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Mining provides bright spot as business looks to govt for confidence

Business

Queensland business sentiment has lifted from the height of the pandemic shutdowns with a “tinge of optimism’’ returning, but questions remain about how long it can be sustained.

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Two business surveys released today show there is reason for hope, but business investment was still expected to fall by 15 per cent this year.

Government stimulus was expected to bring opportunities but business said it needed the state and federal governments to provide confidence.

The Deloitte Access Economics survey said the timing of the economic recovery was uncertain and business was questioning whether it would get worse before it got better.

Deloitte said mining investment was likely to perform relatively well amid strong demand from China.

“Yet there’s an important caveat. Energy prices – including gas prices – have fallen sharply through 2020,’’ its report said.

“When the latest COVID-19 outbreak is contained, the focus of government efforts will shift to stimulating the economy, and infrastructure investment is set to play a fundamental role in this stimulus effort.

“Enhanced cooperation between the Federal, State and Territory governments means that environmental approvals may take only one-third of the time they usually do, and the aim is that the total assessment and approval process will be condensed from three-and-a-half years to just under two years. This is no small task.

“The fast-tracking of approvals may mean that more of these projects progress through to construction – and sooner – than would otherwise be the case. Adding to this, there is also the potential for new project announcements in coming months that would add to the existing pipeline of work.”

The Chamber of Commerce and Industry Queensland Pulse survey showed business in the state had been under extreme pressure and 54 per cent of respondents were concerned about their viability after government subsidies were lifted.

CCIQ economist Jack Baxter stated that findings, which came from a survey done at the height of the lockdowns, showed the extreme stress businesses were still facing with nearly every indicator reflecting the second-worst results on record.

“Despite ongoing uncertainty, there has been an improvement in business sentiment surrounding the performance of Queensland’s economy, rising 11.9 points from March. This is credited to stimulus support, the easing of restrictions and anticipation of the border reopening” Baxter said.

“The majority of businesses are experiencing a downturn in their turnover and profitability, which is impacting all areas of their operations, including hiring intentions, capital investment and general productivity,” Baxter said.

CCIQ general manager of advocacy and policy, Amanda Rohan, states that optimism uplift presented a window of opportunity to grow business confidence and it was up to all political parties ahead of the State election to set out their plans for business and our economy.

“From this survey, we can see businesses have a tinge of optimism, but 54 per cent of businesses indicated they’re concerned about their viability beyond 12-months, when many of the stimulus measures end,’’ Rohan said.

“What will last and what will strengthen our economy is business-friendly policies, activating infrastructure projects to give regions a flow of work and enabling businesses to connect, employ and grow.”

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