Australian Company Directors Join Growing Number of People Losing Faith in Abbott Government

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By Vittorio Hernandez | May 12, 2014 8:16 AM EST

Should the 8-month-old Coalition government start to worry about the party's future in Australian politics?


Chinese President Xi Jinping (4th L) attends a meeting with Australian Prime Minister Tony Abbott (4th R) at the Great Hall of the People in Beijing, April 11, 2014. REUTERS/Parker Song/Pool (CHINA - Tags: POLITICS)

Besides suffering a drastic reduction in its approval rating because of its planned deficit tax, the Abbott government is not only losing the trust of voters and ordinary Australians, but even corporate Australia.

The latest Australian Institute of Company Directors (AICD) survey found that only 30 per cent of respondents expect the federal government to have a positive impact on how enterprises make their business decisions.

Likewise, there was a major shift in opinion on the percentage of company directors who believe the Abbott-led government understands business with the numbers sliding down to 48 per cent from 55 per cent in 2013.

The only good news for the Coalition is that while the index of overall director sentiment - based on responses of over 500 company directors - is down 6.9 points compared to the last survey, it is slightly higher compared to the same period in 2013 when Julia Gillard was still the prime minister.

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John Colvin, chief executive of the AICD said, "The results suggest the honeymoon period for the Coalition has ended."

He added, "Directors have indicated that productivity growth is now their biggest economic challenge, followed by issues such as excessive regulation and a lack of spending on infrastructure."

But for the majority of Australians, the bigger and most disturbing issue is the planned imposition of the deficit tax originally at a rate of 1% for those earning over $80,000 a year, although latest indication is that both the lower limit and the rate would be hiked to 2% of $150,000.

The Coalition is slated to officially announce the rate on Tuesday on disclosure of the budget, and after that, Australian voters would likely determine if the deficit levy is indeed Tony Abbott's Julia Gillard moment and it's time to deal with him as the Liberal Party did with Australia's first female PM and as voters did with Kevin Rudd in September 2013.

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Chinese President Xi Jinping (4th L) attends a meeting with Australian Prime Minister Tony Abbott (4th R) at the Great Hall of the People in Beijing, April 11, 2014. REUTERS/Parker Song/Pool (CHINA - Tags: POLITICS)
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