent listed the increasing tax burden. The number one priority for 74 per cent of Australias top chief executives was for the government to create an internationally competitive and efficient tax system, but about two-thirds said it had been ineffective in its efforts. The survey results come after a November company directors survey found confidence in the Coalition had fallen to its lowest point since the 2013 election. Disruption is also playing on the minds of the nations CEOs. Of the business threats to organisational growth, 79 per cent said new market entrants posed a threat, while 67 per cent said the speed of technological change was a threat. Qantas CEO Alan Joyce said the disruptors for the airline industry were the Chinese carriers. By 2020 I think the international forecast is that the Chinese airlines will be the biggest in the world, he said. Theyre investing very heavily in new technology ... and theyll be highly competitive from a product point of view, compared to the Middle East and the other Asian hubs. In the insurance business, QBE Groups John Neal said the disruptors were found in the motor and home insurance markets rather than the large, complex risk-coverers like QBE, but that did not mean that they could be ignored. Youve got to look at the disrupters and see what you can learn from them, because they often come in withsome very smart innovation and different service proposition, Mr Neal said. It is not all doom and gloom for Australian business. In a sign of growing confidence of improved conditions, more than half of Australian CEOs plan to grow their workforce in the next 12 months. In comparison, 12 per cent said they planned to cut staff. Internationally, that number is 21 per cent. When talking to clients the mood seems to be one of cautious optimism, and its pleasing to see that being borne out in areas like hiring intentions, PwC Australia chief executive Luke Sayers said. But looking internationally, sentiment about global growth has stagnated in the past 12 months among those surveyed. Just 38 per cent think global economic growth will improve, a 4 per cent increase from last year. Mr Neal said challenging pricing conditions in the market forced the company be hyper-focused on risk. Looking 24 to 36 months out, theres every indication that well probably start to see some momentum in interest rates. Even a small rise in global interest rates, say a 1 per cent change, could have as much as a $1 billion impact on our performance. So thats very, very critical for us, he said. China was the destination for off-shore growth for the majority of chief executives. But Mr Sayers said Australian investment and business activity in Asia was woeful. We invest more in New Zealand than we do in both China or Indonesia and we cant assume geographic advantage automatically translates to economic advantage in the Asian region, he said.
Posted on: Tue, 20 Jan 2015 21:41:03 +0000
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