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 forty-four in our series for 2019 and today’s date is Friday November 29.

First, I talk to Justin Wastnage, the founder and CEO of Sydney tech startup Vloggi which is being billed as the ‘Canva’ of video content production, having built a platform to allow marketers with no filming skills or experience crowdsource video campaigns anywhere in the world and create authentic, professional-looking video content to help bolster digital marketing efforts.

And then I’ll be talking Alex Joiner, chief economist at IFM investors, looking at whether the house price rises in Melbourne and Sydney will create a “wealth effect”.

But first, let’s talk to Justin Wastnage.

Listen to the full podcast here:

President Donald Trump declared Tuesday that talks with China on the first phase of a trade deal were near completion after negotiators from both sides spoke by phone, signaling progress on the accord in the works for nearly two years. “We’re in the final throes of a very important deal,” Trump told reporters at the White House. “It’s going very well.” Trump announced Oct. 11 that he had reached the outlines of a “substantial” but partial deal that would see China ramp up purchases of U.S. farm goods, make new commitments to protect U.S. intellectual property, refrain from manipulating its currency and further open its financial sector to foreign investors.

Since then, the two sides have been wrangling over how to put the deal on paper and what tariffs the U.S. will drop in exchange. The negotiations have been complicated by strong support in the U.S. for pro-democracy demonstrators in Hong Kong and China’s suspicions that the U.S. is feeding unrest in the territory. Trump said Tuesday that the U.S. wanted to see things “go well in Hong Kong” but added that he was confident of a good outcome

Reserve Bank of Australia governor Philip Lowe has hosed down the prospect of quantitative easing saying it was another two rate cuts away. He asserted that the central bank would not move to such a tool until the official interest rate dropped to 0.25% which was still a “fairway” off. In a speech to the Australian Business Economists on Tuesday night, Dr. Lowe gave the market his strongest guidance yet on how the central bank would implement QE, saying that it would favour buying government bonds over corporate ones. “Our current thinking is that QE becomes an option to be considered at a cash rate of 0.25%, but not before that,” Dr. Lowe said.

The ANZ-Roy Morgan Australian Consumer Confidence index has continued its losing streak, falling 2.8% last week to its lowest level in more than four years. Weakness is across the board. Current financial conditions fell 0.1%, while future financial conditions plunge 4.4%. Current financial conditions are still above average but future conditions are now below.

And the fallout continues from the Westpac scandal where it has been accused of 23 billion breaches of laws aimed at hindering criminal money laundering and the financing of terrorism. With some of those breaches involving suspicious transactions in South-East Asia, it is alleged Westpac has potentially facilitated the most heinous of crimes – the commerce of child sex abuse with the AUSTRAC lawsuit accusing the bank of failing to update its systems to properly vet thousands of transactions that could be linked to child exploitation and live child sex shows in the Philippines and other parts of south-east Asia.

First, if you thought banks reformed since RC think again. Westpac removed Amanda Wood its anti-money laundering chief who reported the breaches to the board. She was told she didn’t have the skills for the job and would have to take a more junior role after informing the bank that it faced the largest fine in corporate history. The former senior AUSTRAC official was also one of the Westpac managers who first informed the senior echelons of the bank that it had failed to notify AUSTRAC of millions of transactions with foreign banks. All international money transfers must be reported to the money-laundering investigator.

Westpac chief executive Brian Hartzer has stepped down effective immediately to be replaced by chief financial officer Peter King as acting CEO while longstanding chairman Lindsay Maxsted will bring forward his retirement to early 2020. Maxsted announced the changes in a statement to the ASX at 8am on Tuesday where he also revealed Westpac director and head of the risk committee Ewen Crouch would not seek re-election at the AGM in December 12. “The board accepts the gravity of the issues raised by AUSTRAC,” Mr. Maxsted said.

The corporate watchdog has launched an investigation into Westpac over potential legal breaches linked to the bank’s money laundering compliance scandal, ahead of a series of critical meetings between chairman Lindsay Maxsted and investors. The Australian Securities and Investments Commission (ASIC) took the unusual step of publicly confirming it had started looking into possible breaches of laws it administers — most likely a reference to the Corporations Act.

And with the corporate cop confirming it was investigating potential legal breaches by Westpac, Moody’s said that while it was too early to estimate the value of any potential financial penalties, the AUSTRAC case was “credit negative because of the damage to the bank’s reputation and the adverse financial impact from potential fines and costs related to remedial actions”. “Compliance problems of this nature also highlight the corporate governance challenges of maintaining tight controls at large and complex institutions, and the negative spillover effects for the banks’ reputations,” Moody’s said.

Westpac’s board will withhold bonuses from all of its senior executives as an “interim” measure in response to the money-laundering compliance crisis engulfing the bank, with chairman Lindsay Maxsted set to hold crucial meetings with investors this week.  Mr. Maxsted pointed to actions it was taking in response to the crisis. It has closed LitePay, the product allegedly used for child exploitation payments; it has vowed to improve screening of payments, and it set up a financial crime board sub-committee. Westpac also said it would invest $25 million in data sharing to fight financial crime and make the financial crime function a direct report to the chief risk officer. It said any transactions that suggest potential child exploitation in high-risk areas would be prioritised and reported to AUSTRAC in 24 hours, which it said was faster than required.

Westpac is on the brink of losing a state government banking contract worth more than $100 million after the bank was hit with 23 million anti-money laundering breaches and allegations it ignored transaction patterns consistent with child exploitation activity. Victoria’s state Labor government will demand Westpac to explain why the bank shouldn’t be dumped ahead of the tender process, which is scheduled to begin sometime in 2020.

Scandal-plagued Westpac was set to be one of the two major banks to offer mortgages under the federal government’s first home loan deposit scheme. Now only National Australia Bank has been announced as one of the major banks for the scheme, which allows low- and middle-income earners to get financing without a large deposit. Westpac was axed as the other bank in light of the money-laundering allegations it is currently facing. Meanwhile, Labor has called for the bank to face a federal parliamentary economic committee in light of the allegations.

And while we talk about Westpac, the profitability of Australia’s major banks is under threat thanks to low-interest rates, intense competition, and open banking, according to a report from rating agency Moody’s. Moody’s Investors Service has reported on a number of factors that could erode ANZ, Commonwealth Bank, NAB and Westpac’s stronghold on the mortgage market. The recent halving of the cash rate from 1.50% to 0.75% is one such factor set to have a larger effect on the big banks in the coming years. The report states these effects will be more intensely felt in 2020, as monetary policy only started easing in June 2019, which is three months before the end of the big banks’ fiscal years “In addition to the challenge posed by low-interest rates, the possibility of further fines for breaches of regulations and top up provisions for customer remediation could restrict profit growth in 2020,” Moody’s said.

Woolworths chief executive Brad Banducci will forgo a $2.6 million bonus this year after taking responsibility for the retailer underpaying staff by as much as $300 million over the last nine years. Mr. Banducci confirmed on Wednesday his short-term bonus of $2.6 million would not be paid in 2020. Woolworths chairman Gordon Cairns has also accepted responsibility for the underpayments and will take a 20% reduction in his board fees this year.

Qantas Airways is planning to lay off hundreds of workers before Christmas, as the airline executes on its cost-cutting strategy. Preparations for hundreds of imminent redundancies come only weeks after it was revealed chief executive Alan Joyce earned $24 million including the vesting of bonus shares awarded for the airline’s strong financial performance.

Private hospitals will need to hold “greedy” specialists to account if they want to survive the so-called “death spiral” gripping the health insurance industry, according to the latest report from public policy think-tank Grattan Institute.  The Grattan Institute has made a raft of recommendations identifying $2 billion in possible savings a year, declaring if the changes are realised, it could “save private health care in Australia”.  If those savings were passed on to consumers, the report said insurance premiums could drop by as much as 10%.

Macquarie Media breakfast host Alan Jones’ 2GB morning radio show has lost about half its advertising revenue after a boycott over the radio veteran’s comments about New Zealand Prime Minister Jacinda Ardern. Mr. Jones has faced a commercial backlash since he made comments in August that Ms. Ardern should be given “backhanders” and have a sock shoved down her throat. Despite Mr. Jones apologising on-air, brands have continued to abandon his top-rating show that typically brings in about $12 million a year and is worth under 10% of the network’s revenue.

More than 7% of existing jobs in the Australian workforce stand to be displaced by technology advances in the next decade and the country is short of the skills required to do the new roles that will replace them, according to a new report conducted by respected global forecasting firm Oxford Economics. The new study, commissioned by tech giant Cisco, found that 630,000 roles are set to be lost, with construction, utilities, and manufacturing facing the most disruption.

These sectors are predicted to suffer from an 8.4%, 7.5% and 5.5% net reduction in jobs, respectively. At the other end of the spectrum to the job losses predicted, the healthcare sector is tipped to be the most resilient to automation and other tech-led job losses. It was found to be the biggest job creator over the next 10 years, with a 7.4% increase in the number of jobs in the industry, driven by an aging population and higher consumer spending, that would likely outstrip any disruption caused by new technologies.

Other sectors set to gain jobs according to the study included hotels and restaurants, which will experience a 4.2% employment jump, and finance and insurance, in which the number of jobs will increase 5.5%. In some sectors, the impact of technological disruption is already being felt. Earlier this year Telstra announced that it would axe a quarter of its contractors over two years, as part of its shift to reduce reliance on call centre staff and automate its customer service systems. The big banks have also been cutting back on customer service staff as more people access services via their mobile phones and the need for branches has been reduced.

Rio Tinto’s penchant for partnerships with some of the world’s biggest companies has resurfaced, with the miner and technology giant Amazon working together to boost young Australians’ skills in science, technology, engineering and maths (STEM). Rio has invited education providers to bid for funding grants to develop programs aimed at enhancing the STEM skills of school students. The mining giant will fund $10 million worth of programs, with the successful bidders to be chosen by an advisory board of business and education leaders. Amazon’s cloud computing division, known as Amazon Web Services, will assist the successful bidders to develop and expand their ideas, along with small business advisory firm BlueChilli. The funding grants are the latest initiative from big businesses to improve the quality of STEM skills in the Australian workforce. Boosting STEM in Australia is a particular focus for Rio, which was one of Australia’s earliest and biggest adopters of autonomous machines, robotics, and data science.

A Chinese dairy conglomerate has scooped up a trove of seminal Australian dairy brands, including Big M, Dairy Farmers, Pura and Farmers Union. Under the arrangement, the China Mengniu Dairy Company will fork out $600 million for Lion’s dairy and drinks business, which is currently owned by Japan’s Kirin Group. Berri, Daily Juice and Juice Brothers are also included in the deal, which must be approved by government regulators. Regulators recently rubber-stamped the same Chinese group’s $1.5 billion acquisition of Bellamy’s Organic infant formula.

Canadian convenience giant Couche-Tard has made an $8.6 billion takeover offer for struggling Australian petrol retailer Caltex. The Canadian group’s friendly all-cash takeover offer would derail the service station IPO that Caltex announced only on Monday. Caltex has confirmed to the market that it had received an “unsolicited, conditional, confidential, non-binding and indicative proposal” from the Laval-based firm that operates 5000 stores across Canada, the United States, Europe, Mexico, Japan, China, and Indonesia.

Couche-Tard’s offer would see it acquire all of Caltex’s shares by way of a scheme of arrangement at an indicative cash price of $34.50 cash per share less any dividends declared by Caltex. Caltex has been busy this year shoring up its convenience and petrol business as it grapples with a significant downturn in profit margins.

It announced Monday it will offload a half stake in 250 service stations around Australia into a $1.1 billion listed property trust. Caltex said it was planning the initial public offering (IPO) in the first half of 2020 for the 49% stake in the fuel and convenience stations after a wide-ranging review of its core 500-strong retail network. It will retain a majority 51% interest in the 250 sites and enter into long-term lease agreements for each service station. Caltex will pay the new real estate trust up to $100 million in rent in the first year. The rationalisation of the group’s convenience network will see it put 50 “non-core” fuel outlets, mainly in prime inner-city locations across the country, up for sale for an estimated $240 million. But the Canadian bid has cemented suspicions in the market that the service station IPO was a defensive tactic by Caltex, which has been under pressure to unlock value from its portfolio, including its $834 million pile of franking credits.

Fintech payments juggernaut Afterpay breached anti-money laundering laws because it initially received bad legal advice about how to comply with an unnamed law firm, an independent audit has found. The audit found Afterpay was in breach because an unnamed top-tier law firm incorrectly decided the buy-now, pay-later company was not providing loans to consumers but providing “factoring” or financing services to merchants. The ‘incorrect’ designation meant Afterpay’s anti-money laundering controls focused on merchants selling goods, rather than the individual consumers that used Afterpay to finance and pay for goods.

And that’s it for this week. And next week, I’ll be interviewing Stefan Rust, CEO of Bitcoin.com. And I’ll be talking to Rabobank economist Michael Every on how the prospect of a meaningful US-China trade deal is looking less and less likely.

And of course, I’ll be bringing you all the week’s news. In the meantime, you can find me on Twitter at talkingbizz, on Facebook and on LinkedIn. And if you want, leave a comment. Have a great week, take care, be good and looking forward to bringing you Talking Business next week.