Ongoing drought and near zero water allocations combined with election uncertainty is driving economic uncertainty in the Murray and Riverina region.
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The NSW Business Chamber has recorded the lowest business confidence figures since June 2010, with the Murray Region recording one of the sharpest drops in confidence.
A survey taken just before the NSW election showed a number of businesses were concerned about the looming federal election.
NSW Business Chamber regional manager for the Murray and Riverina Andrew Cottrill said the brakes had been put on capital investment and business expansion.
He said regional areas affected by drought are feeling the impact of reduced discretionary spending and cash flow challenges.
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"Unfortunately the ongoing drought and near zero water allocations in the Riverina Murray region combined with the uncertainty surrounding the election cycle has created the perfect storm for businesses," he said.
"It's no surprise that the impact of the drought is also a factor in NSW.
"Farm revenue and profits are well down, on average by 80 per cent, so it is not surprising that business confidence, sales and profits are also down across our region.
"What business needs is certainty and fairness on issues such as workplace relations."
Mr Cotrill said major parties seem unwilling to talk about workplace relations but it should be a key election issue and their views should be made clear to provide more certainty for businesses.
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