Outgoing Woolworths boss Brad Banducci was threatened with six months in jail for contempt of the Senate after he refused to directly answer questions about a profit metric, in a fiery Greens-led Senate hearing that went off the rails on Tuesday. Greens are accused of grandstanding instead of focusing on cost of living.





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 or at Banking Day.

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 12 in our series for 2024 and today’s date is Friday April 19.

First, I’ll be talking to I’ll be talking to Justin Seskin CEO and Co-Founder of The DOMAustralia’s newest online retail outlet.  Justin is particularly poised to speak about how more young Aussies are turning to outlet shopping to reduce both landfill waste and price point.


And I’ll be talking to EY economist Cherelle Murphy about Australia’s lates inflation figures.


But first, let’s talk to Justin Seskin.

So what’s happening in the news?

The International Monetary Fund has slightly upgraded its global economic growth forecast but warned about progress on inflation on the back of conflicts in the Middle East and Europe. Global growth 2024 is expected to rise by 3.2% in the April world economic outlook, 0.1 percentage points higher than in the previous update in January. While low by historical standards, the global growth forecasts for 2024 has been revised up 0.3 percentage points since October 2023. IMF chief economist Pierre-Olivier Gourinchas said most indicators point to a soft landing but stalled progress towards inflation targets are among risk factors with stubbornly high services inflation. Other risk factors include possibility of further trade restrictions on Chinese exports, rising oil prices, the possibility of the conflict between Israel and Hamas in Gaza spreading into the wider region creating further commodity price spikes, along with attacks in the Red Sea and the ongoing war in Ukraine. “Bringing inflation back to target should remain the priority,” Mr Gourinchas said. “While inflation trends are encouraging, we are not there yet.” Other downside risks to the outlook include China’s troubled property sector, which could lead to ongoing economic weakness and pain for trading partners such as Australia. The IMF expects the Chinese economy to slow from 5.2% in 2023 to 4.6% in 2024 and 4.1% in 2025. Yet the financial institution views the risks to the global outlook as “broadly balanced”, with upside possibilities including inflation falling faster than expected as jobs market participation keeps growing, allowing central banks to start cutting interest rates sooner. Economic predictions for Australia are little changed from the previous update, with the IMF forecasting a 1.5% rise in GDP in 2024 and 2% in 2025. In January, the nation’s economy is expected to expand 1.4% in 2024 and 2.1% in 2025. The IMF forecasts Australia’s inflation to be at 3.5% in 2024 and back to 3% – the top of the Reserve Bank of Australia’s target range – by 2025.

Tesla is slashing headcount by more than 10%, part of a global retrenchment extending all the way into its executive ranks as the carmaker struggles with slowing demand for electric vehicles. Chief Executive Officer Elon Musk revealed the job cuts in an email to staff, citing duplication of roles and the need to reduce costs. If the dismissals apply companywide, they would amount to more than 14,000 employees. Tesla reported vehicle deliveries early this month that missed expectations by a wide margin, posting its first quarterly decline in four years. Several analysts are bracing for the EV maker’s sales to potentially shrink for the year, citing slow output of its newest model — the Cybertruck — and a lull in new products until the company starts producing a next-generation vehicle late next year. “As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk wrote in the memo. “As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done.” In its most recent major workforce reduction, Tesla cut  about 10% of salaried workers in mid-2022. The EV slowdown Tesla has felt of late has been widespread. China’s BYD delivered just over 300,000 battery-electric vehicles in the first quarter, down 43% from the final three months of last year, when it briefly pulled ahead as the world’s top EV seller. Manufacturers including Volkswagen AG, General Motors and Ford have delayed, dialled back or altogether scrapped EV projects as consumers balk at still-high prices and a lack of charging stations.

Outgoing Woolworths boss Brad Banducci was threatened with six months in jail for contempt of the Senate after he refused to directly answer questions about a profit metric, in a fiery Senate hearing that went off the rails on Tuesday. Mr Banducci declined to confirm if the supermarket giant’s return on equity was 26%, twice that of the big banks but similar to miners, saying it was not the best way to measure the profits of supermarkets. The retailers, like the big miners, argue that other metrics such as return on capital are a better indicator of how profitable the business is. He said the supermarket chain’s focus was return on investment, the return for each dollar put into the business, which was a common corporate finance measure. Mr Banducci said the nation’s largest grocery chain made a 10% return on investment, in line with the average for the Australian sharemarket. Greens Senator Nick McKim said a first-year commerce student could calculate Woolworths’ return on equity, accusing Woolworths of “making off like bandits”, and threatened the CEO with contempt and a prison term for not answering questions more directly. Mr Banducci said he would take the question on notice after a lengthy confrontation, when he confirmed that he didn’t know the number. Mr Banducci, who hands over to Amanda Bardwell in September, said he disagreed with Senator McKim, citing competition from discount chain Aldi, pharmacy retailer Chemist Warehouse, Wesfarmers-backed Bunnings and US giant Amazon. “I would respectfully submit that this is an incredibly competitive market, and that is good for consumers,” he told the Greens-led inquiry. Coles boss Leah Weckert, appearing after Mr Banducci, came out quickly revealing that the company made just over $1 billion net profit last financial year, and achieved 31% return on equity. Coles had a 15% return on capital last year, noting the metric is used for executive remuneration. Senator McKim also sparred with former Labor minister Dr Craig Emerson over his disclosure and connections with big business.  Dr Emerson, who the government tasked with probing the code governing supermarket relationships with their suppliers, has opposed a Greens-led push to threaten the big retailers with break-up if they abuse their market power. Senator McKim took issue with Dr Emerson being employed by Wesfarmers in 2015 which at the time owned Coles, and with the non-disclosure of his more recent role with the Business Council, where he advises on immigration policy. Opposition treasury spokesman Angus Taylor accused the Greens of “political grandstanding” and said the “focus of the Greens should be on getting prices down for consumers and fair deals for suppliers.” Liberal senator Dean Smith, who is participating in the inquiry, also slammed the Greens. “The Australian public has genuine questions over why they’re paying more at the checkout, but the Greens and Senator McKim seem more interested in grandstanding,” he said. “Instead of wasting the public’s time and Senate resources, they should be putting their energy into what we can do to fix Labor’s cost-of-living crisis.”

Leading defamation lawyers and academics say Bruce Lehrmann’s spectacular defamation defeat will make high-profile litigants think twice before rushing to court to redeem their reputations. In a case described as an “omnishambles” by the Federal Court’s Justice Michael Lee, Mr Lehrmann was effectively found to be a rapist and a liar and may face a crushing costs order arising from his legal gamble. The verdict is the second within a year to chip away at Australia’s reputation as the world’s defamation capital, after Ben Roberts-Smith emerged from his own libel claim tarred as a war criminal and murderer. Speaking outside the Federal Court on Monday, Ten’s solicitor, Justin Quill, a partner at Thomson Geer, said the ruling served as “a clear warning to potential plaintiffs who might want to try and reinvent history or make a quick buck”. Filings in the Federal Court – the preferred forum for defamation claims have fallen, at the same time as a number of high-profile litigants have suffered losses and had embarrassing and damaging claims against them aired in open court. According to statistics published in Australian Defamation Law and Practice, the number of defamation trials in Australia dropped from a peak of 31 in 2021 to 20 last year following the introduction of a new serious harm test and public interest defence. The new laws have not been adopted in Western Australia and the Northern Territory. Defamation lawyer and Gadens partner Marina Olsen said the Lehrmann case was the latest in a series of “spectacular own goals” by defamation litigants, such as Craig McLachlan and Ben Roberts-Smith, whose compulsion to seek vindication can occasionally backfire spectacularly. “It’s another example of public figures who find themselves in the press for all the wrong reasons thinking (wrongly) that going to court to get a defamation judgment will be a good idea,” she said As Justice Lee noted in his judgment, Mr Lehrmann has not been convicted of a crime but, through his own civil claim has now been found “to have engaged in a great wrong” by raping Brittany Higgins in a Parliament House office in 2019. “Having escaped the lion’s den, Mr Lehrmann made the mistake of going back for his hat,” Justice Lee said.  Justice Lee said the former political staffer would have only been entitled to $20,000 in damages – only a fraction of the legal fees accumulated in the trial. Peter Bartlett, former chairman of MinterEllison, said he expected litigants to think twice before seeking reputational rehabilitation in open court after the Lehrmann saga. “It’s very easy to issue proceedings for defamation, but it’s like grabbing a tiger by the tail – easy to grab a hold of at first, but hard to let go of without being bitten,” he said. “Those thinking of suing for defamation should recognise that you cannot anticipate what evidence will come out in trial. Often, damaging material raised in court can receive far more publicity than the original publication.” Sydney University media law professor David Rolph said that while the Roberts-Smith and Lehrmann trials were atypical cases, the results would “give pause” to public figures contemplating defamation action. The number of high-profile defamation cases would likely continue to fall in the next few years, he said, as plaintiffs assessed the financial cost and legal effect of new uniform laws.

Star Entertainment’s chairman and former chief executive privately schemed to wage war on the casino regulator and considered engaging shareholders in a class action against a NSW government-appointed manager. Nick Weeks, special manager of Star Sydney, alleged to an inquiry called by the Independent Casino Commission in NSW that the ASX-listed gaming group was also “bulk approving” high-risk customers when it was meant to check the source of their wealth, and even falsifying documentation about welfare checks. Emails and text messages tendered to the inquiry between Robbie Cooke, who quit as chief executive last month and David Foster, the group’s chairman, show that Star executives knew about Mr Weeks’ schedule and investigated who he was meeting. The inquiry is being led by Adam Bell, SC, and was called by the state’s casino regulator in February. It is concerned Star has not done enough to overhaul the company’s culture. In one exchange in January, Mr Foster suggested the company try to remove Mr Weeks from his position. “If done right, it could be a catalyst to get rid of Weeks,” Mr Foster wrote in a message read by counsel assisting the inquiry, Caspar Conde. Mr Foster also proposed a different option to Mr Cooke: “Another angle is establishing grounds if possible for a class action from shareholders against [Weeks] and/or NICC.” Mr Weeks, who controls Star Sydney’s licence, was installed at the casino in October 2022 after the first inquiry. On Monday, he said he was surprised by the emails and messages sent by Mr Cooke and Mr Foster because he believed he had a “strong working relationship” with the board and executive. Star is one of two major casino operators in the country, alongside Crown Resorts, which was sold by billionaire businessman James Packer to Blackstone after similarly damning findings against the company in 2021. Star is backed by a number of wealthy investors, including publican Bruce Mathieson, who has taken a big position this year. Mr Bell’s first report in 2022 found Star was unsuitable to hold its licence, describing its operations as “a case study of unethical conduct and cultural failure” that may have evaded taxes and facilitated $900 million of banned gambling transactions. Over four months, his inquiry revealed Star hid criminal gang-linked junket operator Suncity’s illegal cash cage and allowed it to operate a secret gambling room,  The hearing on Monday began to shed light on newer failings at the Sydney operation, including what was described by Mr Weeks as a “deliberate falsification of records”. Mr Weeks was referring to an ongoing investigation that has found Star staff members are not interacting with patrons who gambled on a slot machine for at least three hours, despite records claiming they had done so.

Millions of workers could soon have the right to double their annual leave by taking it at half pay as part of a new entitlement under consideration by the workplace umpire. The Australian Council of Trade Unions and employer groups are close to consensus on introducing the right into industry awards to give staff and firms greater flexibility to allow for paid time off. However, both sides are still apart on safeguards, with employers pushing for full discretion to refuse staff requests and unions arguing for refusals to be based on a reasonableness criteria. Australian Council of Trade Unions secretary Sally McManus said taking twice the leave at half pay could give workers “more time and flexibility to manage their caring responsibilities and balance work and care”. While the Fair Work Act contemplates allowing workers to take annual leave at half pay, few awards actually permit it. During the pandemic, the Commission introduced temporary rights for employees to take leave at half pay as a way to avoid them taking unpaid leave while sick, but the entitlements have since expired. Unions and employers are understood to have agreed that the right to request should rest with the employee rather than the employer. However, Australian Industry Group chief executive Innes Willox said it was critical such arrangements were by agreement given bosses could struggle to accommodate longer staff absences. Australian Chamber of Commerce and Industry workplace relations director Jess Tinsley said the amendment was “commonsense change”. However, she warned that giving workers a unilateral right to double their leave whenever they like “could have enormous ramifications on an employer, especially during a busy period or where they are short staffed”. The entitlement to take leave at half pay is different from policies on purchasing more leave, where employers allow workers to spread any pay reduction across the year in return for extra time off. The Fair Work Commission is considering award changes  to better suit work and care responsibilities, including a right to request work from home and expanding ordinary hours beyond 9-5 for remote workers.

Major Australian media companies reeling from the prospect of losing $300 million in advertising revenue from a government crackdown on gambling advertising now face an even more expensive blow from a possible ban on junk food ads. The groups representing the multi-billion dollar television industry and Australia’s biggest advertisers have slammed an early study that explored banning or significantly limiting “unhealthy food” promotion as lacking evidence and unfairly targeting marketing over other factors. Quick service restaurants alone – chains like McDonald’s and KFC – spent $382 million on advertising in 2023, industry data shows. Last year, the Albanese government funded a feasibility study by academics from the University of Wollongong on ways to restrict junk food advertising and packaging. Teal MPs had pushed the move for months. The study’s suggestions included government intervention to reduce fast food ads, restricting ads on TV between set times such as 5.30am and 11pm, or limiting unhealthy food marketing through “online media”. “Australian children’s dietary habits are sub-optimal,” the report’s authors wrote. “One priority strategy is to reduce children’s exposure to unhealthy food marketing, branding and sponsorships.” Unhealthy foods covers more than fast food. It is defined as foods and drinks “high in fat, salt and/or sugar and are not needed as part of a healthy diet”. Last month, the Australian Medical Association called for restrictions across all advertising, especially online.

The construction industry is dominating tax payment defaults, CreditorWatch says, as the number of Australian companies going into external administration hits a record high, with more than 1200 companies collapsing in March.  That figure, 1208 for the month, is 22.6% higher than the same month last year. CreditorWatch says with the chances of an interest-rate cut in the near future looking increasingly remote, the pressure on struggling businesses is expected to remain high. The credit analysis firm, which releases its Business Risk Index on Wednesday, said hospitality businesses were at the greatest risk of failure, with a 7.44% probability of collapsing in the next 12 months. It said the stubbornly high inflation figure in the US means that the likelihood of cash rate cuts in Australia 2024 is now looking remote and that this will have serious implications for the business community, considering that as recently as last month, there was strong expectation of at least one cut to the cash rate in 2024

And that’s it for this week. And next week, I’ll be talking to Tim Gaspar, Director at Hatch Financial Services. Tim has worked for 15 years as a mortgage broker and he knows exactly what’s going on in the market.

And I will talk to Indeed economist Callam Pickering about Australia’s latest unemployment figures.

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