The Reserve Bank of Australia has sent a pretty clear warning: interest rates may be going up next year, for the first time in two years
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 44 series for 2025 and today’s date is Friday December 12.
First, I’ll be talking to Clinuvel CEO Philippe Wolgen. Clinuvel has developed innovative solutions for acute and systemic disorders affecting the skin and brain.
And I’ll be talking to independent economist Saul Eslake about the economic outlook for Australia and the world in 2026.
But first, let’s talk to Philippe Wolgen
So what’s happening in the news?
Elon Musk is furious with the European Union after they slapped a $140 million fine on his social media platform, X, for breaking their Digital Services Act. The fine targets issues like misleading design around X’s blue checkmark, lack of transparency, and failure to share public data. Musk fired back with a blunt “Bulls***” and even called for the EU to be abolished altogether, suggesting nations should have more sovereignty. His anger was echoed by some top Trump-era officials, who framed the fine as part of a broader attack on American tech companies and free speech. This drama comes amid growing tension between the U.S. and the EU over free speech, immigration, and the war in Ukraine. But the EU insists the Digital Services Act is not about censorship—it’s about enforcing rules on tech companies, including removing illegal content and improving transparency.
And then there’s Hollywood, because the drama there is juicier than half the movies they make. Paramount Global has just lobbed a massive new offer to buy Warner Bros. Discovery — an all-cash bid worth $108 billion. That easily tops the $83 billion deal Warner announced with Netflix just last week. Important distinction: the Netflix deal only covers Warner’s streaming service and studios. If that went through, CNN and the other cable channels would be spun off. Paramount, meanwhile, wants the whole thing. This push is being driven by Larry Ellison — yes, the Oracle co-founder — and his son David, who now run Paramount. Their pitch is simple: combine Paramount and Warner and you get a Hollywood super-studio big enough to take on Netflix, Amazon, Apple and Disney. The Ellisons actually forced Warner’s hand earlier this year with an unsolicited bid, but CEO David Zaslav showed little interest in selling. Paramount says Warner never meaningfully engaged with any of their six proposals. Netflix, for its part, is now talking to investors. And then there’s the politics. Any takeover has to clear the Trump administration’s regulators. The Ellisons have ties to Trump, and they’ve been reshaping CBS News to appear less adversarial — including hiring Bari Weiss as editor-in-chief. But Trump himself is noncommittal. He says Netflix is a great company, but whether letting it absorb Warner makes economic sense “will be for economists to tell” — with him involved in the decision too.
Rahm Emanuel — yes, the former Chicago mayor and Obama chief of staff — is seriously exploring a 2028 presidential run. And he’s picking a big, attention-grabbing fight: he wants the U.S. to follow Australia’s lead and ban kids under 16 from most social media. Emanuel says the evidence is clear: social apps are addictive, they’re harming kids’ mental health, and Big Tech is putting profits over protection. And in classic 2020s irony, he plans to launch his call to action… on social media. He says the debate comes down to a simple choice: “Who’s the moral guiding light for our kids — adults, or algorithms?” He wants lawmakers to target the platforms teens actually use most: TikTok, Instagram, and Snapchat. This is part of a bigger pattern. Emanuel has been sharpening his policy stances heading into a crucial election cycle, often calling out his own party — especially on messaging around education and public safety. And yes, it puts him at odds with Democrats who are increasingly leaning on influencers and online campaigning. Emanuel says that’s fine: reaching adult voters is one thing, but protecting kids is a public-health issue. It’s also a contrast with some of his would-be rivals. Tech companies have fought these proposals hard, claiming bans restrict free speech — and Emanuel himself once took donations from Silicon Valley heavyweights. He insists that just proves he’s willing to break with them now. Meanwhile, states are experimenting: California, Maryland, Illinois, Florida — all taking swings at regulating kids’ online access, with mixed results and plenty of court battles. Congress is in the game too: bipartisan bills to raise age limits and remove harmful features have passed the Senate with huge margins but stalled in the House. Australia is already doing what Emanuel is proposing. Their new law blocks under-16s from all major platforms and threatens huge fines for companies that don’t take “reasonable steps” to keep kids out. Some U.S. voters are open to the idea — polls show anywhere from mid-40s to nearly 60% support, depending on the state and age group. Emanuel knows any national ban would face massive legal challenges. But he thinks the winning argument is to frame it not as regulating technology — but as protecting kids from a public-health threat. And if he actually jumps into the 2028 race, expect this to be one of his signature issues.
The Reserve Bank has sent a pretty clear warning: interest rates may be going up next year, for the first time in two years. At its final meeting of the year, the RBA kept the cash rate on hold at 3.6%, as everyone expected. But what really caught attention was the shift in tone from governor Michele Bullock. She said inflation risks have now flipped to the upside — and if price pressures don’t ease, the bank will raise rates. In her words: “If it looks like inflation isn’t coming sustainably back to target, the board will have to act — and it will.” Forget about rate cuts anytime soon. Bullock was blunt: they’re not even on the horizon. The real question now is whether the RBA simply holds for longer… or whether it needs to hike. Economists say this was the hawkish pivot they were expecting. NAB’s Sally Auld says February is now a “live meeting” for a rate rise, and markets agree — pricing the chance of a February hike at around 40%, and almost fully pricing one in by May. Why the shift? Economic growth has picked up, consumer spending is stronger than expected, the labour market’s still tight, and inflation jumped to 3.8% in October — well above the RBA’s 2–3% target band. Some of the recent inflation spike may prove temporary — things like rebates rolling off and noisy monthly data — but Bullock admits the bank can’t be sure yet. And if these pressures turn out to be persistent, the board won’t hesitate to lift rates. As one strategist put it: this isn’t a question of if the RBA will hike next year, but when.
Australia’s federal budget is about to get tighter — and power bills are about to get higher. Treasurer Jim Chalmers is warning that next week’s mid-year update will include tough calls, starting with the end of the national power-bill discounts on December 31. Governments have spent almost $10 billion on these rebates since 2022, but Chalmers says the era of temporary subsidies is over. Instead, the focus shifts to longer-term relief: cheaper medicines, more bulk billing, wage growth, and those staged tax cuts — about ten dollars a week next year, with more to come. The timing isn’t great. Inflation has ticked back up to 3.8%, and the government expects to revise its forecasts higher. Ending the bill discounts will actually push inflation higher again — they’d been suppressing the headline number. Economists like former RBA adviser John Simon say the subsidies were bad policy from the start, masking the real inflation problem and delaying more meaningful fixes. The budget meanwhile is straining under huge pressures: the NDIS, defence, health, aged care, and a rising interest bill. The opposition is pouncing, arguing Labor promised lower power bills but delivered higher ones, and that the rebates only papered over deeper energy failures.
A political headache is growing in Canberra, with multiple ministers now caught up in a widening travel expenses controversy. Communications Minister Anika Wells has referred herself for an audit after billing taxpayers for family travel to big-ticket events — three AFL grand finals, two Boxing Day Tests, the Formula 1, and even a Thredbo ski trip. She maintains everything was within the rules, but says she’s asked for the review “for the avoidance of doubt.” But she’s not alone. The saga has now swept in Trade Minister Don Farrell and Attorney-General Michelle Rowland. Rowland charged more than $21,000 for a week-long family trip to Perth during the NSW school holidays. Farrell billed taxpayers for family travel to the Australian Open across several years and to AFL grand finals, and also flew a family member to Uluru for a luxury sunset dinner experience. Independent MPs say the problem isn’t just individual decisions — it’s the rules themselves. The “family reunion entitlement” lets MPs claim three business-class return flights a year for family members outside of Canberra, plus a separate pool of Canberra travel. Critics say that might be technically compliant, but it doesn’t always pass the “pub test”. Senator David Pocock says it’s time to tighten the rules, while teals like Monique Ryan say family support is important — but spending still needs to meet community expectations. The opposition is piling on. Coalition deputy leader Ted O’Brien says Wells showed “a lack of judgment,” even if the spending was technically allowed. And, as always with expenses controversies, the scrutiny is spreading. Liberal MP Melissa McIntosh — who criticised Wells — is now defending her own claims, including taxpayer-funded travel for her son to compete in national judo championships and to attend the Bathurst 1000. With the government entering the final weeks of the year — and about to launch its world-first social media age ban — this expenses blow-up is fast becoming an unwelcome distraction.
The Grattan Institute says tens of thousands of Australians living with serious mental health–related disabilities are slipping through the cracks. Right now, the NDIS supports about 66,000 people with psychosocial disability, but there are another 130,000 adults who need help and aren’t getting it. The concern? If these people don’t get early support, their conditions may escalate until they do end up on the NDIS — which is already struggling with ballooning costs. Psychosocial disability covers conditions like severe depression, schizophrenia, bipolar disorder, and PTSD — issues that can seriously affect someone’s ability to work, communicate, or even manage day-to-day tasks. Grattan’s Sam Bennett says governments agreed two years ago to create “foundational supports” outside the NDIS — lighter-touch services for people who don’t qualify for full packages. But… nothing’s happened. And because mental health conditions tend to be episodic, they’ve never fit neatly into the NDIS’s criteria of “permanent” disability. The institute argues that without a dedicated national program, more people will end up in crisis care, in homelessness, or eventually on expensive NDIS packages. A cheaper, smarter fix, they say, is to support these adults earlier — outside the NDIS.
A new AMA report says the value of private health insurance is “eroding,” and patients are paying more for policies that cover less. Premiums keep rising faster than wages, and about 70% of policies now include exclusions — meaning Australians are often discovering what isn’t covered only when they need it most. Even though more people hold insurance than before the pandemic, many are downgrading to cheaper tiers that exclude major services like maternity or mental health care. And the AMA has flagged a worrying trend: insurers “phoenixing” old policies — closing them, then relaunching nearly identical products with higher price tags. Insurers push back, saying they’re paying record amounts for hospital care and that premium increases have stayed below health-inflation levels. But the AMA points to big variations in what insurers pay for the same procedure, depending on the insurer — and even the state you live in. Overall, only about 84% of premiums are being returned to consumers as care — lower than what the government previously assumed. The AMA wants that lifted to 90% and is calling for a new independent regulator. Insurers say that would send some funds broke. This debate lands at a tense moment: many private hospitals say they’re on the brink because insurer payments aren’t covering rising costs. At the same time, the public system is strained, meaning more people feel forced into private care even if they can’t really afford it. The AMA’s message is pretty blunt: fix private healthcare or risk dragging down the public system with it.
Australia’s water utilities are sounding the alarm over the next wave of mega–data centres. Some of the new proposals popping up around Sydney and Melbourne are asking for huge amounts of water — up to 40 million litres a day each. That’s roughly what 80,000 households use, or about 16 Olympic pools every day, just to keep the servers cool. These requests are more than 20 times larger than any current industrial water customer, and they’re coming in fast. Utilities say some developers want water commitments within six weeks because of global competition for data-centre investment — but that’s nowhere near enough time to plan properly. The Water Services Association of Australia, which represents more than 150 utilities, is now calling for clear water-efficiency and recycling standards. Their warning is simple: if we don’t manage water use smartly, public support for AI and digital infrastructure could evaporate. This comes as Australia races to attract data-centre investment. In NSW alone, there are plans for 22 new hyperscale centres with enough capacity to power more than a million homes. Some proposed campuses are enormous — multi-billion-dollar sites requiring gigawatts of power, hundreds of cooling units and backup generators. The challenge is that more efficient cooling often means more energy consumption, so it’s a delicate balance. Sydney Water estimates data centres could drive up overall water demand by up to 20% by 2035 and could account for over a third of all non-residential drinking water use. Water utilities say transparency is key: they want clear reporting, stronger standards and assurance that households won’t end up subsidising infrastructure upgrades for data-centre operators. The message from the sector is pretty clear: data centres are critical for the AI economy, but Australia needs to lock in smarter water use now — because the decisions made today will shape the country’s digital and environmental future for decades.
And finally, the Albanese government’s National Reconstruction Fund has tipped $45 million into Arnott’s — yes, the Tim Tam people — even though the company’s owned by US private-equity giant KKR. It follows a $36 million investment just last month in Patties Foods, the Four’N Twenty pies maker, which is backed by a Hong Kong private-equity firm. Arnott’s itself has had a bit of a turnaround: it posted a $34 million profit in FY25 after a $9 million loss the year before. But its books also show a big gap between operating profit and bottom-line profit — $235 million in operating earnings, largely wiped out by more than $200 million in financing costs. The company also sold a surplus manufacturing site in Melbourne this year. KKR has owned Arnott’s for about six years, and reports suggest it may be looking to sell down its stake — pretty standard timing for private equity. The exact terms of the government’s deal aren’t public. Treasurer Jim Chalmers is backing the fund’s investment strategy, saying it’s guided by a “first-class board” making the calls.
So that’s the week — and that’s how we wrap up 2025 for Talking Business: Elon Musk is fuming after the EU slapped X with a $140 million fine, proving even billionaires can get blue-checked by Brussels; Hollywood is serving up “Merger Wars: The Cash Awakens” as Paramount and Netflix duel over Warner; Rahm Emanuel is flirting with a presidential run by promising to ground kids from social media — a move sure to get plenty of parental likes; the RBA is hinting at rate hikes, wallets are bracing for a plot twist, Canberra’s drowning in travel-expenses scandal, the health system’s creaking, data centres want more water than a herd of thirsty camels, and the government’s writing $45 million cheques to Arnott’s — proving even Tim Tams can score government biscuits. Here’s to a big year ahead.
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This is the final episode of Talking Business for 2025. I want to wish all of you a happy and safe Christmas, and a wonderful holiday season. We’re looking forward to being back in February 2026 with the latest interviews and all the news in business, finance and economics. Thanks for listening, and warm wishes to you all.
