The Australian Institute of Company Directors (AICD) have urged the Federal Government to reconsider its determination to see a budget surplus in 2012-13, saying it is risky to pursue the goal given the economic volatility.

 

The AICD conducted a survey for the April 2012 Director Sentiment Index, finding that almost 60 per cent of directors say that the surplus is not vital for the Federal Government, while only 26 per cent said otherwise.

 

The Index, which measures the opinions and future intentions of the director community, has ranked overall director sentiment as slightly pessimistic but there are signs of increasing optimism about the economy and greater confidence in the general business outlook.  

  

“The findings reveal that directors’ sentiment and their business’ prospects are less pessimistic than they were in November 2011, though they are still more pessimistic than they were at this time last year,” said CEO and Managing Director of the Australian Institute of Company Directors, John Colvin.

 

The high value of the Australian dollar (38 per cent) and industrial relations concerns (25 per cent) round out the top three economic challenges identified by Australian directors. The impact of the minority Federal Government has fallen from the number one ranked challenge to the fourth (49 per cent in November 2011 to 24 per cent this survey).

 

Rather than pursue a budget surplus, directors would rather the Federal Government to allocate greater resources in areas such as infrastructure, health, education and business regulation.

 

The survey also found a shifting opinion of the National Broadband Network, with 45 per cent saying that the NBN is a negative thing for the country, down from 55 per cent last year. While 43 per cent say its positive, up from 35 per cent last year.

 

There are also signs that directors’ concerns about the carbon tax are lessening, with significantly fewer directors (16 per cent in this survey, down from 31 per cent in November 2011) identifying the carbon tax as one of the main economic challenges facing business. Nevertheless, more than 60 per cent of directors still believe that the announcement and legislation of the carbon tax will impact their business negatively.  This is unchanged from the last survey.