ASX-listed Seven West Media’s TV network will continue paying the rent of former Liberal staffer and accused rapist Bruce Lehrmann in Sydney until June next year
Welcome to Talking Business, a podcast produced in Melbourne Australia. 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 www.businessacumen.biz or at Banking Day.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com.
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 44 in our series for 2023 and today’s date is Friday December 1.
First, I’ll be talking to Tom Cornell, the Head of Assessments (APAC) at HireVue about how Aussies can prepare for The Great Resignation. Several factors contributed to the Great Resignation, and while the pandemic played a crucial role, other underlying issues are also at play. While the Great Resignation gained attention in 2021, it’s essential to recognize that the labor market is complex, and multiple factors contribute to employment trends. The phenomenon also highlights the changing expectations of workers and the need for employers to adapt to evolving preferences and priorities in the workforce. Tom is a hiring expert with a background in psychometrics and I/O psychology and he will shed light on how the Great Resignation will affect Australian business. And I’ll be talking to RMIT economist Sinclair Davidson about how the infrastructure spending by Federal and state governments are affecting inflation.
But first, let’s talk to Tom Cornell..
So what’s happening in the news?
Inflation has decelerated to 4.9% in the year to October, from 5.6% in the month before, ahead of the Reserve Bank’s last board meeting of the year on Tuesday. The welcome and sharp decline in the annual growth rate of consumer prices comes after surging energy and fuel prices drove annual inflation higher in August and September. The latest figures from the Australian Bureau of Statistics come after the RBA hiked rates to 4.35 per cent on Melbourne Cup Day, citing a growing concern that consumer price growth was proving stickier than hoped. Investors are pricing in a 10% chance of another rate rise next week, and economists believe that any further tightening is more likely to come in February.
Treasurer Jim Chalmers will next week begin the biggest overhaul of the Reserve Bank since its inception, including creating a new board to set official interest rates, increasing the governor’s independence and narrowing the bank’s mandate to controlling inflation and keeping unemployment as low as possible. Chalmers will introduce to parliament a series of changes to the RBA’s 64-year-old governing legislation that will also give the bank new powers to deal with emerging payment systems such as Apple Pay and Google Pay. The Coalition is likely to support much of the legislation as the major parties seek to avoid any minor party tinkering, but there are concerns within the Liberal Party about government appointments to the boards that will oversee both the bank and monetary policy. The review of the Reserve Bank, released in April, recommended sweeping changes to the institution, which, unlike its overseas peers, had not undergone an independent evaluation since the early 1980s. The biggest single change will be the creation of a board that will set official interest rates, while a governance board will oversee the RBA’s day-to-day operations. Half of the Reserve’s 1575 staff are involved in operations, such as the nation’s payment system, rather than economists and analysts. The review argued a separate monetary policy board would bring Australia into line with world’s best practice and enable its members to focus more intently on the state of the economy and interest rate settings. The RBA practice of meeting monthly, which is unlike almost every other major central bank in the world, will be replaced with a move to eight, two-day meetings a year.
Jim Chalmers has appointed Bank of England official Andrew Hauser as the Reserve Bank’s next deputy governor, filling a role that has been empty since governor Michele Bullock was promoted to the top job in mid-September and as the central bank undergoes its biggest overhaul in a generation. Mr Hauser’s appointment was confirmed in a cabinet meeting on Monday morning to take on a role that will grant him a vote on interest rate decisions affecting millions of mortgaged households. The 30-year veteran of the BoE is currently executive director for markets, responsible for managing the BoE’s balance sheet and the United Kingdom’s foreign exchange reserves, and has held a range of senior positions, including representing the United Kingdom as a member of the IMF’s executive board in Washington DC. He will be the first foreigner to hold such a high position within the bank. The Treasurer in a statement said Mr Hauser brought “international expertise” in economics and central bank operations, days ahead of Labor introducing legislation as part of a process to reinvigorate and refresh the RBA.
A court has awarded indemnity costs against war veteran Ben Roberts-Smith for the entirety of his failed defamation case against Nine Entertainment. The civil case was dismissed in the Federal Court in June, when Justice Anthony Besanko found there was substantial truth to allegations of four murders in Afghanistan and the bullying of a Special Air Service Regiment (SAS) colleague. Since then, a complicated battle over who foots the huge legal bill has unfolded. Indemnity costs compensate a successful party to a higher level than what a court would more commonly order after a legal case. Mr Roberts-Smith previously accepted he should pay costs on an indemnity basis only as far back as March 2020 — when the publisher made a second offer to settle. “In my opinion, the applicant should pay the respondents’ costs assessed on an indemnity basis from the commencement of the proceedings,” Justice Besanko said today in a written decision. The case was initiated in August 2018. Journalist Chris Masters, one of the respondents, has previously said it took five years and about $30 million to defend the case.
ASX-listed Seven West Media’s TV network will continue paying the rent of former Liberal staffer and accused rapist Bruce Lehrmann in Sydney until June next year, in return for interviews he gave its flagship Spotlight investigations program. The revelation emerged in cross-examination in a NSW Federal Court on Tuesday afternoon in the defamation case he has brought against Network Ten and its former star journalist Lisa Wilkinson.
Origin Energy will hold talks with foreign suitors Brookfield and EIG about whether the pair can improve their $20bn takeover bid, amid doubts over the value of a “Plan B” deal lobbed last week. The company’s board has already said a revised offer “appears inferior” after a last minute deal was tabled on Wednesday night, which led to a scheme meeting vote on Thursday being delayed. Origin Energy’s board is leaning toward rejecting a Plan B proposal lobbed by its suitors, Canada’s Brookfield and its private equity partner EIG, as a last-ditch attempt to buy the ASX-listed electricity and gas giant. It may now look to test whether an alternative bid could be brought to the table given the complexity and questions over valuations from the current offer, sources told The Australian. The board had yet to settle on a position on Sunday but held reservations over aspects of the reworked offer and may look to hold further talks before reconvening for a final decision. One option may look at whether any middle ground can be found between the investor suitors and AustralianSuper, Origin’s largest shareholder, whose opposition to the original pitch largely sunk the buyout. Brookfield and EIG late on Wednesday submitted a revised offer that will see shareholders offered $9.43 a share. But if that bid is rejected by shareholders, Brookfield and EIG have proposed an alternative structure that sees shareholders offered $9.08 a share.
The millions of Australians and thousands of businesses left without phone and internet service during the crippling Optus outage are being asked to make submissions to a government-led review aimed at better safeguarding the country in case of future incidents. About 10 million people, and 400,000 businesses, were impacted during the November 8 outage. A separate Greens-led senate inquiry earlier this month heard from former chief executive Kelly Bayer-Rosmarin – before she quit – that more than 200 triple-0 calls could not be made while Optus customers were left without service. The review, will report on and make recommendations regarding the functioning of triple-0 during the outage and will look at whether reforms are needed. Communications Minister Michelle Rowland said the review was an opportunity for industry, government and the community to consider what lessons could be learnt from the outage, noting that no network is immune. Optus confirmed “changes to routing information” after a “routine software upgrade” was behind the national outage.
Optus is appealing a court ruling that could lead to the release of a forensic report into last year’s cyberattack, as a Commonwealth review into this month’s phone and internet outage gets under way. Optus is trying to stop class-action law firm Slater & Gordon getting hold of a report that the telecommunications group commissioned from Deloitte into its 2022 cyberattack, which led to the personal information of some 10,200 customers being posted online. Earlier this month, the Federal Court’s Justice Jonathan Beach ruled that Optus could not claim legal professional privileges to keep the full report secret. The court, which said Optus may be able to redact some part of the Deloitte report, ordered the telco group to give the report to Slater & Gordon unless it successfully appealed the judge’s decision. Slater & Gordon wants to use the Deloitte report in a class action case that alleges the telecoms group failed to protect the personal information of its customers. Class actions practice group leader Ben Hardwick said it was disappointing that Optus appeared to be refusing to accept “the umpire’s decision”. “Our clients who were impacted by this data breach just want this case to move forward and Optus is putting up another roadblock to their path to justice,” Mr Hardwick said. Former Optus chief executive Kelly Bayer Rosmarin, who resigned on November 17 told a Senate inquiry that the Deloitte report was “highly sensitive” because it contained a forensic investigation into the company’s cyber defences.
Cost of living pressures are having more impact on domestic tourism than international, as travellers save their money for trips abroad. Tourism Research Australia’s annual five-year forecast, released on Tuesday, says domestic travel has gone backwards in 2023 after a strong rebound in 2022. The number of domestic visitor nights is forecast to fall 4.1% this year compared to last year and still be down 2.6% on 2022 levels by 2027. Increased competition from international outbound travel, and cost of living pressures leading to reduced discretionary spending are considered the main barriers to domestic travel. In contrast, international travel continued to climb with numbers tipped to reach record highs in 2025, when more than 10 million overseas arrivals are expected. To date visitors from Asia have returned the fastest, with arrivals from Vietnam, Thailand, The Philippines and India already exceeding pre-pandemic levels. Other international markets such as New Zealand, China, Japan, Singapore, Canada, the US and Britain are forecast to return to 2019 numbers in 2025, while visitors from Europe are likely to take longer. That is attributed to negative consumer sentiment towards long haul flights in Europe, where concern about carbon emissions and global warming is highest. Australian Travel Industry Association chief executive Dean Long said members were certainly seeing a slowdown in domestic travel, largely as a result of competition from international markets.
Industry superannuation fund UniSuper is facing rising demands from members that it adopt more rigorous and science-based decarbonisation targets. More than 1650 people have signed a petition calling on the fund to strengthen its net-zero emission targets and 370-plus academics have signed an open letter demanding the same, as consumer and regulatory pressure rises on funds to act on their green claims. UniSuper, which has one of the most educated member bases in the industry due to its roots as the default fund for uni staff, has been under pressure from customers over its climate policies for several years. It updated its climate policy after a tense stand-off in 2020. The fund pitches itself as one of the most sustainably focused in the $3.5 trillion retirement savings sector, imposing net-zero targets on its broader portfolio as well as its ESG-specific options. But UniSuper customers who signed the petition and the open letter are demanding the fund adopt short-term, medium-term and net-zero targets in the next 12 months that are based on science-based and Paris Agreement-aligned benchmarks.
The Australian Competition and Consumer Commission is planning a crackdown on consumer contracts for everything from airline tickets to houses, with a former insider tipping “prosecutions before Christmas”. In changes hailed as the biggest shift in consumer law for 20 years, standard-form contracts which include unfair terms can now attract fines of up to $50 million after years of light-touch regulation. Until November 9, courts could only declare terms of a contract unfair and void – a regime which the ACCC said had failed to lead to meaningful change. However, the landmark case against Qantas over cancelled flights has led to a late flurry of changes to standard contracts issued by insurance companies, builders, telcos, airlines, ticket agencies and transport companies. In an indication of the likely areas of concern, matters recently pursued by the regulator include clauses that gave horticulture wholesaler Nutrano absolute discretion to change produce specifications and allowed Grape Co Farms to terminate agreements and withhold part payments. In 2022, Fujifilm had 38 terms in its small business contracts providing for automatic renewal, excessive exit fees and unilateral price increases. “No reliance” clauses, requiring agreement by one party that it has read extraneous documents that excluded liability for other representations, were also found to be unfair. Other clauses commonly seen in construction industry contracts which may be considered unfair are unreasonable time bars and termination for convenience clauses without appropriate compensation. University of NSW Associate Professor Rob Nicholls, a former partner at Gilbert and Tobin who worked alongside current ACCC chair Gina Cass Gottlieb for 12 years after two years at ASIC, said he expected “the first announcement of a prosecution before Christmas”.
Disposable vapes won’t be allowed into Australia from New Year’s Day under the federal government’s bold plans to stop a new generation becoming addicted to nicotine. Australia’s ambition to become the first country to limit vaping to people with a prescription will be rolled out in several phases next year, starting with an import ban on single-use products and an expanded access scheme for medical use from the start of 2024. Health Minister Mark Butler’s crackdown aims to stop a thriving black market that imports millions of flavoured disposable vapes from China and sells them to young Australians on social media or under the counter in convenience stores. Expanded access to vaping prescriptions will be a vital part of the reforms because legal pathways must become easier to stop people seeking out products on the black market. All doctors and nurse practitioners will be able to prescribe vapes from the new year, but the success of the scheme will rely on a shift in approach from medical professionals, who have been largely unwilling to prescribe vapes as a smoking cessation tool. Health and police ministers agreed to the changes at a meeting last week. Further changes that will apply from March include a ban on people importing their own vaping products, and on the import of all non-therapeutic vapes. Vape importers will also have to obtain a permit from the federal government and notify the Therapeutic Goods Administration that their products comply with new standards. The new product standards, to be strengthened in 2024, will limit flavours, reduce maximum nicotine concentration and require pharmaceutical packaging, but businesses will be given a transition period to comply. The government will also introduce legislation next year to prevent the manufacturing, advertisement, supply and commercial possession of non-therapeutic and single-use vapes in Australia. A national vaping working group will oversee the plan, while $25 million will go to the Australian Border Force and $56.9 million to the Therapeutic Goods Administration over two years to enforce the crackdown. Butler’s decision to pursue an all-out ban was opposed by industry groups who called on the government to reap tax revenue from commercial vape sales instead, and by harm-reducing experts who warned prohibition rarely works. Enforcement experts have also warned the ban will be difficult to police given the scale of the black market and the fact that vapes, alongside illicit tobacco, have become a lucrative market for organised crime groups because they offer high profit margins with smaller penalties than narcotics.
Less than one third of top Australian companies have adopted science-based climate targets, with a major green body warning companies face a crackdown with tougher disclosure rules set to start in July 2024. Ahead of the COP28 climate summit starting in Dubai on November 30, the Climate Leaders Coalition said only 29% of some of Australia’s biggest companies had taken up Scope 3 emissions targets, which are those produced outside a company’s direct industrial processes. The CLC has instructed member companies to accelerate cuts to Scope 3 emissions or face significant commercial consequences, with strict new reporting standards mandating Scope 3 commitments and reporting from July 2024.
Progress in elevating women into Australia’s top corporate roles has stalled despite the country’s gender pay gap narrowing to the lowest in more than a decade. The average annual pay difference between men and women narrowed by A$1,322 ($867.83) to A$26,393, a drop of 1.1 percentage points since last year. It’s the second-largest annual decrease since the Workplace Gender Equality Agency began surveying employers in 2014 for its Employer Census, which this year covered 4.8 million workers. While the proportion of women in management has been increasing at every level, that doesn’t include chief executive officer, the WGEA report showed. Across the workforce, the proportion of female board members remained the same as 2022 — at just 34% — while 22% of CEOs were women. The agency’s report comes as Australia takes steps to confront its wage disparity, which is slightly below the OECD average. The nation ranks 26th on the 2023 Global Gender Gap Index, which is topped by Iceland, Finland, Norway and New Zealand.. Starting next year, individual companies with 100 workers or more will be required to report their gender pay gap data on a yearly basis as part of new income equality legislation. Currently, results are only disclosed by industry rather than by company.
And that’s it for this week. And next week, I’ll be talking to Ben Pfisterer, the CEO of business payment service Zeller. And I’ll be talking to financial analyst Tim Buckley, the director of Climate Energy Finance, about the Brookfield-EIG battle to take over Origin.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com.
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Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week
