What Business Needs in 2012

2012 - A year when you need businesses to make profits

Statement from Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry, Australia's largest and most representative business organization, says that the public will rely heavily on the creation of new wealth and on new business profits in 2012, if the economy is to withstand the forecast global downturn, if the budget is to be returned to the planned surplus and if the carbon tax and scheduled new business costs are not to cost jobs.

"After a year of disappointment that focused on wealth redistribution instead of wealth creation, new growth is needed in the slower-lane of the Australian economy if forecast tougher times are to be resisted."
 
Unfortunately, 2012 carries the risk of rising business failures and higher unemployment due to lower global growth forecasts and increased business costs penciled in from mid-year. The Reserve Bank's two interest rate reductions in the past two months warn of tougher times ahead."
 
"2012 needs to be a year when making profits is greeted with a sigh of relief, not a dirty word. Making a profit and protecting the business bottom-line will need to be the catch-cry in 2012."
 
"With rising costs and downward forecasts, if a business is not making a profit in 2012 it's unlikely to be around for much of 2013."
 
  • "The Gillard government won't get its budget back to a sustainable surplus in 2012/13, as promised, if tax receipts from business profits don‟t grow in 2012."
  • "The unemployment rate, already forecast to be 80,000 higher than last May's forecast, won‟t stop rising unless about 200,000 new jobs are created in 2012."
  • "Higher electricity costs from the carbon tax on 1 July 2012 and higher wage and penalty costs from the same date wont be affordable unless businesses lift sales and profit margins."
 
Profits don't grow on trees. They have to be made. Business, banks, governments, the parliament, unions and the community each have a responsibility to support new wealth and new profits.
 
  • Business needs to retain confidence and a willingness to invest.
  • Banks need to provide access to capital, and fully pass interest rate reductions onto business customers.
  • Governments need to undertake an integrated set of productivity enhancing reforms. As a template, ACCI has released a 10-point Jobs and Growth Reform Agenda for 2012. This includes the Fair Work IR Review opening the way to a more flexible better balanced set of laws.
  • The parliament needs to "say-no" to new business costs, such as the seven planned rises in the superannuation levy due to be voted by the Senate in March. It should also defer its carbon tax because the Durban climate change conference has now delayed a global agreement until 2020.
  • Unions need to resist making exaggerated bargaining demands, and taking or threatening new strikes. Wage rises should be productivity linked.
  • The community needs to see businesses making profits, especially small business, as the key to job security, not government handouts or new regulation.
     
 
For further Information:
ACCI Chief Executive:
Peter Anderson 0417 264 862

ACCI Communications Director:
David Turnbull 0419 272802
 
MR160/456