“Corporate confidence is at its lowest level in around two years and this is partially due to the instability in our political leadership”, states a recent article published in the Financial Review
Thomson Reuters’ Managing Director for Asia and Emerging Markets, Tony Kinnear, says political chaos in Canberra is affecting investment as well, with multinationals questioning future investment in Australia after yet another change of Prime Minister.
NAB’s latest monthly business confidence survey showed business confidence fell 3 points to a below-average reading of 4 points in August, extending its recent run of losses.
Kinnear advised that the changing political environment had left an overriding sense of uncertainty in boardrooms across the region, including concern about what tax rules would be now and after the federal election.
“Clearly the Turnbull government had a very well-articulated policy around corporate tax which I think, generally speaking, was well understood in Asia,” he said.
“With the change in government, uncertainty on whether the current government will stay and a lack of clarity around what Labor’s policy will be, I think there’s a lack of certainty about the near future.
“Certainly Asian multinationals who are looking to invest globally will look to put their capital inside countries that have a reasonable level of certainty.”
Mr Kinnear called for Australian-based companies to take full advantage of the new free trade agreement with Indonesia, expected to be finalised before Christmas.
The government expects 99 per cent of Australia’s trade with Indonesia will have tariffs reduced or eliminated under the deal.
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