(Image: Mitchell Squire/Private Media)

In the space of a month, Judo Bank CEO Joseph Healy went from “never seen it so good” to “concerned at the outlook”. The latter is now the prevailing wisdom on the economy for business.

The commentary was in headlines attached to interviews in December and then January, but away from the news pages the reality is that business is struggling. And it’s a lot more than just Omicron, Healy says. It’s labour shortages and rising costs.

That sentiment has changed is reflected in the recent NAB monthly business survey which said confidence has slumped and conditions are worse. This is not the message Prime Minister Scott Morrison wants broadcast, but the Reserve Bank of Australia meeting tomorrow is widely tipped to be taking the first step to raising rates by winding back quantitative easing measures.

Recent inflation and other numbers are widely expected to result in some extensive upgrades in the RBA’s projections. The facts have changed.

The RBA has been buying back bonds as part of official measures to boost the economy, and this might stop.

The US Federal Reserve has said it will raise short-term rates in mid-March, and although the RBA was meant to sit on its hands this year the recent inflation figures and international rate moves will force its hand.

NAB chief economist Alan Oster said on Friday: “We now see the first RBA rate hike occurring in November, with follow-up hikes in December 2022 and February 2023.” He expects a 15 basis point move in November and then 25 basis points a month for the next few months.

An end to easy money is not unexpected. The Fed has long made clear it was taking away the stimulus.

Healy says it’s time for the federal government to actually do something to help business: fast-forward administration of the temporary skilled worker visas.

There is a chronic shortage of skilled labour compounding the known supply chain issues which means basic building materials like steel and timber, are in short supply.

The Immigration Department says it processes 50% of skilled workers’ visas in four months, but administration of the test takes 11 months. Healy (and others) argue this is simply not good enough: better administration shouldn’t cost  anything. It is just basic good governance.

But this is not always the Morrison government’s strong point. He is far better at the marketing, throwing a few dollars here and there as he does the rounds. While that goes on, business is grinding to a halt. The current stage of the pandemic has caused a shadow lockdown.

Talk of a fast recovery is, in essence, a better presentation of the numbers, comparing 2021 with 2020 when the country was shut down at the onset of COVID-19. If you take the comparisons back to 2019 levels, the numbers don’t look so good — and back then the economy was perceived to be crawling.

Oster has said: “The Omicron outbreak had a significant impact on leading indicators … While the economy was still going OK in December, it was clearly slowing and the warning lights were coming on.

“Purchase costs have lifted to near-record highs, and that pressure is flowing through to strength in output prices.

“With significant disruption to supply chains and labour markets, price pressures are to be expected, and the key question will be how quickly (if at all) these pressures abate over coming months.”

Business is looking not for handouts but basic good government. In an election year that might be too much to hope for.

Is your business feeling the pinch? Do you blame Scott Morrison? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name if you would like to be considered for publication in Crikey’s Your Say column. We reserve the right to edit for length and clarity.