Bluesky app usage soars because users say that X and Musk are the big problems.
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.
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 43 in our series for 2024 and today’s date is Friday November 22.
First, I’ll be talking to Andy Cunningham, the Senior Regional Director, Australia & New Zealand at Autodesk. We’ll examine Autodesk research showing how Australian Design and Make companies, so architects, engineering, construction operations and manufacturing firms are behind the rest of the world in the kind of digital maturity they need to digitally transform their businesses.
And I’ll be talking to Indeed economist Callam Pickering about Australia’s latest jobs figures and what they mean for the Reserve Bank of Australia.
But first, let’s talk to Andy Cunningham
So what’s happening in the news?
Chinese leader Xi Jinping told US President Joe Biden that he’s ready to work with Donald Trump to improve the relationship between the world’s biggest economies. Speaking at the start of what’s expected to be their final meeting before Trump takes office, Xi told Biden that the US and China should strive for peaceful co-existence over the long term. He said “solidarity and cooperation” are needed to help humanity overcome difficulties, adding that “neither decoupling nor supply chain disruption is a solution.” Biden has just about two months before he hands power to Trump, who has threatened 60% tariffs on China — a level that risks decimating trade between the world’s biggest economies. Early appointments by the president-elect — including China hawks Marco Rubio as secretary of state and Mike Waltz as national security advisor — suggest he is readying an adversarial stance toward Beijing. Biden and Xi have sought to stabilize relations and build on a summit a year ago in San Francisco, which reset ties after his administration shot down a Chinese spy balloon drifting over the continental US and former House Speaker Nancy Pelosi visited Taiwan, prompting Beijing to hold military exercises surrounding the island. Taiwan remains the biggest military flashpoint between the US and China, and the most sensitive issue for Xi.
Some disgruntled X users have moved over to the social media platform Bluesky, in the search for a more regulated alternative that is not influenced by tech tycoon and X owner Elon Musk. Bluesky said in mid-November that its total users have surged to 15 million, up from 13 million in October. It has at times been the most downloaded app in US Apple stores in the past few days. The platform is benefiting from dissatisfaction with X since it was purchased by right-leaning Elon Musk, who is closely tied to Donald Trump’s successful election campaign, Reuters has reported. Despite its growth, the platform still has a way to go to compete with X, which still has over 300 million monthly active users. The Bluesky platform resembles Elon Musk’s X, with a “discover” feed and a chronological feed for accounts that others follow. It was first introduced as an invite-only space that was opened to the public in February of this year. Users can send direct messages, pin posts and find “starter packs” that provide a curated list of people and custom feeds to follow. The platform was conceptualised by Jack Dorsey who was the CEO of X when it was known as Twitter. It began as a Twitter-funded project that would be an “open and decentralised standard for social media”. Later, it became its own entity and as of May 2024, Mr Dorsey was no longer on the board. It is now mostly owned by CEO Jay Graber. Bluesky says that unlike traditional social platforms, that operate on centralised servers controlled by a single entity, Bluesky’s AT Protocol is designed to “decentralise social networking. This approach aims to prevent any one organisation from having total control over the network or its users’ data, creating a more “democratic and accountable digital ecosystem.
And neither major party will try to win over voters at the federal election with an offer of substantial tax relief after Opposition Leader Peter Dutton tied his policies to the state of a budget facing $120 billion of deficits. As Treasurer Jim Chalmers in effect ruled out going to next year’s election, expected by May, with a major overhaul of personal income tax, Dutton said he wanted to “see the books” before offering any pledge despite earlier this year promising “strong” tax reforms for voters to consider. Both are under pressure to consider reform after the Parliamentary Budget Office analysis showed that without a change to tax rates and thresholds, Australians would face a half-trillion-dollar increase in their personal income tax over the next decade. Any tax relief, however, would punch a substantial hole in the budget, which is forecast to be in the red for the rest of the decade. Between the current financial year and 2027-28, the government is expecting cumulative deficits of $122.1 billion. Earlier this year, Dutton said he would go to the election with “strong tax reforms in keeping with the stage 3 tax cuts”. Asked on Monday if he would take tax cuts to the election, Dutton said his focus was on bringing inflation down, noting he wanted to see the state of the federal budget. “We want to see the books,” he told Sky News. “Let’s see how much money is in the bank.” Speaking in Canberra, Chalmers said while the government had delivered tax relief to all working people through its revamped stage 3 tax cuts that started from July 1, the chances of another round were low. “People shouldn’t expect us to take a big new income tax cut policy to the 2025 election,” he said.
The Reserve Bank board has signalled it is highly unlikely to cut the cash rate in either February or April, short of an unexpected downturn in employment, sharply eroding the possibility of lower interest rates before the next federal election. The central bank on Tuesday said it had reviewed scenarios in which inflation declined materially more quickly than forecast, but revealed it would want to see a sharp decline sustained over more than one quarter. “Members noted that this could warrant an easing in the cash rate target, but that they would need to observe more than one good quarterly inflation outcome to be confident that such a decline in inflation was sustainable,” the board said in the minutes of its November 4-5 board meeting. Economists said the new language appeared to rule out either a February or April cash rate cut unless there was an unexpected deterioration in the jobs market that forced the central bank to act. After the Australian Bureau of Statistics releases the December quarter consumer price index on January 29, the statistics agency will not release another set of quarterly figures until April 30. That means there will not be two quarterly inflation prints available until the RBA’s May 20 meeting.
This week, Woolworths chief executive Amanda Bardwell and her rival at Coles, Leah Weckert and other executives from the two big supermarkets will have a chance to put their side of the story in public hearings run by the ACCC. They will say that the regulator chose a particularly volatile period to focus on, the turbulent end of the COVID-19 pandemic, when the cost of food products was surging. And, they will argue, the ACCC has simply misunderstood how discounting works. Whether they are convincing may not matter. The damage, people who are advising the supermarkets say, has largely been done. The public sees them as price gougers and Labor and the Coalition have a clear target to attack, all while profits are more sluggish than they have been for years. The ACCC has hired experienced litigator Michael Hodge, KC. Hodge has been dubbed the “baby-faced assassin” for his work as the senior counsel assisting the financial services royal commission. The regulator has accused Woolworths and Coles of manipulating shoppers by slapping “Prices Dropped” and “Down Down” promotions on hundreds of products – from Dettol hand wash to MasterFoods marinade and baby formula – despite pricing them higher than only a few months earlier. The ACCC claims came at a difficult time for Labor in Canberra. Higher mortgage payments and grocery bills were hurting family budgets, and Prime Minister Anthony Albanese was being criticised by the Coalition for doing nothing about it. This has made supermarkets an easy target.
And banking major National Australia Bank, or the NAB is in trouble on two fronts.
First, it allegedly failed to respond to hundreds of customers seeking assistance to pause repayments on home or business loans, only self-reporting the issue to the corporate regulator after rival Westpac was sued over a similar scandal. In court papers filed on Monday morning, the Australian Securities and Investments Commission alleges NAB and its subsidiary AFSH Nominees failed customers who were suffering from domestic violence, medical emergencies, and those locked inside in response to the Covid-19 pandemic, breaching laws that had been in place for almost 11 years. ASIC claims NAB failed to respond to at least 345 customers when they applied for hardship measures between 2018 and 2023, warning the bank “unlawfully” failed its customers “when they needed them most”. ASIC Chair Joe Longo warned NAB had breached its duties to people suffering domestic violence, battling serious medical conditions, or dealing with business closures or job loss.
Secondly, NAB allegedly withdrew a job offer because it found out that the woman it had offered the role to was pregnant, according to a new court claim, which has also alleges that a branch manager made a number of sexist remarks that humiliated her. The claim raises questions about the internal culture at NAB, the nation’s largest business lender, as it prepares to fight another unfair claim that alleges a “boys’ club culture” permeated its Sydney trading floors. This latest claim, however, relates to alleged conduct at its Pitt Street Mall branch. Jenny Shao first sued the bank in October, but the Federal Circuit Court only released details of the claim on Monday. In the statement of claim, Ms Shao alleges that, after getting offered and accepting a part-time role at the branch in early 2022, NAB quietly rescinded the offer upon finding out she was pregnant and changed its systems to indicate she declined the job. When heading to the branch in May to meet the branch manager, Victoria Cunha, and the team in May following her acceptance, Ms Shao claims she was humiliated. Ms Shao, who was pregnant with her third child at the time, allegedly told her manager she had something to tell her. According to the court filing, Ms Cunha allegedly responded with words to the effect of: “Oh my God, don’t tell me you’re pregnant”. When Ms Shao said she was, it is claimed Ms Cunha continued: “Oh no, does that mean you can’t work anymore?” Ms Shao allegedly reassured Ms Cunha she could continue to work, but had a doctor’s appointment on her starting day and therefore would be late. The statement of claim alleges that Ms Cunha responded “but would it be responsible for you to start the role now because in six months’ time, you will be gone?” “[Ms Shao] was shocked, hurt and humiliated and commenced crying,” the statement of claim says. “Ms Cunha stared at [Ms Shao], made her feel embarrassed and humiliated and in response, [Ms Shao] said: ‘It must be the hormones’.” According to the statement of claim, while she was introducing Ms Shao to the team later in the day, Ms Cunha also allegedly said, “this is Jenny, and it’s a hello and a goodbye”. Ms Shao, again, claimed to have felt humiliated and embarrassed.
Amcor, the world’s biggest consumer packaging group, is buying out New York-listed packaging business Berry Group in a deal which values Berry at around $US8.4 billion ($A13 billion). The all-scrip deal will create an enlarged entity with 400 packaging plants around the world, 75,000 staff and thousands of customers in consumer and healthcare packaging. After the merger of the two groups, it will operate more than 400 production plants. The enlarged group will have combined revenues of $US24 billion and adjusted EBITDA of $US4.3 billion. Under the merger structure, Amcor shareholders will own about 63% of the combined company, with Berry shareholders owning 37%. The deal caps an extraordinary rise for Amcor, which began in the early 1860s as a humble paper mill on the banks of the Yarra River in its home city of Melbourne. Amcor is listed on the NYSE and has CHESS depositary interests that trade on the ASX. It spent $US6.8 billion purchasing Bemis Co in the US in 2019, and after that deal it shifted its primary listing to the NYSE from Australia. The Amcor business currently has 212 plants in 40 countries around the globe, with 41,000 employees. It makes bottles, plastic pouches, wraps and containers for food, beverage and healthcare customers.
Westpac would pay more than $100 million under a potential new bank levy proposed by Treasury to keep branches open in the bush, under a redistribution system enabling banks to trade regional banking service credits similar to a carbon trading scheme. Industry participants warned that a bank levy to promote services in the bush would penalise emerging digital-focused disrupters such as Macquarie Bank by imposing higher costs and making it harder to compete aggressively against the four largest lenders on home loans. In response to a backlash from regional voters about hundreds of branch closures and a Senate committee inquiry, Treasury has proposed a so-called regional banking service obligation for branches and ATMs, relative to the size of a bank’s household deposits. Under a preliminary formula, Commonwealth Bank of Australia would pay a levy of about $75 million a year, Macquarie Bank $75 million, ING $60 million, ANZ $20 million and HSBC $20 million, according to sources familiar with the Treasury formula shared with industry participants. Bendigo and Adelaide Bank would be the big winner, receiving about $200 million from the annual pool. National Australia Bank would gain about $75 million due to its farming banking business presence in the regions. Agribusiness specialist Rabobank would also be in credit. Banks deemed to have a deficit of regional services would be able to buy credits from banks with a larger footprint in the bush, similar to Labor’s former carbon emissions trading scheme. “Banks that have not met the floor or baseline could purchase credits that other banks have earned through providing the required level of services,” Treasury noted in the confidential consultation paper shared with banks.
And that’s it for this week. And next week, I’ll be talking to Jason Baden, the Regional VP Australia New Zealand for F5. With the ongoing (and growing) cyber threats pushing cyber security front-of-mind, Jason can speak about how important it is to invest in continuing education to bolster Australia’s collective IT and cybersecurity skill set, given how rapidly and dramatically the landscape is evolving in the cybersecurity space.
And I’ll be talking to independent economist Craig James, formerly chief economist of CommSec, about what to expect in the market in the following 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.
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Wishing you all a safe and healthy week, And looking forward to bringing you Talking Business next week.
