Australia’s inflation comes in higher than expected at 3.6%. Service inflation is the main culprit holding back progress. Insurance premiums jumped by their most in 23 years, rents grew at their fastest annual pace face in 15 years, and education fees saw their largest quarterly rise in 12 years. You can forget about a rate cut this 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 13 in our series for 2024 and today’s date is Friday April 26.
First, I’ll be talking to I’ll be talking to Tim Gaspar, Director at Hatch Financial Services. Tim has worked for 15 years as a mortgage broker and he knows exactly what’s going on in the market.
And I will talk to Indeed economist Callam Pickering about Australia’s latest unemployment figures.
But first, let’s talk to Tim Gaspar.
So what’s happening in the news?
Inflation in Australia has come in higher than expected during the March quarter, dampening expectations of interest rate cuts later in the year. The March quarterly Consumer Price Index data from the Australian Bureau of Statistics showed prices increased by 1% during the March quarter, leaving the annual inflation rate at 3.6%. Economists had expected inflation to increase by 0.8% in the March quarter, and by 3.5% annually. Service inflation is the main culprit holding back progress. Insurance premiums jumped by their most in 23 years, rents grew at their fastest annual pace face since 2009, and education fees saw their largest quarterly rise in 12 years. All in all, it was a record-breaking quarter—for all the wrong reasons. There are other risks. Looming stage-three tax cuts due to start in July will keep the RBA on its toes; those tax cuts will add money to the economy at the same time the RBA is trying to take it out. What’s more, a chunk of progress on inflation has come from temporary government rebates that will eventually unwind. There are ongoing threats to further, sufficient declines in inflation. New supply chain risks and rising oil prices from escalating tensions in the Middle East; ongoing strong demand for housing; and a tight labour market will continue to concern a Reserve Bank determined to get CPI back into the target band from mid-2025. Those aren’t dealbreakers for the RBA, but they will delay rate cuts. The data has reduced the likelihood of the Reserve Bank of Australia cutting interest rates later this year.
Australia will cut the growth outlook for most major economies, including key trading partner China, when it releases its budget next month. Treasurer Jim Chalmers warned of a “fraught and fragile global outlook, citing slower growth forecasts for China, the United Kingdom and Japan in the May Budget. He said. “Events in the Middle East are casting a shadow over the global economy, compounding the concerns about lingering inflation and weaker growth,” Chalmers said in a statement Sunday. Uncertainty about the global outlook were “central” to talks the treasurer held with international counterparts and central bank chiefs in Washington in recent days, where he attended meetings of the G20 finance ministers, the IMF and World Bank, he said. Australia’s treasury department forecasts GDP for China, India, Japan, the UK and the US in their budget updates. China’s economic expansion is likely to be around 4% this year, and in 2025 and 2026 — the weakest period of growth since the nation started to open its economy in the late 1970s, Chalmers said. Japan’s forecast 2024 growth was lowered by a quarter of a percentage point to 0.75% following weaker-than-expected consumption figures, the statement said. Japanese household spending fell 0.5% in February, sliding for a 12th consecutive month, recent data showed. Chalmers last week said Australia is on track for a second consecutive surplus when he hands down the budget in just less than four weeks’ time. Barrenjoey chief economist Jo Masters said from a budget perspective, there would be a continuation of last year’s mantra of targeted and temporary support to low-income households that will spend on essentials and not discretionary items. Barrenjoey is tipping the Australian economy was now at its weakest point and would remain subdued for the next four to five months before the July tax cuts kick in to stave off a really sharp slowdown later this year.
Free-to-air broadcasters are preparing for a furious lobbying effort to change proposed laws that put at risk one of their crucial sources of revenue, live sport, as new figures show young viewers have all but switched off their networks. In 2011, teenagers spent on average 75 minutes every day watching commercial television. Nowadays, broadcasters say, that figure is 13 minutes – an 83% decline. For children between 5 and 12, viewership has fallen to 15 minutes, from 59 minutes. The figures are included in a submission from Free TV to the government as part of its argument against restricting junk food advertising as the networks also face the prospect of losing their dominance over the nation’s major sporting events. It has been a tough year for broadcasters, and media companies more broadly. New data shows the amount of advertising spent with metropolitan television stations fell 17.1% in March compared to the year before. The ad market is down 13.6% in the first nine months of this financial year, Guideline SMI reported. Guideline SMI measures how and where the big advertising agencies spend. A 13% drop would equate to a loss of about $230 million from the market. Networks also face a limit on gambling advertising. The government wants to restrict online gambling ads, which are worth $300 million a year. They will also lose millions when deals struck with Meta under the News Media Bargaining Code end this year. All these regulatory hurdles come as broadcasters lose viewers to the likes of YouTube, Netflix and Prime Video. Independent research from Meltwater and We Are Social has found the average Australian TikTok user spends almost 1.5 hours on the platform every day. The dramatic decline in TV viewers under 18 does not mean total viewership of free-to-air TV has fallen by a similar amount. Commercial TV networks virtually stopped producing any children’s shows after a government quota was removed in 2021. They have instead been investing in more lucrative reality TV, news and sport.
Major supermarkets are accused of confusing and potentially misleading consumers with promotional labels which do not always reflect genuine discounts as Australians continue to struggle with the rising cost of groceries. New research by consumer advocacy group Choice shows one-in-four Australians find it difficult to tell whether certain promotional price tags at major supermarkets represent a genuine discount on the usual price. A variety of price tags from Woolworths, Coles and Aldi — including “While Stocks Last”, “Super Savers”, “Down Down”, “Prices Dropped” and “Member Price” — were examined in the research and more than 1,000 consumers across the country were surveyed. One example, which confused half of the respondents, was a coconut water product at Woolworths. It was priced at $4 “Price Dropped” tag, however, the price has consistently been $4 for almost 5 years since being reduced from $6 in July 2019. According to the consumer watchdog, where an item is offered at a sale or special price for an extended period of time, it may be misleading to call it a sale or special price, as the price has effectively become the new selling price. The research found that the most confusing label was “While Stocks Last” at Coles. Opinions were split over this soft drink product where about a third (31%) of the respondents said the product was discounted, roughly another third (36%) believed it wasn’t and the remaining third (33%) were not sure. Coles didn’t confirm whether it was a discounted price, but said “While Stocks Last” tickets “offer customers the chance to buy items which are only available at Coles for a short time, and which are unlikely to be restocked once the products are sold through.” The “Super Savers” label at Aldi also confused shoppers, with around a third of respondents unsure if it was a discount, according to the research. Aldi did not confirm whether these cucumbers were discounted but said the “Super Savers” offers across fresh produce, meat, fresh seafood and bakery provide “even better value on our already low-priced products” and prices “do fluctuate as they are more readily susceptible to market conditions, favourable or otherwise”.
The federal government’s eSafety commissioner won an emergency injunction in the Federal Court late Monday to force Elon Musk’s X to remove videos of last week’s Sydney terrorist attack after the billionaire mocked earlier take-down demands. The injunction requires X to block the video globally, but it captures only specific posts identified by the agency in its case, and new uploads of the videos, or those on other sites, would not be covered by the ruling. The eSafety commissioner has already threatened X with fines of as much as $782,000 for each day the video remains online and legal experts said an injunction was a last resort that relied on US courts to be enforceable. The disturbing video of last week’s Sydney church stabbing remains easily accessible on X, underlining inherent weaknesses in Australia’s online content rules, even as all sides of politics have blasted the “arrogance” of the social media platform and its owner. Barrister Christopher Tran, representing the commissioner, conceded during the urgent hearing that an injunction might have limited impact on blocking the video in Australia. “It’s probably out there on other platforms, so it might be said there’s a degree of futility in granting an injunction in these circumstances,” he said. In arguing for the court order, Mr Tran told Federal Court judge Geoffrey Kennett free speech concerns were not an issue because the videos depicted actual violence not matters of traditional speech. “This is a graphic and violent video,” Mr Tran said. “There will be irreparable harm [if it remains online]… this kind of material can be co-opted by those seeking to [fan public anger].” But Melbourne barrister Marcus Hoyne, appearing for X remotely, said some videos could have important free speech value, citing a previous case where an Indigenous family had wanted a footage of the death of their relative released, so the world could see the horror of it. Mr Hoyne stressed that the eSafety Commissioner’s orders captured the entire world, including countries where it would have no consequences for Australia. He also said that it was 2am on Sunday where his client was located which made it impossible for him to get instructions on how the company wanted to respond. Justice Kennett appeared to agree an injunction against X might have a limited impact. “The horse has bolted onto other platforms,” Justice Kennett said, asking whether the commissioner could pursue those sites too. Mr Tran said that was possible but argued that the fact the material could be accessed elsewhere did not mean a “loaded gun” should still remain in the form of the posts on X. Justice Kennett also raised questions about the reach of Australian law, asking if “there might be arguments about the territorial reach of [the act]” to US entities like X. Mr Tran said there was a clear connection to the case in Australia. Because the injunction is only preliminary, these issues were not fully examined. The court will instead determine where the law applies if the case goes to a final hearing. Melbourne University law professor Jeannie Paterson said even taking court action to enforce orders under the Online Safety Act might fail if foreign governments did not co-operate. “How successful this would be is unclear given that platforms have greater protection from tort and related liability in the US and arguably more stringent free speech protections,” Dr Paterson said. As a last resort, the eSafety Commissioner could apply to the Federal Court to order a social media company to stop providing that service in Australia, or for an internet service provider to stop block the service in Australia. However, the watchdog said banning a social media platform is very serious step, and would only be considered if a service poses a serious threat to the safety of Australians. The eSafety commission is led by Julie Inman Grant who Mr Musk likened to a “censorship commissar”. X has rebuffed Ms Inman Grant’s order for the removal of videos depicting the attack on Bishop Mar Mari Emmanuel as he conducted a church service that was live-streamed last week, saying it was akin to a global ban that “goes against the very principles of a free and open internet and threaten free speech everywhere”. X, in a statement released on Saturday, said it believed the commissioner’s order to “remove certain posts in Australia that publicly commented on the recent attack… was not within the scope of Australian law”. “There is a public conversation happening about the event, on X and across Australia, as is often the case when events of major public concern occur,” the social media platform’s government affairs account posted. “While X respects the right of a country to enforce its laws within its jurisdiction, the eSafety commissioner does not have the authority to dictate what content X’s users can see globally.” A spokeswoman for the eSafety commissioner said the take down notice only referred to videos of the attack, not the surrounding discussion about the event on X. Politicians from all sides criticised Mr Musk on Monday. Prime Minister Anthony Albanese said broadcasting of inflammatory content on social platforms risked exacerbating trauma for witnesses and survivors of violent events, calling X’s actions “extraordinary”. A 16-year-old boy was charged with terrorism offences after he allegedly stabbed Bishop Emmanuel at Christ the Good Shepherd in Sydney’s Wakeley. Police officers were injured in the subsequent riot, over which three men have been charged.
Ten says that Bruce Lehrmann should be forced to cover millions of dollars in legal fees for Network Ten and Lisa Wilkinson because he lost, and because he rejected an offer to drop his defamation case and walk away in August last year. The former Liberal staffer, who has been found by a Federal Court judge to have raped Brittany Higgins in a Parliament House office, lost his high-profile case against Ten and Wilkinson last week. He had sued over an episode of The Project that aired in February 2021 that interviewed Ms Higgins about her then-alleged rape. Justice Michael Lee found Ten had successfully shown it was more likely Mr Lehrmann raped Ms Higgins in the early hours of March 23, 2019, than not. Now the parties have filed their arguments about who pays what. The matter returns to court on May 1 for a hearing. On August 31 last year, Ten and Wilkinson made a “walk away” offer to Mr Lehrmann and his lawyers. They asked that the case be dismissed without any admission of liability, and that each side cover their own costs. He had 14 days to consider it. The offer was rejected less than two hours after it was made. Ten has argued that by that date in August, Mr Lehrmann had 21 affidavits, outlines of evidence and expert reports. “It must have been apparent to Mr Lehrmann, as at the date of the offer, that the chickens were coming home to roost,” Ten wrote. Ten – and Wilkinson’s own lawyers – are using this rejection to justify arguing for what is known as “indemnity” costs. An indemnity order is granted in exceptional circumstances and allows the successful parties to claim between 80 and 90% of legal costs.
Meanwhile, Liberal MP Linda Reynolds has vowed to continue with a defamation suit against Brittany Higgins if Higgins continues to claim there was a political cover-up after the senator’s former staffer was raped in Parliament House. Higgins made her first public comments on Saturday since Justice Michael Lee found on the balance of probabilities – the civil standard of proof – that Bruce Lehrmann had raped her in Reynolds’ ministerial office in 2019. While Higgins apologised to Reynolds for the hurt caused by the years-long saga, the former staffer said her “perceptions and feelings about what happened in the days and weeks after my rape” differed from those of Reynolds and her former chief of staff Fiona Brown. “I hope we can resolve our differences with a better understanding of each other’s experience,” Higgins said. Reynolds, in a written statement released on Sunday, said she appreciated Higgins’ apology but added she would continue with defamation action against her and her partner, David Sharaz, over statements the couple published on social media. Reynolds emphasised her legal action was never about the truth of the rape, but rather about claims Reynolds had failed to support Higgins and subjected her to a damaging political cover-up to protect the Coalition from scrutiny. “My action deals with what Justice Lee exposed as false allegations raised two years after the rape,” Reynolds said. Justice Lee’s finding that there was no political cover-up, which he said was the most important theme of The Project story, fuelled media and opposition scrutiny of a $2.4 million federal compensation payment to Higgins. The payment was arranged in December 2022 after prosecutors dropped charges against Lehrmann after a mistrial due to juror misconduct.
And that’s it for this week. And next week, I’ll be talking to Ben Weiss, CEO and co-founder of the platform Olliv, to learn more about how Australians are using crypto, the importance of making it more accessible, impact of crypto on the local economies, tips for first time traders, and the future of crypto in Australia as it becomes a key player in the market.
And I’ll be talking to economist Saul Eslake about Australia’s housing crisis.
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
