Icon’s search widens
Frustration tempers confidence within the boardrooms
CONFIDENCE levels within the boardrooms of Australia are at six-year highs but company directors remain frustrated at Canberra’s tardiness on tax reform and energy security.
And while decision-makers are feeling particularly chirpy about domestic business conditions, with sentiment towards investment and employment levels at their highest mark since early 2011, an overwhelming majority labelled the quality of public policy debate in Australia as poor.
The Australian Institute of Company Directors’ biannual members poll, released today, jenny.rogers@news.com.au delivered its strongest result since the heady days of the mining boom but overall sentiment remained mildly pessimistic at minus 10.2 points.
The Director Sentiment Index, which takes the corporate pulse of more than 1100 directors, reveals worries over the health of the global economy have eased significantly.
Directors now expect a rise in inflation, wages and even the Reserve Bank’s cash rate – which hasn’t lifted since November 2010 – over the coming 12 months.
AICD chair Elizabeth Proust said the uptick in confidence came as “somewhat of a surprise” given six months earlier the dual prospects of
It has appointed agents to find a new source of finance and is seeking a joint venture partner to invest in ATP855.
“A significant natural gas resource was identified in the Stage 1 exploration program which is currently classified as a contingent gas resource,” Icon said.
“A Stage 2 exploration program will be designed specifically to address outstanding technical questions and determine the commercial viability of the gas resource.”
Icon said exploration in ATP855 now is “a priority focus” for the company.
It said it is confident that future exploration “will potentially lead to commercial gas reserves being proven within the permit, which could support the domestic market in eastern Australia and, ultimately, succeed in satisfying the special conditions required to finalise Icon’s gas contract with China”.
The company has bought back 21,160,565 shares for around $1.22 million as part of a share buyback program.
Icon plans to buy back up to 10 per cent, or 61.9 million shares.
Its shares at 2.8¢. closed unchanged Donald Trump claiming the US presidency and a prolonged Chinese economic slowdown were high among directors’ concerns.
“They’re particularly bullish about investment and hiring people, all of which expresses a confidence about the future,” Ms Proust said.
Some 43 per cent of directors * An ineffective tax system, energy policy and the balance of power in the Senate are the major short-term concerns said they expected to lift investment levels over the coming 12 months, while 40 per cent took the same view on staffing levels.
But a week out from the Federal Budget, the good vibes were tempered by pessimism about a perceived ineffective tax system, now clearly rated by directors as the biggest economic challenge Australian businesses.
Energy policy was their secondary concern after failing to register on the radar six months ago. However, South Australia’s blackout in September and Prime Minister Malcolm Turnbull’s planned $2 billion expansion of the Snowy Hydro scheme announced in March put energy security front of mind.
“The events in South Australia, then the Snowy Hydro announcement and the Government’s concerns about gas supplies have elevated this issue right on to the agenda.
“Depending what type of business you’re in, it is actually the primary issue of concern facing for some,” Ms Proust said.
The housing affordability crisis was best served by tightening controls on foreign buyers ahead of boosting supply, directors said.
In another sign of the times, directors said they were more likely to be “kept awake at night” by the potential theft of corporate data through cybercrime rather than the risk of a terrorism threat.
Separately, the AICD backed Treasurer Scott Morrison’s review into how GST revenue is distributed across the states, adding that using the Productivity Commission to conduct the study would “hopefully take some of the politics out of it”.