Analysis of Fox sacking Tucker Carlson, one week after the settlement with Dominion.
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.
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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 13 in our series for 2023 and today’s date is Friday April 28.
First, I’ll be talking to Tammy Kassiou, founder and chair of Philotimo which is an international business operating in Timor-Leste which runs IMS – International Mobility Solutions, a job placement organisation and ISAT – Industry Safety Assessment and Training, a training organisation. And I’ll be talking to AMP Capital chief economist Shane Oliver.
But now, let’s talk to Tammy Kassiou.
So what’s happening in the news.
Fox News Media has sacked its top-rated host Tucker Carlson less than a week after parent company Fox Corp for $787.5 million a defamation lawsuit in which Carlson played a starring role. Carlson was fired a week after Fox settled a defamation lawsuit brought by Dominion Voting Systems in which his private texts were publicly released. The messages showed Carlson being occasionally critical of Fox management and using misogynistic language. The network is also facing legal action from Abby Grossberg, a former booker for Carlson’s show, who alleged she faced a sexist and hostile work environment. Fox is contesting her allegations, while Carlson has not publicly commented on the suit. The outspoken Carlson embraced conservative issues and delivered his views with a style that made his prime-time show, “Tucker Carlson Tonight”, the highest-rated cable news program in the key 25-to-54 age demographic on the most-watched U.S. cable news network. Shares of Fox closed 2.9% lower on the news, which the company announced on Monday. Dominion Voting Systems alleged in its lawsuit that Carlson allowed debunked election-fraud claims about the voting-technology firm to air on his show, while casting doubts on the plausibility of those claims in private messages that emerged in legal filings. Carlson is also key to additional legal battles facing Fox, including a lawsuit filed by Grossberg, who said Fox coerced her testimony in the Dominion case. Grossberg last month accused network lawyers of pressuring her to provide misleading testimony and said Fox exposed her and others to rampant sexism and misogyny. Fox fired Grossberg, saying her legal claims were “riddled with false allegations against Fox and our employees.”
Well Elon Musk’s wealth has plunged by $13 billion as the drama of Tesla’s first-quarter results, sending the electric-car maker’s shares down sharply and an experimental Starship rocket designed by SpaceX achieved liftoff in Boca Chica, Texas, only to explode about four minutes later in a fiery ball above the Gulf of Mexico. And on Twitter, as Musk promised weeks ago, many users lost their legacy blue checkmarks for choosing not to pay $8 per month for the privilege. When it comes to the billionaire’s net worth, Tesla’s sinking share price had the most immediate consequences. His wealth dropped by $12.6 billion as a result, according to the Bloomberg Billionaire’s Index, his biggest decline this year. His stake in Tesla, including shares and options, makes up the biggest part of his $163.9 billion fortune, though SpaceX has become more important as its valuation soars.
Confusion surrounding Twitter deepened over the weekend after a number of high-profile accounts saw their prized blue check-marks reinstated — even though some of their owners have been dead for years. Celebrities and public figures took to the platform to deny having paid the $8 a month that yields the colored tick, despite labels stating the “account is verified because they are subscribed to Twitter Blue and verified their phone number.” Unpaid, legacy blue ticks — which once conferred authenticity on accounts verified by the company — were removed last week as part of billionaire owner Elon Musk’s push to boost revenue. More bewilderment was in store after people noticed that dead personalities’ accounts also sported the label, such as celebrity chef Anthony Bourdain and National Basketball Association player Kobe Bryant. Bourdain died in 2018 and Bryant in 2020. Others were angered by the addition of blue ticks for profiles of people such as prominent journalist and columnist Jamal Khashoggi, who was murdered in 2018. The account of former Japanese prime minister Shinzo Abe, who was assassinated last year, also received the verified label. None of the profiles appeared to be active. Other deceased celebrities’ accounts that sported the blue ticks included singer Michael Jackson, comic book artist Stan Lee and actor Chadwick Boseman, although those accounts have been actively managed by others on their behalf.
Central bankers who manage trillions in foreign exchange reserves are loading up on gold as geopolitical tensions including the war in Ukraine force them to rethink their investment strategies. An annual poll of 83 central banks, which manage a combined $7tn in foreign exchange assets, found that more than two-thirds of respondents thought their peers would increase their gold holdings in 2023. Bullion tends to become more attractive in times of instability, and demand has soared over the past year. The amount of gold bought by central banks rose by 152% year on year in 2022 to 1,136 tonnes, according to the World Gold Council, a trade body. Most reserve managers surveyed rated geopolitical risk as one of their most important concerns — second only to high inflation — according to the HSBC Reserve Management Trends Survey published by Central Banking Publications. More than 40% of respondents listed it as one of their top risk factors, compared with 23% in last year’s poll. Around a third of those polled had changed, or were planning to change, the assets they purchase owing to tensions such as Russia’s invasion of Ukraine and worsening US-China relations.
Australia’s inflation rate has fallen from its December peak, with annual price increases of 7% for the year to March, down from 7.8%. Prices rose 1.4% over the March quarter, which was marginally above average economist forecasts, but the smallest quarterly rise in more than a year, according to the Australian Bureau of Statistics.
Four federal Labor MPs have broken ranks to join calls for the government to increase the JobSeeker payment by $24 billlion at next month’s federal budget. The move came as the government hinted it may increase the $50-a-day payment by a little in the May 9 budget, but not to the levels demanded by the welfare sector. The Labor MPs – Alicia Payne, Louise Miller-Frost, Michelle Ananda-Rajah and Kate Thwaites – have added their names to a letter composed by the welfare lobby and independent senator David Pocock that has so far garnered more than 330 signatures and which will be sent to Prime Minster Anthony Albanese. It comes a week after Treasurer Jim Chalmers rejected the key recommendation from the government’s handpicked Economic Inclusion Advisory Group that JobSeeker be increased to 90% of the age pension, up from about 70%. A single person on JobSeeker receives up to $347 a week, or $49.50 a day, while a single pensioner gets about $500 a week.
News Corp co-chairman Lachlan Murdoch’s battle against small news outlet Crikey is set to continue in a brewing dispute over an almost $600,000 pool of supporter funds after the media scion dropped his defamation litigation. At issue is the $588,735 that Crikey raised from its supporters to defend itself from the claim that Murdoch launched last year about an article branding the Murdoch family as “unindicted co-conspirators” in the 2021 riot at the US Capitol. The Murdoch camp believes the money should be deducted from its contribution to Crikey’s legal fees – which it will have to pay as the party that withdrew litigation – so that the website is not effectively compensated for the same expenses twice. But Crikey wants the money to be disregarded by the court as it works out what Murdoch will have to pay. Crikey promised on its online GoFundMe page that any surplus it receives from the case, including from supporters or a costs order, would go towards the not-for-profit Alliance for Journalists’ Freedom. The fundraiser is explicit that the money is to fight Murdoch’s legal claim, not to reduce his expenses. Crikey’s legal costs totalled more than $1 million.
Almost none of the new and current Reserve Bank of Australia board members have the typical qualifications required to serve on a foreign central bank or to set interest rates, according to economists and former bank officials. The first independent review into the RBA in decades has recommended splitting the RBA board into two separate boards, one focused on interest rate setting and the other tasked with governance. Jonathan Kearns, who worked at the RBA for more than two decades before departing to take up a job as chief economist at Challenger in January, said the existing board members were all “exceptionally well-qualified individuals who have great experience in running complex organisations”. .But he said but they don’t have the skills of monetary policy committee members in other central banks. Treasurer Jim Chalmers has given in-principle support to all 51 of the review panel’s recommendations. The creation of a monetary policy board would bring the RBA in line with central banks overseas and deal with criticisms identified by the review that the current board lacked the knowledge to “sufficiently scrutinise of challenge the RBA’s underlying economic and financial judgements or policy advice”.
Tech giant Atlassian says it is re-evaluating its global real estate footprint as a consequence of doubling down on its Team Anywhere remote work policy, which is increasingly making the company an outlier as other firms including Salesforce, Amazon and Google begin mandating a return to the office. Work began last year on Atlassian’s new Sydney headquarters, a 39-storey behemoth that is to be the world’s tallest hybrid timber tower, anchoring the NSW government’s planned Tech Central precinct next to the city’s Central Station. While work on the new HQ is progressing, the Team Anywhere policy means some 40% of its workers are now located two hours or more from an Atlassian office and work fully remotely, despite a growing number of companies walking back their remote work policies initiated amid the pandemic. Speaking in interviews at Atlassian’s Team 23 conference in Las Vegas, in which the company made several AI and product announcements, executives said they were committed to the Team Anywhere policy but that it would require a real estate rethink including the potential closure or reduction of some offices. Atlassian is domiciled in Delaware but has offices in Sydney, San Francisco, Austin, Boston, New York, Bengaluru, Yokohama and Amsterdam among others.
Australia is playing a key role in boosting the global supply of semiconductors, with the world’s biggest auto parts supplier tapping researchers at a Melbourne university to develop technology to increase output. Car manufacturers have been forced to cancel millions of orders of new vehicles after the year-long war in Ukraine exacerbated an already tight market for semiconductors, which are known as the “motor that drives the modern world of technology”. This equated to about $US210bn ($313.81bn) in lost sales. The chips are used in countless products, from Hyundais and Mercedes Benzes to hi-tech sleep apnoea machines and toasters – becoming as central to the global economy as oil. Demand is set to continue to soar as more countries mandate the use of electric vehicles – with US President Joe Biden setting a goal for EVs to account for half of all new car sales by 2030 – placing further pressure on supply chains. Bosch, the world’s biggest auto parts supplier, is investing more than €3bn ($4.97bn) into making more semiconductors, and has turned to researchers at Monash University in Melbourne’s southeast to help make the chips not only easier to produce but also more environmentally friendly.
The Albanese government will spend billions of dollars to urgently build factories for the local production of American-designed missiles, as part of the Defence Force’s biggest shake-up in decades, to deter conflict with a rapidly militarising China. The navy’s strike power is also tipped to be significantly expanded and procurement processes for buying new weapons overhauled with more off-the-shelf purchases when the government releases its response to the Defence Strategic Review on Monday. With military spending poised to surge well past 2% of gross domestic product, local industries fear they will miss out on work because major foreign – mostly American – defence prime contractors will be favoured as the government moves to buy weapons more quickly. One of the key moves by the government will be the fast-tracking of local production for a suite of missiles for the army, air force and navy. While Australia will initially source missiles from overseas to build up stockpiles, US contractors Lockheed Martin and Raytheon are in line to receive billions of dollars to establish domestic assembly plants. Those factories would become the long-term supplier of missiles for the Australian Defence Force as part of a shift to greater self-reliance. Crucially from a US perspective, Australian-made missiles would become a source of secondary supply for the American military, which is suffering from production bottlenecks and supply chain shortages.
The architect of Australia’s news bargaining code, which has moved more than $200 million from Google and Facebook to publishers of journalism, says artificial intelligence models such as ChatGPT should similarly be forced to pay for access to content. Rod Sims, the former chairman of the Australian Competition and Consumer Commission, says it’s likely large AI models such as Google’s Bard and Microsoft-linked ChatGPT have scraped news publications to generate accurate answers. That raises major copyright red flags, Mr Sims says, and puts them squarely in line for designation under the bargaining code. Robert Thomson, the chief executive of News Corp, which publishes The Wall Street Journal, The Australian and The Times, has been the most proactive in calling for AI firms to pay for access to content. He has confirmed News is in discussions with one unnamed AI firm. Mr Thomson was also an early proponent of the media bargaining code. Other publishers are exploring different ways to negotiate with AI firms. The Guardian has created a global AI working group, while Nine, the publisher of The Australian Financial Review, The Age and Sydney Morning Herald is understood to be looking into how AI can be applied across other areas of a media business.
A new artificial intelligence (AI) system which estimates energy efficiency in Australian homes is being trialled by Australia’s national science agency CSIRO and property data analytics company CoreLogic Australia. The CSIRO and CoreLogic say that understanding the energy efficiency of homes can help the industry and homeowners to improve energy performance and lower power bills – but before the trial, data on the energy efficiency of homes was limited or not readily accessible. The pilot project combines CoreLogic’s 40 years of comprehensive property data with CSIRO’s RapidRate artificial intelligence model to produce an estimate of heating and cooling load, and an energy efficiency star rating for homes. The CSIRO says the insights from RapidRate will initially be made available to CoreLogic’s core banking and finance customers, with plans to make it available to other market segments in the future
KPMG Australia has begun using an enhanced version of its auditing software on local clients which can search for outlier transactions within a complete dataset during an audit. The capability, already in use by the firm in the US, UK and Canada, allows KPMG’s auditors a faster analysis of more client data and should improve audit quality, which is critical to investors who rely on financial statements to make decisions. The enhancements to KPMG’s audit software, called KPMG Clara, uses aspects of artificial intelligence in its operation, such as machine learning, to work out what constitutes a normal transaction within a dataset. This use of advanced technology comes after the corporate regulator last October called for KPMG and its big four rival Deloitte to take immediate action to improve their audit processes after it found their standard of audit work had declined dramatically in the previous year. It is also part of an ongoing trend within the world’s largest accounting firms and will have long-term implications for the usefulness of audits as well as the professionals who work within the audit sector.
Department store Myer is facing an unfair dismissal suit from a former womenswear category manager, who is accusing her boss of bullying behaviour and is seeking damages of more than $700,000. Former Myer staffer Patricia Priolo has made the claims under the Fair Work Act, alleging she was dismissed in contravention of general protection. Ms Priolo’s career at the department store spanned from October 21, 2019 to January 31 this year. She was initially a category manager in womenswear. By July 2020, she was elevated to category manager for womenswear, footwear and accessories, and reported to Annabel Talbot, general manager of merchandise for womenswear, beauty, intimates and accessories, according to the statement of claim lodged in the Federal Court in Victoria. It is alleged that last November, at a meeting to discuss the Myer womenswear strategy, which about 30 people attended in person and via video conferencing, Ms Talbot caused offence and distress to Ms Priolo and others. By the end of January, Ms Priolo’s employment at Myer was terminated on alleged redundancy grounds, despite her role not being redundant, and another employee being placed into that position shortly after. Her lawyers have a claim exceeding $708,060, which includes the loss of earnings and lost opportunity to receive short-term incentives as well as damages for pain, suffering, stress and anxiety of at least $50,000. Ms Talbot remains in her role at Myer.
And that’s it for this week. And next week, I’ll be talking to Dr Philip Wuth who runs Australia’s only doctor led weight loss program, who is concerned about how much weight people gained during COVID and warns the business of weight gain needs to be taken seriously ahead of the next pandemic. And I’ll be talking to Rabobank economist Michael Every about whether China’s economy is actually recovering.
In the meantime you can catch me on Facebook, Twitter, Instagram, LinkedIn and YouTube. And if you want leave a comment. For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business on the Apple podcast store or on my website leongettler.com.
If you want to contact me, email me at [email protected]. I answer all emails.
Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week