Rising power prices are affecting economic confidence and a comprehensive domestic gas policy is needed, a key business group says.
The Australian Chamber of Commerce and Industry's December quarter survey of investor confidence released on Monday shows a fall in most indicators of business trading conditions.
One of the key business concerns cited in the survey is non-wage costs, such as power prices.
ACCI chief Kate Carnell said businesses were "pretty depressed" after a poor Christmas period and had low expectations of the first quarter of 2015.
"Wage costs are pretty flat and have moderated quite a lot but non-wage costs for business are escalating ... things like power," Ms Carnell told AAP.
She said state and federal governments needed to act quickly to address the issue of gas prices.
"Lots of businesses use gas and we are predicting quite a significant increase in gas prices over the next couple of years and that is impacting on business confidence," Ms Carnell said.
"What we need to see is some solid domestic policy in place."
A study by the Grattan Institute published late last year found the expansion of gas exports to Asia is driving up domestic gas prices.
Domestic gas prices increase to compete with the higher prices that other countries are prepared to pay for Australian gas.
The study found gas prices for business were likely to go up by 30 per cent or more in 2015/16 and 2016/17, further squeezing profits and potentially sending some large users to the wall.
But there would be a net positive impact to the national economy as the gas industry itself made export income and hired more workers.
In December, federal Industry Minister Ian Macfarlane and state energy ministers announced a plan to work more closely on gas policy.
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