Leadership turmoil saps business confidence

SOME of the nation’s biggest companies have hit out at the political uncertainty at both federal and state level.

SOME of the nation’s biggest companies have hit out at the political uncertainty at both federal and state level, warning that the lack of leadership is hurting long-term planning and undermining business confidence.

As a string of corporate ­majors handed down billions of dollars in combined profits, many sounded a downbeat tone on the outlook for the economy. The comments underscored a growing frustration among business leaders over the lack of ­political certainty and the government’s inability to push through its reform agenda.

Suncorp chief executive Patrick Snowball, a Briton who has headed Queensland’s biggest company since 2009, ­labelled the standard of Australian polit­ics “depressing”.

“(It is) depressing we have wallowed in political uncertainty for the 5½ years I have been running this company,” Mr Snowball told The Australian. “Big capital-intensive businesses like ours rely on some political leadership, which just isn’t there right now. We’ve wasted good opportunities.”

Handing down a record $4.6 billion first-half profit, Commonwealth Bank chief executive Ian Narev warned that weak confidence posed a “significant economic threat” and called for businesses to be given greater certainty. Mr Narev, who has long ­resisted being drawn into discussing politics, also took a swipe at the lack of a “coherent long-term plan” for the nation.

While noting that business could not just “point the finger at Canberra”, he said certainty would lead to greater investment, jobs and workers feeling more secure.

The Reserve Bank of Australia cut the official cash rate last week to a record low of 2.25 per cent in a bid to spur growth. Economists still expect the central bank to cut rates at least one more time this year, with some tipping rates to fall below 2 per cent.

Meanwhile, Boral managing director Mike Kane took a swipe at Victoria’s new Labor government for scrapping the $6.8bn East West Link toll road project, saying there had been a chronic shortage of ­infrastructure investment over the past 20 years.

“The problem I have is how Labor governments oppose major projects that create jobs,” said Mr Kane, the chief of one of the biggest building materials producers.

“The need for major projects is not going to go away. How is it Labor governments can oppose job creation through public-sector investment?”

Michael Fraser, who heads up one of Australia’s biggest inte­g­rated energy companies, AGL, said the lack of leadership was concerning, particularly on energy policy where billions of investment dollars were at stake. “One of the big issues for the industry during my time in the chair is that it has been a political football between the carbon debate, the RET debate, the CSG debate, solar feed-in tariffs,” Mr Fraser said.

“This just adds to the political instability we’ve got and I think that’s a major challenge for the ­industry. This is an industry with long-term investment horizons that needs long-term stability and certainty from both sides of polit­ics in terms of the policy settings.

“This week has highlighted how far removed we are from that.”

Goodman Fielder chief Chris Delaney, whose company ranks as one of the nation’s biggest food manufacturers, said shoppers were increasingly nervous and Australia was in danger of losing the political appetite for reform.

“Stability in government would be very helpful, it would continue to allow a government to be looking at what are the long-term solutions they want to put in place instead of trying to preserve the government of the day,’’ he said.

Additional reporting: Matt Chambers, Eli Greenblat