Frustrated CEOs could be bad news for Kevin Rudd: Gottleibsen

Our first chief executive poll of 2010 – which launches the Business Spectator/Accenture CEO Pulse survey – was conducted against the background of rising share prices and is an encouraging one for the government. Australian companies are looking for guidance from Canberra on carbon.

They know that the first attempt at an emissions trading scheme was a disaster. Increasingly in Canberra, the more intelligent ministers understand that emissions trading as set out in the legislation is not far below insulation in the list of government disasters. The government was lucky that Tony Abbott rejected it and there are signs the government is backing off.

But Tony Abbott hasn’t sold CEOs on his policy. So, in the view of Australian chief executives, there is a carbon policy vacuum in Canberra just waiting for one of the parties to fill.

Australian companies are more optimistic about the next 12 months than their counterparts in almost every other developed country particularly in the US and Europe. The only way that optimism can be converted into the reality of higher profits is if China keeps generating income growth for us. Most business people take continued China prosperity as a simple given, even though there may be a small set back as a result of the current Chinese banking curbs. Australian business may well be right, but they should be aware that groups like Pivot Capital and others are sounding a China danger alert.

It is important for all businesses to understand that China’s continued prosperity is the assumption behind our optimism and it is an assumption over which Australians have no control. As these polls proceed I think we are going to find that the underlining unhappiness with the way Rudd presents himself will be transformed into a unhappiness with industrial relations and the three pronged attack on the mining industry – industrial relations, emissions trading and possibly a resources tax.

Woodside CEO Don Voelte has been one of the few chief executives to attack the government publicly on industrial relations. At this stage, these issues have yet to affect corporate profits. But as we approach the election, the combination of carbon, industrial relations and a resource tax will focus the minds of a great many business people.

The good news for Australian business is that whereas three months ago a Rudd election was a shoe in, we are now looking at a much closer encounter which will concentrate the mind of the government on issues that attack business and the pockets of Australians.

This article first appeared on Business Spectator.