Business heavyweight Graham Bradley warns labor leadership stoush is damaging economy

One of Australia's most powerful business leaders has warned that the battle for the Labor leadership is damaging confidence in the Australian economy.

The chairman of HSBC bank and Stockland property group, Graham Bradley, told AM that important policy debate was being sidelined by the showdown between Prime Minister Julia Gillard and Kevin Rudd.

Read the story on ABC News Online here.

"Changes of leadership are destabilising - they affect consumer confidence and they affect business confidence - and the fact that there's going to be a lot of distraction with federal ministers over the coming months can't be helpful," Mr Bradley said.

Mr Bradley said the Government's relationship with the business community had deteriorated in the past year, but he would not be drawn into the debate about who should lead the Labor party.

"We'd welcome any leader, as we welcome Julia Gillard's commitment to better consultation with business around business regulation and a better understanding of the challenges of business," he said.

Mr Bradley also called for the carbon tax to be reviewed.