The National Climate Risk Assessment estimates losses in Australian property values of $611 billion by 2050.
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 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 32 in our series for 2025 and today’s date is Friday September 19.
First, I’ll be talking to Jennifer McCloy, an established business strategist with a background in crisis communications and venture capital. Jennifer, the founder of Baseline, will talk about the company’s work tackling concussion and injury management, particularly for children but aiming for all sport.
And I’ll be talking to independent economist Craig James about what to expect in the week’s market.
But first, let’s talk to Jennifer McCloy.
So what’s happening in the news?
President Trump entered the White House in January promising both the “largest deportation program in American history” and a “golden age” for American businesses. But in recent weeks, the tension between those two promises has spilled out into the open, leading Mr. Trump to reverse or contradict some of his most significant anti-immigration policies when they threatened to disrupt the economy. Mr. Trump has celebrated his success in driving down illegal border crossings and in cracking down on immigration more broadly. But he walks a careful line when his hard-line policies collide with his economic agenda — particularly when it comes to foreign workers, student visas and industries that rely on immigrant labor. The changing positions have not only infuriated his far-right allies, but have also confused those aiming to carry out his deportation policies. “His heart isn’t in the nativist purge the way that the rest of his administration’s heart is into it,” said David J. Bier, the director of immigration studies at the Cato Institute. “He’s always been someone who likes to dabble in that type of rhetoric. But at the same time, he’s always had a soft spot for the economic needs from a business perspective.” Mr. Trump last week faced an uproar after immigration agents arrested nearly 500 workers, most of them South Korean citizens, at the construction site of an electric vehicle battery plant in Georgia. The raid caused deep anger in South Korea — a key U.S. ally and trading partner — and had the potential to discourage exactly the kind of foreign investment in U.S. manufacturing that Mr. Trump is trying to achieve. Even though the Trump administration had argued the workers were in the United States illegally, Mr. Trump temporarily paused the deportations to consider allowing the South Korean workers to stay in the United States and help finish the factory, according to officials in Seoul. Most of the workers did end up returning to South Korea. Mr. Trump similarly appeared to pull back on his hard-line approach to student visas when it risked upending the finances of American colleges and universities. In May, Secretary of State Marco Rubio announced that the Trump administration would work to “aggressively revoke” visas of Chinese students, and that the administration would “enhance scrutiny” of future applicants from China. Chinese undergraduates often pay full tuition for their education. Nearly two months later, Mr. Trump shocked his conservative allies when he said he would let 600,000 Chinese students into American universities. “I like that other countries’ students come here,” Mr. Trump said. “And you know what would happen if they didn’t? Our college system would go to hell very quickly.”
A federal appeals court denied President Trump’s attempt to block Lisa Cook, a Federal Reserve governor, from participating in a key meeting of the central bank. The decision from split 2-1 along party lines, marks another defeat for the White House’s efforts to control the Fed and economic policy. Trump has sought to oust Cook over allegations of mortgage fraud, though Cook has not been charged with any wrongdoing. The Federal Reserve Act specifies that presidents can only fire Fed governors “for cause,” and Trump has sought to leverage allegations of mortgage fraud as a sufficient cause for firing. The court’s decision comes just weeks after Trump said he fired Cook, who responded by suing Trump based on “an unsubstantiated allegation” and that her firing violated her due process rights. If Trump is ultimately successful in removing Cook, it would mark the first time a Fed governor was fired by a president in the central bank’s 111-year history.
China has formally invited Donald Trump to Beijing for a summit with President Xi Jinping. But here’s the problem: the White House has not yet responded as the countries are still far apart on trade issues and the flow of fentanyl. Earlier this month when Putin and Modi met Xi Jinping in Beijing, Trump wrote on Truth Social that it looks like the US had lost India and Russia to “deepest darkest China.” So any meeting in Beijing is in doubt. Treasury secretary Scott Bessent on Sunday met Chinese vice-premier He Lifeng in Madrid for a fourth round of negotiations negotiating a deal over TikTok whose future has been in limbo for months as Washington pushed ByteDance, its parent company, to sell its U.S. operation to American investors. Some hope that will pave the way for President Trump to visit Beijing just before the October 31 Asia-Pacific Economic Cooperation forum in South Korea. In recent days, two US cabinet officials — secretary of state Marco Rubio and defence secretary Pete Hegseth — have spoken to their Chinese counterparts, raising speculation about a meeting between the presidents. But insufficient progress in the US-China talks have reduced the odds of a Beijing summit. So now, it’s more likely that Trump and Xi will hold a lower profile meeting at APEC, AKA the Asia-Pacific Economic Co-operation. Still, China needs a deal because its economic slowdown deepened in August with exports to the U.S. falling off drastically, Pressure is growing for Trump and Xi to meet in person, something seen as key to achieving a permanent truce. This might be what is driving the TikTok development — that it’s a carrot to get Trump to visit China.
Super Retail, the owner of Rebel Sport, is hunting for a new chief executive after Anthony Heraghty was fired for lying to the board about an alleged affair with the company’s former head of human resources, Jane Kelly. The listed retailer, which also owns the BCF, Supercheap Auto and Macpac brands, said the decision followed new information provided by Heraghty at the end of last week. After reviewing the information, the board concluded that his earlier disclosures were inadequate. “In light of this new information, the board has concluded Mr Heraghty’s prior disclosures were not satisfactory,” the company said on Tuesday. But if Judith Swales who heads the board and her fellow directors want applause, they are likely to be sorely disappointed. At every possible turn, the board has mishandled this sordid episode – and now it must deal with the consequences. The bottom line: Super Retail has been entangled in a high-profile court battle with two former legal executives for more than a year. They are whistleblowers and at the centre of their embarrassing claims was the alleged relationship between the chief executive and head of the human resources division. In April 2024, Super Retail entered mediation with former legal chief Rebecca Farrell and her former co-worker Amelia Berczelly over their claims of bullying, harassment, the alleged misuse of funds and failing to provide a safe workplace and breaches of governance. The board, then led by Sally Pitkin, said Super Retail had engaged an independent external law firm to investigate the claims, which at the time it said were unsubstantiated. Judith Swales took over as chairman following the company’s annual meeting last October after Pitkin stepped down. Pitkin remains part of the case before the Federal Court, which was launched in July last year after the failed mediation. Earlier this month, Harmers Workplace Lawyers, representing the two ex-legal employees, issued 35 subpoenas to companies and individuals to provide documents that are relevant to their claims. The case is due to be heard in February. The Australian Securities and Investments Commission has very recently conducted interviews with Heraghty and Kelly, as part of an investigation into the circumstances surrounding the whistleblower complaints made by Farrell and Berczelly. Whether the ASIC interviews forced the board to examine the past disclosures by Heraghty is not clear. However, the board and its chief executive spent the weekend locked in intense discussions that have resulted in his brutal termination. The termination places Super Retail among a growing list of global companies grappling with the fallout from allegations about office relationships. Nestlé executive Laurent Freixe was fired last month after investigators found he had not declared a relationship with a subordinate. In July, Astronomer chief executive Andy Byron resigned after being filmed on a stadium “kiss cam” with the firm’s chief people officer at a Coldplay concert.
ANZ will cut the pay of current and former executives after it was hit with a record $240 million fine by the corporate watchdog for misconduct, leading to warnings that the bank’s board could face a second strike on its remuneration report at its annual general meeting. Former chief executive Shayne Elliott, who led the bank from 2016 until May this year, is among those whose pay could be clawed back after the Melbourne-based bank promised “further accountability” as part of its response to the scandal. Former retail banking boss Maile Carnegie and recently departed markets chief Anshul Sidher are also likely to have their remuneration scrutinised. The Australian Securities and Investments Commission and ANZ will ask the Federal Court to impose the $240 million fine to settle a case brought by the corporate regulator, after the bank admitted to incorrectly reporting bond trading data to the federal government, as well as widespread misconduct at its retail division that affected tens of thousands of customers. ASIC chairman Joe Longo slammed the company’s behaviour as “grubby”. “There are fundamental issues with ANZ’s risk and compliance culture that require the board and executives’ urgent attention,” he said. MST Marquee banking analyst Brian Johnson warned that the bank’s board, led by chairman Paul O’Sullivan, was at risk of facing a second shareholder strike against its remuneration report at the upcoming annual general meeting in December. If that happened it would trigger a vote on whether to hold a so-called “spill meeting” where all directors must stand for re-election. “The ANZ board has not done a particularly good job,” said Johnson, who has covered the sector for more than three decades, in a blunt note to clients. ANZ’s shareholders are set to pick up the tab for the $240 million fine, as well as a further $150 million that ANZ revealed it would spend to address shortcomings in its non-financial risk management practices. It will submit the plan to the Australian Prudential Regulation Authority on September 30. The plan follows an independent review that identified “persistent weaknesses” in its non-financial risk management across six areas: culture; capabilities and consequences; accountability; governance and reporting; policies and practices; and prioritisation and execution. The matters for which ANZ was fined include its management of a $14 billion government bond deal in April 2023, and also its incorrect reporting of bond trading data to the federal government, where it overstated volumes by tens of billions of dollars over nearly two years. ANZ has agreed to pay $125 million in relation to this matter. That settlement comes after a two-year probe into the actions of ANZ’s traders after it was appointed to manage the interest rate risk associated with a $14 billion bond sale by the Australian Office of Financial Management. That investigation was expanded to include allegations that ANZ inflated the amount of government bonds it traded, putting it in line to be awarded lucrative government debt sale roles. “In the bond trading case, ANZ was in a trusted position and its conduct had the potential to reduce the amount of funding available to the government,” Longo said. “This funding is used to support critical services including Australia’s health and education systems, affecting all Australians. When public funds are put at risk, every Australian pays the price.” In ANZ’s retail division, the regulator said the bank had failed to refund fees charged to thousands of dead customers, and also did not respond to family members dealing with deceased estates in a timely manner. It was also fined for making false and misleading statements on savings interest rates, where it didn’t pay the correct rate to tens of thousands of customers
Insufficient action on climate change will lead to significant productivity losses by 2060, according to new research from Oxford Economics Australia. The economic research body, which will release the full details of its modelling next week, has called for the government to look past short-term pain when setting emissions reduction targets. “Our analysis shows that while the transition to net zero carries short-term costs, it secures higher productivity and resilience in the long run,” said Alex Hooper, head of climate and energy economics. “Doing nothing on climate change may look safe in the short run, but from 2035 it sets us on a steady decline.” While OEA had not finalised its modelling on an appropriate 2035 emissions reduction target, head of consulting Kristian Kolding said it should be “both feasible and ambitious”. “In an era of short attention spans, we cannot afford to have short-term thinking,” Kolding said. One of the major factors in the OEA modelling contributing to expected productivity losses was the severe physical damage caused by extreme weather events, which are predicted to occur with accelerating frequency. “We’re in a world where increasingly investment in our economy is directed towards maintenance and replacing our capital stock, rather than investing in new productive capacity,” said Hooper. “Over time, that just erodes our ability to produce as much with the same dollar would otherwise in a baseline scenario.” OEA’s modelling has changed over time, incorporating new knowledge and best-practice science. “A couple of years ago, most forecasters or estimators linked economic damage related to climate change to average temperatures,” said Hooper. “There’s been a recognition that average temperatures aren’t really enough because we also have this volatility, which, in a place like Australia, is leading to things like our big flood events. So now we take that into account.” OEA also highlighted macro-scale changes in the construction sector that presented opportunities for the energy transition. The research suggests that work on the publicly funded transportation boom has peaked and investment, primarily private, is shifting to the electricity sector, which is witnessing record levels of construction as transmission and distribution systems are built as part of the energy transition. But Adrian Hart, OEA’s director of construction and infrastructure consulting, said the most significant barrier to utilising this opportunity was a mismatch in the skills of Australian workers. The Albanese government will reveal its much-anticipated 2035 emissions reduction target this week, a range target of at least 60% or more emissions reductions on 2005 levels is expected.
One million homes will be in “very high risk” zones by 2050 and effectively uninsurable, the National Climate Risk Assessment has warned, with the wider economy expected to take a hit from the effects of climate change. Alongside a loss in property value of $611 billion by 2050 under a 2 degrees Celsius warming scenario, the first national assessment warns of $211 billion in lost wealth from reduced labour productivity. It paints a picture for housing where, even under 2 degrees celsius warming, some areas will become too costly to live, and planning laws for construction and home insurance business models will have to change. The report’s release comes days ahead of the federal government announcing a 2035 target for reducing emissions. It will be taken to New York, where other nations will also submit their updated targets. The Climate Change Authority says based on current global commitments the world is expected to warm by about 2.9C, if those commitments are met. Emma Aisbett, economist at the Australian National University, said the $611 billion hit to property values modelled in the national assessment is only the accounting of an expected economic contraction. “What’s really driving in these models that loss in property value is actually the contraction of the economy. It’s the fact that industries are dying, that people can’t afford the houses,” Dr Aisbett said. “The property losses from disasters and rising sea levels, that actually comes on top of those effects that they are modelling.” The insurance industry has already sound the alarm that its long-term sustainability is at risk from climate change. Insured losses from “insurance catastrophes” have grown from 0.2% of gross domestic product over 1995 to 2000 to 0.7% of GDP over 2020 to 2024. And already 15% of household insurance premiums can be priced at more than four weeks of gross household income, according to the report, which forecasts insurance costs will also rise for properties that can be insured. “There are homes at threat from bushfire, from flooding, from rising sea levels,” Dr Aisbett said. “All of these disasters are systemic risks, and the current insurance industry cannot support dealing with that systemic risk because the way insurance works is it’s meant to be an unusual event and you got unlucky, and therefore we share that risk. “[When] up to a million homes are at risk, the industry, as it is currently regulated and set up, cannot handle that. “[And] if projects can’t be insured, they essentially can’t be built, because no-one can take that sort of risk on. … People don’t always appreciate how crucial insurance is to actually getting investment happening.”
And that’s it for this week. And next week, I’ll be talking to Michael Horin, a principal at Clarity Aged Care Advisors about the seismic shift taking place in the Australian aged-care industry – more Australians, especially those with means, will pay more for their aged care.
And I’ll be talking to Rabobank economist Teeuwe Mevissen about how the Chinese economy is dealing with Trump’s tariffs.
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.
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Looking forward to the next episode of Talking Business next week
