Facebook loses another case. This time against the Australian Information Commissioner over Cambridge Analytica in the full Federal Court
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast app, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at www.businessacumen.biz.
I am Leon Gettler. My job is to review and monitor the week’s news in business, finance and economics. I bring it all to you, every week.
This is episode number 2 in our series for 2022 and today’s date is Friday February 11.
First, I’ll be talking to Pete Ceglinski, the Co-Founder and CEO of the Seabin Project which makes light work of some of the thousands of pieces of floating debris and plastics that enter Sydney’s waterways. And I’ll be talking to KPMG senior economist and partner Sarah Hunter analysing the RBA’s latest moves to keep interest rates on hold.
But now, let’s hear from Pete Ceglinski
The historic collapse in Meta’s shares this week has wiped $31 billion off Mark Zuckerberg’s personal wealth, taking him down three places on Bloomberg’s list of the world’s richest people. He now stands in 10th place on the Bloomberg Billionaire’s Index, behind Oracle co-founder Larry Ellison and just a few hundred million dollars above India’s energy-to-tech entrepren eur, Mukesh Ambani. Tesla CEO Elon Musk tops the list by a wide margin. Meta Platforms, the company formerly known as Facebook had its worst day ever on the stock market Thursday, after reporting a rare profit decline and stagnant user numbers, and delivering a vague assessment of the company’s prospects as it invests heavily in augmented and virtual reality.
The Full Federal Court has dismissed Facebook’s claim that it neither conducts business nor collects personal information in Australia as “divorced from reality” in a withering judgment that approved a lawsuit over the Cambridge Analytica scandal. Facebook, now known as Meta, was trying to block a lawsuit by the Australian Information Commissioner claiming it breached the privacy of more than 300,000 Australian users via a personality test app called This is Your Digital Life. Facebook argued it could not be sued under Australia’s privacy laws because it did not carry out business or collect or hold personal information in Australia – a proposition that was firmly rejected on Monday in a 3-0 decision. Justice Nye Perram found the installation, operation and removal of cookies – text files used to identify computer users – on the devices of Australian users and the way people were logged in showed Facebook was carrying out business in Australia.
One of Australia’s biggest banks predicts property prices will fall around 10% in 2023 as looming interest rate hikes threaten to take the steam out of the market. Updating its forecast in a Quarterly Property Survey, the National Australian Bank (NAB) said it now expects the housing market to turn a corner soon after rates are hiked by the Reserve Bank. “With our view on rate hikes coming forward, we now expect the turning point in property prices to occur in the second half of 2022,” writes NAB economists. “That sees a flatter outcome in 2022 and a slightly larger fall in 2023. Overall, we see dwelling prices rising around 3% in 2022 before a decline of around 10% in 2023.” While it may sound like property bargains on the horizon, NAB economists were careful to point out that any decline comes after what has been the most rapid increase in prices since the 1980s.
Taxpayers have been paying more than $10,000 a month for George Christensen’s “e-material” in the same period that he racked up an $85,000 Facebook advertising bill for issues including vaccine discrimination, and a conspiracy theory about the “unelected global elite”. According to reports from the independent parliamentary expenses authority, Christensen claimed more than $50,000 for “e-material” over nine months in 2021, with the spend ramping up to an average of $11,000 a month from the middle of the year. Over the past 18 months, Christensen has spent $85,000 on Facebook ads. Government records show Christensen claimed $12,641 for e-material in the second quarter of last year, jumping to $33,500 in the third quarter as the controversial Queensland MP began ramping up his campaign against vaccine mandates. While the records do not indicate exactly how the money was spent, Facebook’s records show Christensen spending significant sums on advertising on the platform in the same period. The expense reports are not yet available for the October to December period, but Facebook’s ad library shows Christensen spent a similar amount for the last quarter of the year, including an estimated $25,000 on a single ad that calls to “end the vaccine discrimination”. The ad is a “demand [for] an end to all coercive measures by government and private corporations that force people to take a COVID-19 vaccine or else be denied services, rights or employment”. According to Facebook, the ad ran from November to January and had an audience reach of more than 1 million people. He has also spent more than $10,000 on other anti-vaccine mandate advertisements, calling for an end to vaccine passes and passports, which he describes as “medical apartheid” and a “path to tyranny”. Two separate ad campaigns costing up to $7,500 that ran from August through to December campaigned on the issue of “globalist elites”, who Christensen claims are using the pandemic “as an opportunity to fuse socialism and corporatism and embed it permanently into our economy and society”.
The federal government is set to make COVID-19 tests tax-deductible for Australian individuals and exempt from fringe benefit tax (FBT) for businesses when they are purchased for work-related purposes. Initially, the change will see PCR and rapid antigen tests (RATs) become tax deductible, but the government will include future medically approved tests in the scheme. The legislation will be in effect from the 2021-22 FBT and income years and will be backdated to July 1, 2021. Australians earning an income taxed at 32.5% will receive a tax refund of about $6.50 for every pack of two RATs purchased for $20. Small businesses will reduce their FBT liability by about $20 for every dual pack of RATs purchased for $20 and provided to employees.
Figures from the Clean Energy Regulator (CER) show more than 3,000MW of small-scale solar capacity was added to grids around the country in the 12 months to December 31, pipping the previous high of 2,964MW in 2020. Combined, the capacity of the newly installed solar eclipsed the size of Australia’s biggest power station, the 2,880MW Eraring coal-fired plant operated by Origin Energy in New South Wales. Also, the CER said there was typically a lag of up to 12 months in the reporting of new units, meaning the figure was likely to be even higher. Across Australia, more than 360,000 customers had solar panels installed on their roofs last year, in line with 2020 and more than double the number that went up in 2015.
A measure of Australian business conditions took a turn for the worse in January as a surge in coronavirus cases hit consumer spending, though firms were optimistic the hit would be short-lived. The National Australia Bank business survey showed its index of business conditions dropped 5 points to +3 in January, as sales halved to +7 and profitability slid 8 points to +2. Its measure of employment dipped 3 points to -1. The index of confidence bounced to +3, having dived 24 points in December to -12.
The Morrison government has reversed a decision to freeze tens of millions of dollars in funding for the ABC ahead of the upcoming federal election. The move overhauls a contentious decision to impose an indexation freeze on ABC’s annual funding in 2018 – believed to be worth $84 million – made by former prime minister Malcolm Turnbull. It will now deliver the public broadcaster $3.3 billion in funding over the next three years. Nonetheless, there have been $526m in cuts to the ABC budget since 2014, with an ongoing reduction to base funding of $106m per year by 2021-22, the ABC has told Senate estimates in reply to questions on notice Communications Minister Paul Fletcher has also announced SBS will receive $953.7 million over three years – including an additional $37.5 million – which will support “long-term sustainability”.
The re-opening of Australia’s borders on February 21 will not result in a flood of international tourists, but will be a slow rebuild that will take years, according to the industry. After growing speculation in recent days about a decision on the international border, tourism operators were rewarded on Monday when Prime Minister Scott Morrison announced that fully vaccinated travellers would be able to enter the country within two weeks. But Tourism and Transport Forum chief executive Margy Osmond warned it could take years, if ever, for Australia to return to pre-pandemic levels of visitors and expenditure. Ms Osmond said it would also take time to build up aviation capacity, recommence marketing in key markets and build up staffing numbers in the sector, which has been decimated since the start of the pandemic. It would not be easy trying to win back foreign tourists, she said. When the borders open on February 21, Australia’s two largest markets before COVID-19, China and New Zealand, will be missing, as both are closed to the rest of the world. Australian Federation of Travel Agents chief executive Dean Long said it would take two to three months to build up a decent market.
Regional Express Airlines’ 18-year monopoly on flights to and from Broken Hill is over, with QantasLink emerging as competition for the carrier. According to the Qantas website, the second airline will be flying in and out of the Silver City starting in early April. Rex has been the only carrier operating in the region since 2004, with Horizon the last competitor. From April 8, the airline will operate two weekly return flights between Sydney and Broken Hill with its 50-seat Q300 aircraft. According to QantasLink CEO John Gissing the new plans will not only benefit locals but bring tourists to far western New South Wales.
Victoria has been ranked as the highest-taxing state with the largest public sector and most red tape, making it one of the hardest places in the country to do business, a damning new report finds.More than half the national businesses polled said Victoria was the hardest state to do business in. Four out of five said they had difficulty accessing the labour and skills they needed and only 7% said the Andrews government was doing a good job of reducing the cost of doing business.Victoria ranked well in some areas such as infrastructure (the government released a Deloitte report that put the value of major projects at $174.4 billion) as well as utilities, research and development, and higher education. But the state’s productivity levels have fallen badly over the past decade, and the time and cost of setting up a business has risen to the highest of all the states. The Victorian Chamber of Commerce and Industry commissioned Nous Group to conduct the latest research. The chamber proposes an eight-step action plan to help Victoria recover its status as an economic powerhouse after being smashed by more than 260 days of stay-at-home restrictions over six pandemic lockdowns. Its recommendations include a business concierge to streamline interaction with the government, a “root and branch” review of the tax system, fast-tracking government approvals, injecting industry hires into the public service to overhaul the culture, a budget boost for Invest Victoria and Global Victoria amid falling exports and creating a business advisory group
Costs in home building will rise this year at above-average rates as timber and metal prices keep increasing, posing the risk of delays to projects and adding to inflationary pressures in the wider economy, CoreLogic says. The report measures change in construction costs within the residential market. It covers freestanding and semi-detached single and two-storey homes. For the year to December, the building cost index rose 7.3%, its highest 12-monthly rate since March 2005, mainly due to the rising cost of structural timber.
And it’s the profit reporting season. Commonwealth Bank reported interim cash profit of $4.7 billion, up 23% on the previous first half, Mineral Resources’ reported EBITDA of $156 million for the period, down 80% on the prior corresponding period (pcp). Bapcor’s company’s revenue rose 1.9% to $900.1 million while net profit slid 14.7% to $57.7 million. EBITDA dropped 8.5% to $133 million. Temple & Webster delivered record revenue of $235.4 million for the half year ending December 31, up 46% on the year before. IDP Education posted total revenue of $397 million for the half, an increase of 47% compared with the same period in FY21. Earnings before interest and tax (EBIT) was $77.9 million, an increase of 61% compared with the same period last year. BWP Trust’s revenue was largely flat on last year at $75.9 million in the first six months of the year, while net profit climbed 142% to $348.3 million, driven by a 235% increase in fair value of investment properties. Star Entertainment Group said it will post a net loss of up to $75 million due to lockdowns and the rapid spread of the omicron variant in the first half of the financial year, dragging the casino giant into the red as it vows to repay $13 million for underpaying up to 2200 workers. Mining technology company Imdex reported record half-year revenue of $167.8 million in the first half of the 2022 financial year, up 34.9% on the prior year. It also delivered record EBITDA of $51.5 million, up 55.1%, and record net profit after tax of $24.4 million, 80.8% higher than the previous year. GrainCorp’s average core net cash is forecast at $313 million in FY23. Argo Investments posted a near 92% surge in profit to $129m for the six months to the end of December. Suncorp Group’s revenue slid 1.5% to $7.23 billion, profit took a bigger hit, falling 20.8% to $388 million. Shopping Centres Australasia Property Group’s revenue climbed 25.2% to $172.8 million while net profit firmed 320.2% to $432.4 million, supported by a $349.4 million increase in the like-for-like fair value of investment properties. Funds from operations rose 30% to $94.3 million. Macquarie Group reported a group capital surplus of $11.5 billion while the bank’s CET1 ratio was 12.2% in the in the three months ended December 31 . Megaport generated a profit after direct costs of $30.9 million, an increase of 69%. Centuria Capital Group’s operating profit after tax rose 73% to $58.7 million.
And that’s it for this week. And next week, I’ll be talking to Brisbane-based prestige property buyer’s agent, Lauren Moore. Lauren is an advocate for buyers who she felt were underrepresented in Brisbane. And despite “buyer’s agents” being quite a new service in Queensland, she saw a gap in the market and decided to go for it. And I’ll be talking to CommSec chief economist Craig James about what’s ahead in the market for the week.
In the meantime you can catch me on Facebook, Twitter Instagram and LinkedIn. And if you want leave a comment.
Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week.
