Customer Centre

Bill Pay Info | About Customer Centre

Sluggish demand and carbon tax shake ACT businesses

June 30, 2011

Weak consumer spending and the proposed carbon tax have given ACT small businesses reason for concern, according to the Sensis® Business Index released today, but they remain the nation’s most optimistic.

 Report author Ms Christena Singh said the ACT business confidence indicator had fallen sharply during the quarter as it had in many other states and territories.

 “ACT businesses have experienced a weak quarter of trading and expect worse conditions over the coming quarter. On top of this, we are also starting to see concerns surface about the proposed carbon tax and the long-term outlook for the Australian economy,” she said.

 Given the topical nature of a proposed carbon tax in Australia, the Sensis® Business Index also asked ACT small businesses specifically about their views.

 Thirty-four per cent of ACT businesses said they did not understand the proposed carbon tax, while 46 per cent said they partially understood. Twenty per cent said they had a thorough understanding.

 Fifty-two per cent of ACT small businesses said a carbon tax would have a negative impact on their business, while 40 per cent believe it would have no impact. Eight per cent believe it would have a positive impact.

 According to the findings, ACT small businesses are most concerned about a carbon tax impacting on costs, with lower consumer demand and a negative impact on the economy also key reasons.

 For those ACT businesses that felt the carbon tax would have a negative impact on their business, nine per cent said they would consider modifying products and services, while six cent said they would look at introducing new products as well as decreasing staff, and two per cent would look at selling or closing their business.

 ACT businesses are the nation’s least likely to consider selling or closing their business as a result of a carbon tax (two per cent compared with a national average of nine per cent).

 Key ACT findings from the June 2011 Sensis® Business Index:

·         Business confidence fell from 62 per cent to 47 per cent (28 per cent nationally)

·         Profitability fell from negative four per cent to negative 12 per cent (negative14 per cent nationally)

·         The sales indicator fell, down seven percentage points to negative six per cent (negative14 per cent nationally)

·         Overall employment by ACT small businesses weakened during the quarter, taking the indicator from two per cent to a flat zero per cent (one per cent nationally)

·         Support for the ACT Government was steady at negative 14 per cent.