Economic instability and an inability by the government to make solid decisions is leading local businesses to act with greater caution, despite steady levels of optimism in the private business sector.
According to Grant Thornton’s International Business Report, Australia is one of just nine countries that’s maintaining optimism among privately held business. Despite this positive outlook, they’re moving forward with caution, concerned by Government uncertainty and the troubled environment overseas.
“We’ve almost got full employment in Australia and this increased employment indicates growth. Privately held businesses are beginning to feel the stresses of a few years ago when it was hard to find the appropriately skilled people,” Grant Thornton partner Bill Shew said.
The report found 83 percent are expecting to offer employees a pay rise over the next 12 months, 14 percent of which indicated they’d offer employees a rise above inflation rates.
Continued strengthening relationships with financial institutions and positive signs of sustained growth are seen as drivers of the steady optimism.
“We are now seeing banks and businesses starting to come together again. Australian privately held businesses are starting to feel that they are receiving increased support from their banks, with more discussions being had to facilitate growth and stability.”
Causing caution amongst local privately held business is the inability of the government to make decisions in this current political climate.
“Australian privately held business has been affected by the uncertainty and negativity surrounding the current political landscape. It is difficult to plan for, and fund, future growth when major reforms such as the Carbon Tax and the Minerals Resource Rent Tax continued to be debated,” Shew added.