Tension high as red tape tangles

Company directors have become increasingly distrustful of the federal government, and are being “worn down” by increasing waves of regulation, according to a new survey by the Australian Institute of Company Directors.

The latest Director Sentiment Index by AICD confirms reports of deteriorating ties between business and the Albanese government with Business Council of Australia chief executive Bran Black warning this week that corporate Australia “has become the punching bag” for government.

The Director Sentiment Index shows a sharp increase in distrust of the federal government and a rise in concern by directors about how it regards business over the past 18 months.

“Directors at the front line are just feeling wave after wave of this regulatory tsunami,” AICD chief executive, Mark Rigotti, told The Australian in an interview on the survey.

“They are being worn down by the accumulation effect of this new regulation. Rather than it just being an irritation, it is a major concern … 57 per cent of them say it is affecting their risk appetite and changing behaviours.”

The survey shows that director sentiment continues to be negative for the fourth survey in a row, with boards concerned about macro economic policy conditions and the prospect of higher interest rates as well as coping with an increasing regulatory burden.

It comes amid news the Westpac Melbourne Institute Consumer Sentiment Index fell by 2.4 per cent to 82.4 in April. “The pessimism that has dominated the consumer mood for nearly two years now is still showing few signs of lifting,” Westpac senior economist Matthew Hassan said.

In an opinion piece this week, Mr Black warned that jobs could be at risk if businesses were put under pressure.

The AICD survey of company directors confirmed an increasing number of those in the country’s top boardrooms were holding off making decisions on new investments amid concern about having to cope with waves of new regulations.