The federal government's failure to sell its first budget is weighing on business confidence and hiring intentions.
New figures show business expectations weakened following the release of the May budget after touching the highest level in four years earlier in the year.
The Australian Chamber of Commerce and Industry business expectations survey for the June quarter shows its expectations index sinking towards the key 50-point mark, suggesting optimists and pessimists are evenly balanced.
The chamber's chief executive office Kate Carnell says there's no doubt that confidence has been tracking down since the budget.
"It shows that businesses aren't planning to employ in the current circumstances," she told reporters in Canberra on Monday.
Actual business conditions recorded an index of 46.9 points, weighed down by weak profits and selling prices.
The employment index eased to 45.4 points in the June quarter from 46 previously, and is expected to fall short of the 50 mark in the September quarter.
"If employment figures are as these expectations show then the government won't meet their employment projections for the budget," Ms Carnell said.
Official labour force figures for July will be released on Thursday.
Ms Carnell says business wants the government to bring the budget back into balance to lift confidence but is worried the proposed measures won't get through the Senate.
However, she hopes last month's scrapping of the carbon tax will lift sentiment in the September quarter.
She also expects businesses will respond positively if the government shelves its paid parental leave scheme until the budget is back in surplus and the country can afford it.
Share
