Talking Business April 16 2021

Travel Bans: Restrictions on international travel are likely to remain until 2024, warns Deloitte Access Economics



Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast app, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at

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 11 in our series for 2021 and today’s date is Friday April 16.

First, I’ll be talking to Dale Garvie, managing director of FirmDecisions, the largest independent global marketing contract compliance specialist, providing advertisers with transparency into their marketing and media agencies, incorporating creative, media, digital, events, point of sale, or direct marketing BTL agencies. And I’ll be talking to AMP Capital chief economist Shane Oliver about how the market has performed in the first quarter.

But now, let’s talk to Dale Garvie.









The world should be preparing for COVID-22 and COVID-24, and a stop-start economy, because coronavirus variants are popping up fast and vaccines cannot keep up, says the chief executive of Ansell. Magnus Nicolin, who runs the $5 billion surgical gloves and protective suits manufacturer said it was planning for higher demand for its medical gloves and protective medical suits for several years because the pandemic would keep rolling on. The knock-on effects to economies and the way people go about their lives will be with us for an extended period, he said. The company has a workforce of 13,500 people across factories in countries such as Malaysia, Sri Lanka, Thailand, Vietnam, Portugal, Brazil and China. It is bringing on eight new production lines in the June half to keep up with the strong demand. It already added an extra five production lines in the six months ended December 31.

Businesses across the country have reported that the strongest operating conditions on record have started to lift labour and input costs, which the Reserve Bank has said is key to the timing of higher interest rates. The NAB Business Survey, watched closely by the RBA, showed all key measures, including employment, forward orders, profitability and trading shot to new highs in March even as major government financial supports such as JobKeeper started winding down. The business conditions index rose 8 points to 25 points, the highest level reached in the survey, which began in 1996. The employment index skyrocketed from 9 points in February to 16 points in March. The growth in payrolls has also moved 1% higher than the pre-pandemic level after increasing 0.8% in the four weeks to March 27, a day before JobKeeper was cut.

The Westpac-Melbourne Institute Index of Consumer Sentiment increased by 6.2% to 118.8 in April from 111.8 in March, an 11 year high.

Deloitte Access Economics economist Chris Richardson has warned international travel for Australians is likely to remain restrictive until 2024. The Deloitte Access Economics partner in his quarterly business outlook said he expects international borders will re-open only gradually. For Australia, there will be some sort of quarantine remaining for incoming travellers for some time. He said international travel – both inbound and outbound – pretty weak in 2022, and it may not return to pre-pandemic levels until 2024

The cost of the government’s delay in rolling out the COVID-19 vaccine to the Australian population is likely to exceed $1.4 billion on even the most optimistic of scenarios, according to new modelling by the McKell Institute. The Morrison Government’s initial COVID-19 Vaccine Roadmap plan would have reached the earliest possible measure of herd immunity (65% vaccination rate) by August 2021. But delays have now blown this date out, increasing the chances of further lockouts and restrictions   According to the new report, “Counting the cost of Australia’s delayed vaccine roll-out”, even if Australia instantly picks up it vaccination rollout rate to that of the UK – currently the second-best performer in the world – it would delay herd immunity by 116 days from the Morrison Government’s original projection. The report puts the “conservative” cost of locking down a capital city at $123 million per day, and depending what vaccination rate Australia can ramp up to (and bearing in mind this was put together before last week’s timeline upset) cities are expected to face between 3 and 34 more days of lockdown, with costs of up to $4 billion per week.


Bank branches have been closing across Australia at their fastest rate in two decades as the pandemic pushed more customers toward digital banking.  Since COVID-19 struck in early 2020 there have been more than 290 permanent shutdowns completed or scheduled, according to bank figures and Finance Sector Union data. Temporary COVID-related closures of some bank branches are continuing, and hundreds of ATMs have disappeared in a “real blow to communities”, the union says. Since the start of last year, banks have informed the Finance Sector Union of 298 branch closures, with Victoria and NSW the hardest hit, each recording 97 closures. The ANZ has closed or earmarked the closure of the most branches, 131, followed by Westpac, 53, the NAB, 45, and the Commonwealth Bank, 32. The recent mass closure of branches has left some communities, such as Mortlake in western Victoria, with no bank. National Seniors Australia chief advocate Ian Henschke said more than 2.5 million Australians did not have the internet, and banks had a social responsibility to provide branch services. He likened the closure of branches to a “form of institutionalised elder abuse”.

New Treasury analysis shows the economy grew by $7.5 billion in the December quarter alone due to people holidaying at home and spending their money here rather than abroad, as the government said the vaccine setback should not damage its budget projections. The boost, equivalent to about 1.5% of GDP for the quarter, shows domestic spending more than offset the impact of the severe restrictions on international borders and the effect these had on international tourism and other dependent sectors. With the budget certain to contain projections more optimistic than those released in the December mid-year update, Deutsche Bank said the deficit – forecast in December to be $198 billion – could be erased in four years.

Employers are still struggling to find staff despite an expected jump in applications following the end of JobKeeper. Businesses say part of the blame lies with the closed international borders, which have left a gap where foreign workers would normally step in.0 Australia’s unemployment rate is better than expected and job ads have hit a 12-year high. Despite this, more than 370,000 businesses were subscribed to the wage subsidy before it ended on March 31. One industry expert said it was not just hospitality and tourism, but employers were also struggling to find staff in IT, construction and engineering roles.

The supply of registered financial advisers is on track to be 50% lower than before the Hayne royal commission in 2018, while the costs of quality advice for regular consumers have skyrocketed, new data shows. The data from research house Adviser Ratings confirms the dire state of Australia’s financial advice industry two years after it was eviscerated by the royal commission. A total of 2837 financial advisers exited the industry last year, according to analysis of ASIC data by Adviser Ratings, taking the number of individuals licensed to provide advice to a new low of 20,674 at December. The 12% annual decline in the adviser workforce has led Adviser Ratings to downgrade its forecasts for coming years, outlined in its landmark annual industry report. The researcher now expects adviser numbers to “conservatively” drop to 16,986 by the end of 2021 and 13,000 by the end of 2023, well below its initial estimate of 15,000. That would represent a 53% decline on the peak of 2018 before the scathing Hayne royal commission and commencement of the Morrison government’s controversial adviser education reforms.

Seven West Media – a listed company of which the Stokes family is a majority shareholder – lent shareholder money to Mr Roberts-Smith. $1.87 million of Seven West Media funds was lent to executive Ben Roberts-Smith to fight war crime allegations. A secret agreement, signed by Kerry Stokes’ son Ryan, reveals the shareholder funds were lent to pay Mr Roberts-Smith’s private legal expenses, including for top barristers to contest the grave accusations the ex-soldier faced before Australia’s military watchdog. Last June the loan from the listed company was paid by the Stokes family’s private company, ACE, with Kerry and Ryan Stokes agreeing to continue funding the accused war criminal privately because of the “unfairness of your [Mr Roberts-Smith’s] treatment” by the military Inspector-General. Under Australian corporate law, the resources of a public company must only be used in the best interests of the shareholders of the company as a whole. Mr Roberts-Smith is the Queensland manager of Seven West Media, but his fight against the Inspector-General’s inquiry into war crime allegations has little obvious connection to the business of his employer.



Uber Eats delivery riders in Sydney earn less than the casual minimum wage during peak meal times, a NSW Upper House inquiry has heard.The Select Committee on Job Security has opened with the first of its public hearings into the gig economy, hearing from representatives of Uber, Uber Eats, Ola and Deliveroo. In its submission to the committee, Uber said its Uber Eats delivery riders earned $21.55 per hour in Sydney through the app over peak meal times. The amount earned by riders was raised by committee chair Tony Sheldon to Uber Eats general manager Matthew Denman. However, in its submission, Uber said more than 98% of drivers and delivery people earned at least the minimum wage after costs, when measured over a fortnight and during the time a trip or delivery was accepted to when it was completed.

Food delivery giant Menulog has broken with the gig economy industry and declared it will be the first to give many of its couriers rights to a minimum wage and superannuation contributions by directly employing them. In a move that is a major shift away from the independent contractor model popular in the gig economy, the company’s managing director Morten Belling told a Senate inquiry on Monday the business would start a pilot employment program for couriers around Sydney’s CBD. Industry leaders Uber and Deliveroo have come under pressure from Labor and unions because the existing contractor model allows companies to pay less than industry minimum wages, though it permits workers to pick when they work. Mr Belling revealed to an inquiry examining job security in the gig economy that the contractor model had suited the local market but it was now apparent there had to be improvements to the working conditions of couriers — even if it cost more. Mr Belling said he could not see any reason why other delivery companies could not follow Menulog’s lead. Menulog will begin by increasing insurance cover and examining ways to create a pool that money riders can draw on for sick leave and holidays. It will also start a trial of employing riders directly in the Sydney CBD and open negotiations with the Transport Workers Union over industry pay rules. Menulog believes current rules mandating minimum shift times for employees could stifle the flexibility its couriers enjoy.

Coca-Cola Amatil has joined the global RE100 renewable energy initiative, committing to use 100% renewable energy in six countries by 2030 as part of its net zero by 2040 pledge. The ASX-listed company’s operations in Indonesia, Fiji, Samoa and Papua New Guinea will all be powered by renewables by the end of the decade and by 2025 in Australia and New Zealand. The $9.75 billion drinks giant has already completed stage one of its West Cikarang solar project and plans to expand its solar program to several manufacturing facilities throughout Indonesia, in Medan, Semarang and Surabaya.

Australia’s corporate regulator has revealed it is investigating how Greensill Capital – a company once valued as high a $7bn with hopes of listing on the ASX – collapsed into insolvency last month.  In response to parliamentary questioning, the Australian Securities and Investments Commission said it was seeking a full picture of how Greensill fell into administration and how it has reverberated across Australian businesses and investors. ASIC’s response to questions from the Parliamentary Joint Committee on Corporations and Financial Services also revealed the regulator had been in contact with European regulators and what action they are taking following the collapse of Greensill’s UK arm and German-based bank. Greensill filed for insolvency last month after it failed to strike a deal to renew its policies with its insurers and Credit Suisse froze $US10bn of investment funds, which Greensill relied on for buying the debt securities it issued. The work ASIC is doing to understand how Greensill collapsed comes on top of the regulator “working in lock-step with APRA”, to gain a greater insight around the exposure of Australian insurers to Greensill. It is also looking at financier spruiking a $US600m ($787m) pre-IPO capital raising last December which was quickly abandoned. The unpicking of what went wrong at Greensill comes after it was revealed the financier’s founder Lex Greensill told staff three weeks before the group’s collapse that it had access to “enormous amounts of liquidity” and close to striking a new insurance policy, thanks to “our friends at Marsh and Chubb”.

Private equity giant Blackstone has offered to take on Crown Resorts’ regulatory headaches and accelerate its proposed takeover of the casino operator. Blackstone reckons it can have a binding $11.85 a share bid on the table by August, after making an important change to regulatory conditions attached to its indicative offer. Blackstone wrote to Crown to say it was willing to take on the casino group’s regulatory risks. So long as Blackstone can gain regulatory approvals to own 100% of Crown from three state-based gaming authorities, and provided Crown is not stripped of its licences in the meantime, it will proceed with its bid. In effect, Blackstone is saying that it doesn’t matter what plays out in Victoria or Western Australia where royal commissions are underway, or what findings are made against Crown in its present form. Its bid’s regulatory condition is now about what’s happening in its own camp, not Crown’s. The underlying message is that Blackstone is confident it can pass probity with the the regulators, given its track record as an asset manager globally.

Jack Dorsey’s payments company, Square, will launch business loans in Australia this quarter as the speed of the COVID-19 recovery creates a magnet for new data-driven competitors to the major banks. Square, which supplies small, white payment dongles for small businesses to accept card payments, has earmarked Australia as its first international expansion market for SME lending outside its native United States. Square, whose market capitalisation on the New York Stock Exchange is the same as Commonwealth Bank’s on the ASX, has been growing SME customers in Australia by 92% a year since launching payments acceptance hardware five years ago. It will now use the data generated by the terminals, which is fed into Square software, to assess SME risk and provide select customers with offers for working capital. Loans will be made for a fixed fee, not an annual interest rate. Many small businesses are not willing to provide security such as the family home and find application processes cumbersome. Square’s loans will involve three clicks and no paperwork




And that’s it for this week. And next week, I’ll be talking to Aaron Applebaum, a Partner at Israeli start-up MizMaa Ventures which identifies the best companies and entrepreneurs in Israel and helps them succeed in the global marketplace. And I’ll be talking to Indeed economist Callam Pickering about Australian’s latest unemployment figures.

In the meantime you can catch me on Facebook, Twitter and LinkedIn. And if you want leave a comment. Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week.