Business activity will remain cautious in the short-term while Tony Abbott and his cabinet settle in, according to global broker Aon.
The Coalition Government plans to scrap the Carbon Trading Scheme and while major players are supportive of this, Aon Risk Solutions MD (global) Jason Disborough said businesses will be wary of making major business decisions so soon after the election.
He said: “The uncertainty surrounding this and other legislative upheaval will most likely result in more cautious business activity in the short-term whilst the new government settles in.”
Regulatory and legislative change is one of the top five concerns, according to Aon’s 2012/13 Australasian Risk Survey, and political risk/uncertainties and regulatory/legislative changes were an equal second for those companies with revenue greater than $1bn.
“It’s evident that political uncertainties and the legislative/regulatory changes usually associated with a change in Government are top of mind for organisation of all sizes,” Disborough said. “The concerns expressed by those surveyed have certainly been justified by the change in Government.”
It remains to be seen what impact the new Government will have on business, he continued, as the Coalition have only recently announced the Cabinet but it will be more evident in Aon’s 2013/14 survey when “the dust settles from the election”.
Other risk concerns highlighted in the 2012/13 survey include business interruption for companies with less than $100m and $100m - $1bn in revenue, however this is not a concern for larger companies.
“This suggests that larger organisations have the resources and resilience to better cope with catastrophe events, such as natural disasters, as opposed to their smaller counterparts,” said Disborough.
Brand and image features in the top five concerns for businesses of all sizes, Aon found. It is a heightened concern for those with revenue of more than $1bn. Around 56% of Aon’s respondents noted that damage to brand had resulted in a loss of income over the past 12 months.
Smart phone/tablet technology and social media have “intensified this risk over the past 10 years” he added.