Small business backs September 14 election date but warns of delay to investments

The business community has expressed a mixed reaction to Julia Gillard’s shock announcement of a federal election on September 14, saying it will both provide certainty for businesses but still cause some to delay crucial investment decisions.

Gillard made the announcement in a speech at the Press Club yesterday, with reports indicating only a few ministers knew before it was confirmed. It is the longest lead-time for an election date in Australia’s history.

Peter Strong of the Council of Small Business of Australia welcomed the announcement, telling SmartCompany the decision has virtually no downsides.

“These investment decisions were going to be delayed anyway, everyone knew there was an election coming,” he says.

“We know exactly when it is now. There was some uncertainty as to whether the election would come later or even before the budget. Now we know it’s in September, and we know there will be a [Gillard government] budget this year.”

Others disagree. Paul Drum, head of policy at CPA, says the only certainty business has is a date – other factors such as what the government will target for cost savings are still up in the air.

Although Gillard yesterday hinted the government will continue targeting high income earners for savings, Drum says more concrete plans are needed.

“In the next two weeks I’d like to see the government and opposition come out with a framework of their vision and also their policy platform.”

“We need to see plans that will detail how the government and opposition will enhance our international competitiveness: The delivery of Asian Century initiatives, improved infrastructure and the transition to a knowledge economy are all key components of this.”

The Australian Chamber of Commerce and Industry also provided a mixed response. Chief executive Peter Anderson said the business community welcomes the announcement, but like Drum, said the uncertainty about policy is disappointing.

Given this was always an election year, the early announcement of the date doesn’t add or detract greatly to business certainty this side of September 14 but its real value is the knowledge that the last quarter of the year will be uninterrupted by an election.

Anderson also said the election should focus on workplace productivity, tax reform, better infrastructure and the reduction of red tape.

Innes Willox, chief executive of the Australian Industry Group, made a similar announcement saying the certainty is welcome, but noted the eight-month campaign cycle will put some business decisions on hold.

“Business will now be looking to both parties to provide the community with a clear vision of their policies well ahead of the election,” Willox said.

The AIG also listed a number of its own areas of concern, including the Australian dollar, productivity growth, energy costs and climate change.

Paul Drum of the CPA also raised the concern the government could head into caretaker mode, which would see it delay policy measures which have already been announced.

“We need to see plans that will detail how the government and opposition will enhance our international competitiveness.”

“The delivery of Asian Century initiatives, improved infrastructure and the transition to a knowledge economy are all key components of this.”