Financial executives who manage corporate treasuries are becoming increasingly concerned about the so-called “fiscal cliff,” the combination of tax increases and steep spending cuts that are due to occur at the end of the year unless Congress and the administration act to prevent them.
Three-quarters of the 6,000 corporate treasury executives and financial executives surveyed by the Association for Financial Professionals at its recent annual conference in Miami said they believe the economy will worsen without action to address the automatic tax increases and spending cuts.
Responding to an on-site survey at the 2012 AFP Annual Conference, 39 percent of the finance executives polled said that sluggish economic conditions and weak demand are further uncertainties discouraging their companies from making strategic investments in expansion and hiring.
No matter which candidate wins the presidential election in November, 63 percent of survey respondents expect the election to have no significant impact on business conditions and 71 percent anticipate no significant change in their investment spending after the elections.
"Companies are looking beyond the elections," said AFP president and CEO Jim Kaitz in a statement. "The most important issue is resolving long-term fiscal and deficit issues." Negotiating the fiscal cliff and putting America's finances on a sound footing are the key aims of corporate treasurers.
Asked what they saw as the most important areas for Washington, D.C., to focus on after the election in order to support business activity and economic growth, the finance and treasury professionals surveyed focused on resolving long-term fiscal/deficit issues (63 percent), implementing changes to avoid the fiscal cliff (49 percent), reducing regulatory complexity and uncertainty (42 percent), resolving political gridlock and improving the tone of political debate (37 percent, corporate tax reform (33 percent), policies aimed toward the safety and soundness of the banking system (20 percent), and addressing unfair and anti-competitive practices of foreign companies (10 percent).
Asked if they expected lower corporate bank balances when the unlimited FDIC insurance on non-interest bearing transaction accounts expires at the end of the year, 48 percent said they saw no significant change while 49 percent expected to lower their balances.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access