New research has revealed the lasting effect of tax concerns and the federal election on the confidence of Australian CFOs.
Big four firm finds political uncertainty plaguing CFOs
According to Deloitte’s CFO sentiment research, tax reform, policy certainty and government stability were the top pre-election issues for CFOs, a sentiment that has barely shifted since similar research was undertaken by the big four firm in 2013.
“In our H2 2013 survey, when CFOs were asked to identify priorities for the new Coalition government that would improve business confidence, the same issues arose, with ‘tax reform’ and ‘consistency and stability’ emerging as the two most popular issues,” said Deloitte.
“This suggests that progress at a federal level has been lacking in the eyes of CFOs, and that ongoing stability remains a genuine source of frustration.”
While tax reform remains a concern, 80 per cent of 2016 respondents indicated that it is “the damaging influence of pervasive uncertainty” that is stifling investment, rather than the tax debate itself.
“Increasingly, commentators and policymakers alike are questioning the extent to which monetary policy can continue to do the ‘heavy lifting’ in Australia’s transition away from mining investment,” said Deloitte.
“Federal policymakers have been debating tax reform for some time now, with the aim of stimulating business investment among other things. While one might expect the back and forth nature of this debate to have discouraged investment, it appears that the impact has not been substantial.”
Deloitte noted that 40 per cent of respondents felt that fiscal stimulus is required to boost business investment in Australia. A further 30 per cent were in agreement, but also believed the state of the budget does not allow for such measures.
Comments from survey respondents identified innovation and targeted incentives (such as R&D tax schemes) as other important election issues.