Business Confidence

The Hon. D.G.E. HOOD (14:36): My question is to the Treasurer. Treasurer, can you indicate what the latest NAB survey shows about business conditions and confidence here in South Australia?

The Hon. R.I. LUCAS (Treasurer) (14:36): As I have indicated on a number of occasions previously, one of the critical elements nationally, but also in South Australia, to economic recovery post COVID is obviously business conditions but also business confidence. So the continued monitoring of how business confidence tracks is an important element of how our state emerges in terms of creating jobs and economic recovery. There are a number of surveys that look at business conditions and business confidence, the latest of which have been Business SA's Survey of Business Expectations and also the NAB Monthly Business Survey, which has only just been released in the last 24 hours, I think it was.

Importantly, in relation to monthly business survey conditions—that is, what small and medium-sized businesses believe the conditions that apply to their business are at the moment—it is important to note that for businesses in South Australia their understanding of their business conditions rose in May 2021 to be close to the record high level recorded back in December 2020. I think importantly for national economic recovery conditions, business conditions also rose in May to be at a record high level in seasonally adjusted terms—so not just in South Australia but, importantly, nationally there has been a rise.

That also mirrors the recent Business SA Survey of Business Expectations, which saw a significant rise in the March quarter in terms of business conditions; that is, the last time the March quarter index had reached such a high was over 13 years ago, in the December quarter of 2007 at the back end of the pre-GFC boom. So I think business conditions are an important indicator.

In relation to business confidence, the NAB monthly survey actually shows a slight dip in business confidence nationally, across all states, in the last month compared to the previous month, and that was also mirrored in seasonally adjusted terms in South Australia as well. So, from an economic recovery viewpoint, anything that leaders in the community—parliamentary leaders, government leaders and community leaders—can do that assists in the building of business confidence is an important element of economic recovery, because if business leaders are not confident in their future they (a) won't invest in the future, and (b) won't start creating jobs for South Australians.

I think the recent ABS figures, in terms of investment, at least demonstrated that on the first element in South Australia there had been a significant increase in private sector capital investment over the last 12 months, I think, at record levels of just over 20 per cent. That is an important indicator that businesses are still investing, assisted, no doubt, by commonwealth government policies in relation to instant tax write-offs. That is an important element of business investment in their future.

There is a slight dip in business confidence in the NAB survey in all states, and nationally as well, a slight dip in South Australia as well, but it is something that we all collectively need to work on in terms of trying to encourage business confidence in the state's future. Whatever our political persuasion might be, our collective best interests as a state are served by businesses being confident enough to invest and to help create jobs.