South Australian firms have been in the grip of a ‘subdued’ mood for 18 months, but managing partners in Adelaide are hopeful the state election on 15 March will bring a turnaround in fortunes
Piper Alderman partner Tony Britten-Jones says that, prior to the election, businesses and law firms were all paying strong attention to what each side of politics was advocating.
This is primarily because the election follows 18 months of negative sentiment in the state, following BHP’s Olympic Dam expansion cancellation and the closure of car maker Holden in Australia.
Ahead of the election, incumbent state Labor leader Jay Weatherill was promising to maintain state government stimulus and spending, to prop up jobs and growth.
However, Liberal leader Steve Marshall is running on a platform that includes focusing on getting the budget back into the black by reducing spending.
“I’m a bit of a cynic in that I don’t think that the results of elections have a direct impact on demand for legal services,” Britten-Jones told Australasian Lawyer.
“But I do recognise that business confidence is important to us, and most people in the business sector would say they think confidence will pick up if Marshall wins.
“If business confidence picks up it will lead to a less cautious investment approach than what we have experienced in the last 12 to 18 months,” he said.
Finlaysons managing partner David Martin thinks that 'certainty' is what the state needs.
"There has been a lack of confidence in the business sector for some time now, and the uncertainty of a long Federal election last year followed almost immediately by a State election this year has not helped business confidence," he said.
"I don’t believe that the state election will of itself directly give rise to an increased demand for legal services, however provided that the election produces a clear majority for one or the other of the major parties, the ensuing certainty is likely to result in at least some level of increased business confidence, and that should lead to improved demand for legal services later in 2014."
With indications of a tight election being decided by a handful of marginal seats, Martin said a hung Parliament or minority government would not be ideal for business confidence.
South Australia's unemployment rate was at 6.7% in January, well above its December 2008 level of 5.3%. This means 15,400 South Australians have joined the unemployment queue since 2008, and the state now has 58,100 jobseekers in total.
Britten-Jones argues the recent economic lull has been different than previous downturns, in that businesses are still willing to pursue new plans and projects, albeit very cautiously.
He expects that should business confidence improve if there is a change in government in March, this is likely to result in increased commercial activity in the state.
Britten-Jones said it was not all bad for the local economy. He singles out increased tourism, a booming cultural activities sector in Adelaide, and continuing positive development in the agribusiness sector.