Sentiment amongst Australia's company directors has risen to its highest level in two years following the recent appointment of Malcolm Turnbull as Prime Minister.
This was one of the key findings to emerge from the Australian Institute of Company Directors (AICD) — Director Sentiment Index (DSI) for the second half of 2015.
Overall sentiment among company directors increased 9.6 points in the past six months, reversing a downward trend that began in the second half of 2013.
Notably, the DSI reported that the number of directors who believe the Federal Government understands business has surged from 24 per cent to 46 per cent in the second half of 2015, with Australia's directors indicating strong support for tax reform.
The DSI found that changes to the GST were a priority for directors, with 82 per cent of them saying the GST should be raised, broadened or both. Overall, directors want to see the GST, multi-national tax arrangements and personal income tax as priorities in any future tax reform package.
"Our survey results clearly indicate the direction the Government should take — tax reform and a detailed infrastructure plan are the top priorities," AICD managing director and chief executive, John Brogden said.
Asked to rank the top three economic challenges currently facing Australian business, respondents listed global economic uncertainty as the number one challenge, followed by low productivity growth and an ineffective tax system.
Other key findings in the DSI include:
- Almost 90 per cent of directors say Government spending on infrastructure projects is too low;
- About 60 per cent of directors still see the Australian economy as weak;
- 50 per cent of directors expect the Australian economy to remain weak over the next 12 months.
"These are important issues that will impact the nation's future and are additional evidence that Australia needs a bold new policy framework and commitment to innovation if its past prosperity is to be maintained," Brogden said.
The DSI measures the opinions, priorities, intentions and expectations of Australia's company directors, of which 521 participated in the current survey.