Pitcher Partners Federal Budget Survey

By Sabine Wolff - May 4, 2017

Pitcher Partners has conducted a survey of our clients to gauge their expectations and hopes for the 2017-18 Federal Budget.

"The government is on the right path by identifying the difference between 'good' and 'bad' debt, as that is how businesses operate. They have long- and short-term debt and the short-term debt is typically financing working capital needs of the business and the long-term debt is financing capital outlays," said Mark Harrison, Partner at Pitcher Partners.

"People historically had high hopes of this government but they've been relatively slow on policy that encourages business. Everyone hoped there would be greater simplification of the business environment including taxes.

"Our clients expectations are that the economy is tracking sideways. There's not expectations of very significant growth this year. Those statistics show that everyone is still positive, but the overall conservatism is shown in how they're going to apply any gains to debts. At the same time, there's some hesitancy and people think their supply chain and wage costs will go up, which will lead to high prices for them."

See the full story in the AFR.

 

Table 1: Priorities for the 2017 Budget

 

Response %

Funding major infrastructure projects

74.9%

Making the tax system simpler

60.4%

Balancing the Budget

58.9%

Cutting taxes for small to medium business

48.1%

Improving housing affordability

44.4%

Increasing social spending, i.e. in areas like health, education, welfare etc

33.7%

Cutting personal income taxes

32.6%

Helping businesses achieve technological transition

26.1%

Encouraging foreign investment

16.6%

Cutting taxes for big business

11.7%

Other

22.4%

Q. What do you think the government’s priorities should be in this upcoming 2017 Federal Budget? Please choose the five most important from the list below.
Sample: n=513

Respondents could choose up to five priorities; totals will not add to 100%

 

Table 2: Creating a business-friendly economic environment

 

Response %

All of the time

1.0%

Most of the time

20.9%

Some of the time

58.3%

Not at all

14.4%

Not sure

5.5%

Q. Thinking broadly about the government’s economic policy, does the government create an environment where businesses like yours can succeed?

Sample: n=513

 

Table 3: Economic management

 

Response %

Very well

0.2%

Well

35.9%

Poorly

47.8%

Very poorly

11.7%

Not sure

4.3%

Q. How well is the government performing when it comes to managing the broader Australian economy?

Sample: n=487

 

Table 4: Attitudes to the upcoming Budget

 

Very positive

Positive

Neither positive nor negative

Negative

Very negative

Not sure / NA

Your business

0.6%

14.6%

48.5%

20.1%

1.8%

14.4%

The Australian economy

0.8%

17.7%

41.1%

25.9%

4.7%

9.9%

You personally

0.2%

5.3%

49.9%

31.6%

4.9%

8.0%

Q. Thinking specifically about this year’s upcoming Federal Budget, do you think it will have a positive or negative impact on:

Sample: n=487

 

Table 5: Attitudes to the upcoming Budget in comparison to last year

 

Much better

A little better

About the same

A little worse

A lot worse

Not sure / NA

Your business

1.0%

14.0%

52.6%

16.8%

5.1%

12.3%

The Australian economy

1.4%

16.8%

44.6%

22.6%

6.8%

7.2%

You personally

0.2%

11.5%

53.2%

24.6%

4.9%

5.5%

Q. Do you expect this year's Budget to be better or worse than last year’s Budget for:

Sample: n=487

 

Table 6: Importance of balancing the Budget

 

Response %

Very important

38.6%

Somewhat important

39.4%

Not so important

17.2%

Not at all important

4.3%

Not sure

0.4%

Q. How important is it for the government to balance the Budget?

Sample: n=487

 

Table 7: Creating an environment for business growth

 

Rating average

Invest in infrastructure (i.e. rail, ports, internet, regional cities, etc)

6.20

Simplify the tax system and cut red tape for business

6.19

Invest in science, technology, engineering and maths education

5.43

Invest in innovation

5.43

Reduce personal tax rates

5.03

Reduce corporate tax rates

4.96

Assist businesses with the shift to a more highly skilled and technologically literate workforce

4.88

Reduce barriers to international investment

3.90

Place a levy on imports

3.15

Q. Here are some things that other businesses have said government could do to create a better environment for business growth. Please rank the following issues in order of how much of a difference they’d make to your business

Sample: n=397

Responses were ranked on a scale of 1 to 9; higher rating averages imply issues would make a more positive difference

 

Table 8: Making a difference for small and medium business

 

Response %

Reducing red tape

39.2%

Giving small and medium businesses the ability to instantly write off investment

31.4%

Providing support for additional education and training for staff

12.5%

Increasing the $10 million threshold for reductions to company tax

11.5%

Other

5.5%

Q. Thinking specifically about things government could do to help small to medium businesses, which of the following would make the most difference to your business?

Sample: n=401

Respondents could choose up to five priorities; totals will not add to 100%

 

Table 9: Applying the company tax rate savings

 

Response %

Reducing company debt

34.6%

Investing in technology

29.2%

Employing more staff

21.9%

Paying out business owners

20.8%

Other

15.7%

Q. If your company is eligible for the lower company tax rate, how are you planning to apply the savings?

Sample: n=356

Respondents could choose up to five priorities; totals will not add to 100%

 

Table 10: Appropriateness of international tax law

 

Response %

International tax laws should be stricter as international companies are disproportionately advantaged compared to Australian businesses.

73.9%

International tax laws are too restrictive; instead, the government should do more to encourage foreign investment in Australia.

26.1%

Q. Some people have advocated for greater foreign investment and trade, while others think that there is already too much foreign influence in Australian business. One way governments try to balance the level of foreign investment with support for local business is through tax law. Which of these two statements best reflects your opinion?

Sample: n=383

 

Table 11: Superannuation

 

Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

Not sure

Contribution caps for people adding to their super should be higher for older Australians.

59.2%

26.9%

6.2%

6.0%

1.7%

The government should give Australians a guarantee that it won’t make any changes to the current superannuation system for the next 25 years.

38.1%

28.9%

15.7%

13.9%

3.5%

Contribution caps for people adding to their super should be higher for women.

24.9%

34.8%

13.2%

19.4%

7.7%

Q. We’d also like to ask specifically about superannuation. What is your level of support for the following statements?

Sample: n=402

 

Table 12: Business forecasts

 

Increase a lot

Increase a little

Stay about the same

Decrease a little

Decrease a lot

Not sure / NA

Staff numbers

2.0%

30.8%

50.6%

7.4%

0.5%

8.7%

The price you charge for goods/services

2.5%

50.1%

36.6%

4.3%

0%

6.4%

Supply chain costs

8.4%

50.9%

27.0%

2.3%

0%

11.5%

Wage costs

5.4%

66.1%

20.7%

0.8%

0%

7.1%

Q. Finally, we’d like to ask a few questions about your expectations over the coming year. Do you expect the following inputs and outputs of your business to increase or decrease over the coming year?

Sample: n=393

 

Table 13: Economic indicator forecasts

 

Increase a lot

Increase a little

Stay about the same

Decrease a little

Decrease a lot

Not sure / NA

Exports

3.3%

40.2%

41.0%

9.4%

1.0%

5.1%

Australian economic growth forecasts

0.8%

37.2%

39.8%

19.6%

1.8%

0.8%

International investment

3.3%

32.1%

46.9%

11.7%

1.8%

4.1%

Business confidence

1.5%

33.8%

34.1%

24.9%

3.8%

1.8%

Consumer confidence

1.0%

26.2%

38.9%

28.0%

4.8%

1.0%

Q. What do you expect the following economic indicators to do over the next year?

Sample: n=391

 

Table 14: Economic sector forecasts

 

Very well

Well

About the same as always

Poorly

Very poorly

Not sure / NA

Financial and insurance services

5.1%

38.4%

47.6%

5.4%

1.0%

2.6%

Accommodation and food services

4.6%

42.3%

40.8%

8.5%

0.3%

3.6%

Construction

7.2%

38.6%

34.8%

14.1%

2.0%

3.3%

Healthcare and social assistance

7.4%

38.1%

35.5%

13.6%

1.5%

3.8%

Information media and telecommunications

4.3%

38.6%

39.4%

12.8%

0.5%

4.3%

Rental, hiring and real estate services

4.4%

35.2%

44.0%

11.8%

1.0%

3.6%

Professional, scientific and technical services

3.3%

35.2%

45.0%

10.8%

0.5%

5.1%

Agriculture, forestry and fishing

4.1%

31.8%

42.6%

13.3%

1.5%

6.7%

Education and training

3.6%

26.9%

49.1%

15.1%

1.3%

4.1%

Electricity, gas, water and waste services

6.2%

28.6%

37.6%

20.4%

3.4%

3.9%

Transport, postal and warehousing

1.8%

24.7%

52.8%

15.2%

1.0%

4.4%

Administrative and support services

1.3%

16.2%

65.9%

10.0%

0.8%

5.9%

Mining

1.3%

27.5%

40.9%

21.9%

3.9%

4.6%

Wholesale trade

0.3%

17.7%

60.3%

13.8%

1.0%

6.9%

Public administration and safety

0.8%

11.8%

62.7%

15.2%

2.1%

7.5%

Arts and recreation services

1.0%

13.4%

56.4%

18.3%

3.1%

7.7%

Retail trade

0.3%

9.3%

45.4%

35.6%

4.9%

4.6%

Manufacturing

0.3%

5.4%

35.3%

45.4%

9.3%

4.4%

Q. How do you expect the different sectors of the economy to perform over the next year?

Sample: n=391


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