The IMF says Australia is heading for the biggest rise in unemployment of any developed country, with close to 800,000 people out of work by 2027
Welcome to Talking Business, a podcast produced in Melbourne Australia, built on the traditional lands of the Kulin Nation. The podcast is available on the Acast site, my own website, the Apple podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at https://www.businessacumen.biz/.
I am Leon Gettler. My job is review and monitor the week’s news in business finance and economics. I bring it all to you every week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 37 in our series for 2026 and today’s date is Friday October 16.
First, I’ll be talking to I’ll be talking to Jarrod Adam, Head of Production and Distribution at Unleashed, who can unpack what a dramatic drop in inventory means for Australian manufacturers and why they need the software to get their stock levels exactly right in this climate of geopolitical risks.
And I’ll be talking to Rabobank economist and China expert Teeuwe Mevissen on what the latest summit meeting between Donald Trump and Xi Jinping meant. We’ll examine why it was a stalemate, the dangers of AI being weaponised, the questions around Taiwan and China’s support for Iran and Taiwan.
But first let’s talk to Jarrod Adam.
.So what’s happening in the news?
Let’s kick off with a warning from Anthropic, the company behind Claude. In a research post on Monday, they said rogue “AI worms” could soon start hijacking smart home devices, think ovens, TVs, security cameras, even robot vacuums and lawnmowers. A worm is malicious software that spreads from device to device on its own, and the idea here is that AI agents could do the same thing, possibly within months. Anthropic says we’re already seeing “signs of life,” and they compare the early spread to a slime mold: slow at first, over days, but potentially speeding up as devices and models get more capable. Why smart devices? Many of them are cheaply made, poorly secured, or come from companies that no longer exist. And AI agents are far more willing than human hackers to grind away at thousands of weak targets. The good news is we’re not there yet. Anthropic says there’s no full rogue replicator today, but agents are getting better at each step of the process. Their advice: harden our systems now, and prepare for a world where these things never fully go away.
Now to the economy. The IMF says Australia faces the biggest rise in unemployment in the developed world next year, even though our economy is still one of the fastest-growing and inflation is cooling. Here are the numbers. Unemployment is forecast to climb from 4.4% to 4.7% in 2027, which would mean roughly 150,000 more people out of work. Growth is tipped at 1.9% this year and 1.6% next, and inflation is expected to ease from 3.9% to 3.1%. The jobless rise isn’t entirely accidental. The Reserve Bank has lifted the cash rate to 4.6%, a 15-year high, and its latest minutes suggest it’s now prepared to accept higher unemployment and slower growth to get inflation down faster. Markets put the chance of another hike at the November 2-3 meeting at about 30%. Globally, the IMF’s chief economist warned the world’s resilience is “under strain,” pointing to heavy reliance on the AI boom and rising government debt. Treasurer Jim Chalmers says Australia is better placed than most, while the opposition’s Tim Wilson blames government spending for inflation and rising rates.
A months-long investigation into Hanrine, the Ecuadorian arm of Gina Rinehart’s Hancock Prospecting, has surfaced serious allegations about how the company operates on the ground. Former workers say staff were hidden from labour inspectors, served raw or spoiled food, and made to work while sick. Several villagers who oppose mining claim they were harassed or assaulted by Hanrine staff. Most workers wouldn’t go on the record, fearing retaliation. Hanrine categorically denies any wrongdoing and says it complies with relevant laws. At the centre is Carlos de Miguel, Hanrine’s chief executive and a former US serviceman. One former labourer says de Miguel turned up at a camp armed with an assault-style rifle, flanked by guards and dogs. De Miguel rejects any claim that workers were mistreated. There’s also a messy backstory. In 2020, a former security manager, Ricardo Lopez Tugendhat, publicly held de Miguel responsible if anything happened to him or his family. Police had raided de Miguel’s home the month before, finding firearms and thousands of rounds of ammunition. That weapons case was later dropped because he was renewing expired permits, and de Miguel says allegations like these often arise from employment disputes and were dismissed. The bigger question is accountability: critics argue Australian companies should meet a higher standard overseas, because they’re effectively representing Australia abroad.
So here’s a story that’s got some heavy hitters in Canberra talking. The federal government is fighting a Freedom of Information ruling that would reveal where nuclear waste from the AUKUS submarines might end up being stored. The backstory: the Administrative Review Tribunal decided the information should be released in the public interest. Labor’s now appealing that decision. And here’s where it gets spicy. The Department of Industry is reportedly demanding that the applicant, former South Australian senator Rex Patrick, cover its legal costs if he fights and loses. Add in his own lawyer’s fees, and he could be looking at up to $300,000. Geoffrey Watson, the barrister who led the inquiry into CFMEU corruption, called it a “bully boy” tactic. He says it’s straight out of the corporate law playbook, where big, well-funded firms push smaller litigants into cheap settlements or scare them off entirely. Patrick says it’s a real chilling effect. His words: anyone who wins an FOI case could lose their house just because the government didn’t like the outcome. He also says that in past cases, the government approached him privately and suggested he simply back off. Crossbenchers are fired up too. Senator Jacqui Lambie is tabling reforms this week that would force the government to cover reasonable legal costs if it appeals an FOI decision. She’s accused Albanese of breaking his promise on transparency. The Attorney-General’s office says it’ll consider the bill “through the usual processes.”
If the Reserve Bank lifts rates once more next month, repayments on a median-priced home would eat up about 37.4% of household income. That’s just shy of the record 37.5% set back in December 1989, when rates topped 15%. The cash rate is already at a 15-year high of 4.6%, and markets see a one-in-three chance of another hike at the November meeting. Consumer confidence is at levels not seen since the early-’90s recession. The politics are predictably sharp. Treasurer Jim Chalmers points to house prices rising 540% since 1989, nearly double the pace of incomes. Shadow treasurer Tim Wilson says government spending is forcing the RBA’s hand. HSBC’s Paul Bloxham says fiscal policy should do more of the heavy lifting: the RBA has a sledgehammer, while government has a scalpel. Part of the problem is that inflation drivers like data centre construction and government spending don’t respond much to rate rises, so mortgage holders are copping the brunt.
The Australian Energy Market Commission has given preliminary backing to putting 14,000 chargers on power poles in areas private operators aren’t serving. Networks would recover 70% of costs from household power bills, with the government covering the other 30%. The AEMC says it would add about a dollar a year to a typical bill, and could create a virtuous cycle of more chargers, more EVs, and lower emissions. Tesla, EnergyAustralia and Engie aren’t buying it, calling it an “EV tax on electricity bills.” Context matters here: EV sales have surged since the US-Iran war closed the Strait of Hormuz and sent fuel prices soaring, yet Australia has roughly one charger for every 53 EVs.
An independent report by Principia Advisory has found KPMG systematically mistreated and retaliated against people who raised ethical concerns, backing up the whistleblower’s allegations. It also found intense pressure to win work drove partners to steal sales credits, under-cost proposals, and push staff to under-report hours. The previous leadership was seen as insular and resistant to bad news. Principia made 14 recommendations, including a more independent board and a stronger focus on ethics in performance reviews. KPMG’s current leaders accepted the findings. It’s one of nine external reviews so far, and most of the old executive team has already gone. Principia did note that most KPMG people want to do the right thing, which makes the leadership failures all the more striking.
Let’s look at the biggest tax shake-up in 25 years, and how messy it got behind the scenes. A week before the May budget, senior Treasury official Diane Brown was fielding urgent calls from tech and venture capital investors. They’d just realised the capital gains tax changes wouldn’t only hit housing. The 50% discount was being scrapped across the board. For start-up founders, that effectively doubled their top tax rate to 47% overnight, and Treasury seemed blindsided. They hurriedly added a line to the budget promising to consult on start-ups. That moment sums up the whole process: rushed, secret, and full of unintended consequences. Chalmers had a tight political window, so he kept things quiet. Some ministers apparently didn’t know shares and businesses were included until cabinet signed off. There was also the election promise not to touch negative gearing, which meant Treasury couldn’t formally consult. And the PwC tax leaks scandal had left officials wary of talking to business. The package, worth about $88 billion over a decade, banned negative gearing on existing properties, replaced the CGT discount with inflation indexing plus a 30% minimum tax, and put a 30% minimum on discretionary trusts. A new $250 offset for working Australians sweetened the deal. Then the backlash hit. Memes showed Albanese as a 47% “silent partner” in your local café. The government has since lifted the small business threshold from $2 million to $10 million, exempted testamentary trusts to kill the “death tax” scare, unwound a so-called “widow tax”, and softened the trust changes. There was even an $88,000 error in a Treasury case study. Treasury’s defenders say big reforms are always rolled out in tranches. Critics say it shows a department that lost expertise and hadn’t done major tax reform since the GST. Diane Brown has now stepped down, and her successor inherits the unfinished work on trusts and start-ups.
Next, a bipartisan parliamentary inquiry on AI has done something unusual: written directly to the Prime Minister with early recommendations. The committee wants the government to invest in data centres in the national interest. It also wants independent assessors given high-level access to developers like OpenAI and Anthropic, so they can monitor what the models are doing in real time. It wants more funding for the AI Safety Institute, a permanent parliamentary committee on AI, and monitoring of the risk of AI-built biological weapons. Some of this was prompted by a recent incident in which an OpenAI model in testing breached a government website holding aggregated Medicare data. The contentious part is copyright. The committee has given the government the green light to press ahead with changes that would make it easier to train AI models in Australia, since the big labs say current settings are a barrier. But it also says creators must keep control and get paid. The band Spiderbait were in Parliament lobbying against the changes, and the drummer revealed he’d played tennis with the PM on Sunday. That’s lobbying done well. On investment, witnesses said Australia is being dwarfed. South Korea just announced a US$735 billion AI push, while we’re talking millions.
Now to the float that was meant to be the biggest in three decades but never happened. AI infrastructure company Firmus, which rents Nvidia chips to OpenAI and Meta, was due to list on the ASX. Existing backer Coatue Management was expected to put in up to US$1 billion. Instead, according to sources, it committed less than US$100 million in new shares. That was a key factor in the float collapsing. Investors were nervous about Firmus’s short operating history and the heavy debt it plans to take on to build data centres across Australia, Malaysia and Indonesia. Local demand was also thin, with passive funds, quant funds and super funds all reportedly wary. Firmus now plans to raise money from existing investors and list on the Nasdaq instead, though one analyst warns that won’t work either unless it proves it can actually deliver. There’s collateral damage too. Contractor Maas Group, which does electrical work for Firmus and owns a 3.2% stake, fell 32% one week and another 15% on Monday. Jefferies downgraded it to “hold” and slashed its price target to $4.85 from $7, expecting the data centre rollout to slow. Maas has been paid only $373 million of $1.1 billion in work orders. Meanwhile, Sharon AI, already on the Nasdaq and eyeing an ASX listing, just locked in up to US$356 million in debt.
Finally, a warning from emergency doctors that our hospitals aren’t ready for an ageing population. The Australasian College of Emergency Medicine says the number of ED patients aged 85 and over will jump 411% by 2050. The college’s president called it terrifying, saying we’re only at the start of the curve. Older people made up a quarter of the 9 million ED presentations in 2023-24. More than 53,500 of them waited over 24 hours for a ward bed, up about 250% in five years. That’s a risk to their lives, with doctors describing 97-year-olds sitting in plastic chairs overnight. And the idea that EDs are clogged with people who don’t need to be there? Doctors say that’s a myth. Over half of older patients arrive by ambulance, and nearly seven in ten need urgent care. The report calls for more hospital beds, better patient flow, and more alternatives like hospital-in-the-home and aged and primary care. Part of the problem sits in aged care: we need about 10,600 new beds a year, but only 802 were added in 2024-25. The Health Minister says labour shortages limit how fast he can expand home care packages, while state ministers point to their own investments.
And that’s it for this week.
And next week, I’ll be talking to Rob Cawthorne, CEO of the Carbon Reduction Institute, about whether Australian businesses are ready for a new era of climate reporting
And I’ll be talking to independent economist Saul Eslake about the state of the Australian economy.
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