WHILE consumers may have become used to the workings of the GST, it’s still a hard slog for Australian businesses.
Rather than finding it easier, trading conditions for businesses are getting worse, as the GST catches up with them.
Results from the October Dun & Bradstreet National Business Expectations Survey of 1,200 Australian business owners and senior executives indicate that 60 per cent claimed their cash flow has decreased as a result of making quarterly tax payments.
This is up from 51 per cent in July. Of this 60 per cent, 78 per cent said the reduced cash flow had made it difficult to pay creditors on time, compared with only 57 per cent making such a claim in July.
“Cash flow pressures associated with quarterly tax payments continue to make it difficult for Australian executives to pay creditors on time,” D&B Australia and New Zealand CEO Christine Christian said.
The cash flow difficulties are also having a bearing on profit expectations. Businesses expect profits to drop back in the first quarter of next year, despite an anticipated increase in selling prices and turnover.
But the survey shows a surprising resilience among Australian businesses in the midst of an election campaign, anthrax hoaxes and the uncertain international situation.
“It would indicate that, at least for now, Australian businesses are weathering the global economic downturn,” Ms Christian said.
“The housing and construction boom continues to fuel economic growth and lower petrol prices over recent months are helping to contain business costs.”
Fuelling business optimism is a strong reversal in consumer sentiment.
The Westpac-Melbourne Institute Index of Consumer Sentiment, taken from a survey during the Federal election weekend, shows sentiment rose 3.4 per cent in October after a sharp 9 per cent fall after the September 11 terrorist attacks.
Westpac general manager Economics Bill Evans said there was always likely to be an element of “statistical bounce”, however the jump was still surprisingly strong given the recent negative news.
Putting any economic recovery under question, however, is an easing back in employment expectations.
