State sets new record for all the wrong reasons

QUEENSLAND business conditions are the worst on record, while confidence has plunged to its lowest level since the global financial crisis, a sobering business survey has found less than a year before the next state election.

The Courier-Mail can reveal the latest Suncorp/Chamber of Commerce and Industry Queensland quarterly "pulse" survey has presented some shocking results as small and medium businesses across the state vent their frustration.

The September-quarter survey found local economic conditions for small and medium enterprises are the worst on record with the confidence index falling to 36.4 points, well below the indication of optimism of 50 points. 

Regional Queensland businesses were the least confident about the year ahead with 59 per cent expecting conditions to be weaker still thanks to the ongoing drought and lower levels of economic activity.

Trenna Reid of Red Mop at home in Stafford Heights. Picture: John Gass/AAP
Trenna Reid of Red Mop at home in Stafford Heights. Picture: John Gass/AAP

Just 20 per cent of the almost 400 businesses surveyed reported an improvement in business conditions over the quarter while about half said their profits had decreased.

Respondents also lashed the State's public service bonus payment and the Commonwealth's tax cuts.

"The previously positive read on sentiment following from the May federal election has deteriorated as the outlook for the national economy fell sharply to levels last observed during the global financial crisis in March 2009," the survey found.

"The announcement over the September quarter of $250 million in bonuses for the State's public servants was widely condemned by the business community as 'morally wrong' and driven by 'self-interest' at a time where drought affected regions in the South West and Outback Queensland are facing financial ruin.

"Responses from business noted that the expected boost to consumption from cuts to income tax and interest rates have not materialised into tangible gains for Queensland shopkeepers."

CCIQ chief economist Marcus Smith called on the State Government to provide immediate relief through "targeted spending that supports demand in the near term".

He also urged the state to work with the Commonwealth to turn things around.

"The solutions to improving sentiment involve clearly articulated policy initiatives, greater governmental co-ordination at all levels and encouragement of private sector projects," Dr Smith said.

Suncorp head of business customers John Debenham said there was a silver lining to the current conditions with small business owners making the most of low interest rates by paying down debt and de-leveraging their assets.

Trenna Reid, who owns Brisbane company Red Mop Cleaning Services, said the Government could help improve condition by cutting red tape like overhauling WorkCover and reducing the cost of products and public liability insurance.

Ms Reid said other incentives, like software rebates, would also help.