Talking Business April 30 2021

CPA Australia last year grew its surplus, thanks in large part to $7.4 million in JobKeeper support from taxpayers.



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 13 in our series for 2021 and today’s date is Friday April 30.

First, I’ll be talking to Dean Foley Founder & CEO of Barayamal, Australia’s indigenous business accelerator and world leader in Indigenous entrepreneurship. We’ll be talking about the difference between western and indigenous entrepreneurship. And I’ll be talking to CommSec chief economist Craig James about what’s ahead in the market for the week.

But now, let’s talk to Dean Foley.





The European Commission has launched legal action against AstraZeneca for not respecting its contract for the supply of COVID-19 vaccines and for not having a “reliable” plan to ensure timely deliveries. AstraZeneca had committed to delivering 180m vaccine doses in the second quarter of this year But it later said it would only be able to deliver 70 million. In response, AstraZeneca said the legal action was without merit and pledged to defend itself strongly in court. Under the contract, the Anglo-Swedish company had committed to making its “best reasonable efforts” to deliver 180 million vaccine doses to the EU in the second quarter of this year, for a total of 300 million in the period from December to June. But AstraZeneca said in a statement on March 12 it would aim to deliver only one-third of that by the end of June, of which about 70 million would be in the second quarter. A week after that, the Commission sent a legal letter to the company in the first step of a formal procedure to resolve disputes.

Microsoft’s third-quarter sales rose 19%, lifted by robust demand for cloud-computing services and the strongest quarterly jump in personal computer shipments in more than two decades. As well as owning popular office software, the company has the Teams collaboration, chat and video application that has been widely used during the pandemic. Revenue in the period ended March 31 rose to $US41.7 billion, the Redmond, Washington-based software maker said on Tuesday (Wednesday AEST) in a statement. That compared with the $US41.1 billion average estimate of analysts polled by Bloomberg.



Australian exporters face growing scrutiny and financial costs under a potential US border adjustment scheme that Joe Biden has threatened to put at the centre of his fight against climate change. At last week’s 40-country climate summit hosted by Mr Biden, which heralded Washington’s emphatic return to global carbon policymaking with a bold pledge to cut greenhouse gas emissions by 50% to 52% by 2030, the administration also quietly sharpened its warning to laggards: failure to curb emissions means America will tax your exports. Washington’s hardening line on such imposts – which echo similar moves by the European union  – puts the Morrison government under renewed pressure to accelerate its shift towards adopting a policy of net zero emissions by 2050. The prospect of US efforts to influence laggards also threatens to create collateral damage across some of America’s closest and important allies in the Indo-Pacific, including India, Japan, Australia and South Korea. Trade Minister Dan Tehan – speaking from the Royal Australian Air Force VIP aircraft as it approached the West Australian coastline after holding trade talks in London and meeting with German officials on green steel – said the government had made clear to the US and Europe its concerns about border adjustment mechanisms.



In a new report released on Monday evening, the Blueprint Institute has called for a standard tax deduction of $3000 for any taxpayer that wants to use it. The deduction would cover work-related expenses and a range of other personal deductions, with Blueprint arguing this would give 80% of taxpayers an extra $400 to $1000 annually and “pave the way to eliminating 7-9 million tax returns per year”. Taxpayers who used the standard deduction would no longer have to submit an itemised list of deductions. Blueprint estimates this would cut annual compliance costs for Australians by $4 billion, save us $750 million a year in accounting and legal fees, and cost the annual budget less than $5 billion.

Crown Resorts has been slapped with a $1 million fine by Victoria’s gambling regulator over its failure to vet high-roller “junket” tour partners for criminal links and other probity issues. The Victorian Commission for Gambling and Liquor Regulation (VCGLR) said on Tuesday afternoon the fine was the maximum amount it could impose on the James Packer-backed casino group for failing to comply with its regulatory obligations.

Members of a Melbourne-based division of KPMG were dismissed and more women promoted into leadership positions following an investigation into annual “boys’ night out” events that featured binge drinking and other “f—ed up” behaviour, such as hiring strippers that were allegedly expensed to the firm. In addition to visiting strip clubs, attendees of the “boys’ night out”, held in the mid-2010s, described events where one staff member crawled through his own vomit on Swanston Street and another was picked up in an ambulance. The firm investigated the behaviour  in 2018 after being alerted to the 2015 “boy’s [sic] night out” after the invitation was sent to 80 male employees ranging from summer interns through to directors in the firm’s Private Enterprise division. The division provides a range of services to family-owned businesses, family offices and fast-growing companies. KPMG’s fired some of those involved, it put more women into leadership positions, and told partners and staff that “there is no tolerance for this behaviour” at the firm.

You’d have to expect nothing less from a bunch of accountants. Fresh on the heels of revelations that the ultra-exclusive Australia Club has received lucrative government subsidies, including JobKeeper, none other than CPA Australia, the governing body of more than 168,000 accountants, has revealed it is also sitting pretty thanks to government handouts. In the 12 months to December 31, the organisation, led by president and chairman Merran Kelsall, boosted its operating surplus before tax by more than 40% to $6.3m. That’s even as employee costs blew out by $10m and revenue dropped from $168m to $156m. As it turns out, even the group’s exorbitant enrolment fees weren’t enough for it to ride out the pandemic, calling on Josh Frydenberg’s treasury for $7.4m in JobKeeper payments over six months — without which the group would very much be deep in the red. Referencing the handouts in their KPMG-audited annual report, CPA said it was eligible under the initial scheme to September, but fell outside of the criteria for the first or second extensions.

The CSIRO’s technology and science investment fund Main Sequence raised $250 million to form a second fund to invest in emerging Australian “deep tech” and science-based start-ups, which it says demonstrate the potential to solve the world’s biggest problems. Main Sequence now has $490 million in funds under management, with major investors from its first fund, Horizons Ventures, Hostplus and Temasek returning for a second shot, alongside multi-family office operator Mutual Trust and Morgan Stanley Wealth Management. CSIRO chief executive Larry Marshall said Main Sequence was different from the many other Australian venture funds that had grown up markedly in recent years, in that it did not target typical digital or tech software start-ups. Rather its investments were either in existing companies or in creating new ones which fit into six pre-defined global challenges. These challenges are to feed 10 billion people by “planet-proofing” the global food system; decarbonising the planet to reverse humans’ climate impact; making healthcare accessible for everyone; augmenting Australia’s existing biggest industries; building the tools for society to adapt to the artificial intelligence era and developing space-tech so that humanity can benefit from space resources.

Next month’s federal budget will be only a downpayment on measures tailored to benefit female voters, with the government planning a more extensive policy rollout in the lead-up to the next federal election. While the budget, for example, is expected to contain changes to superannuation to help women bolster their retirement savings, more substantial measures such as a mechanism to enable catch-up contributions are likely to come later. The government has responded to pressure to deliver a female-friendly budget on May 11 after the October budget last year was criticised for focusing support measures on male-dominated industries such as housing construction and manufacturing. That pressure intensified in the wake of revelations this year of the alleged rape of former staffer Brittany Higgins, and the historical allegations levelled against cabinet minister Christian Porter, all of which exposed Scott Morrison to accusations he had a tin ear towards women and their issues.







Fossil fuel subsidies have cost state, territory and federal budgets roughly $10.3 billion over the past financial year, or $19,686 a minute, according to a new report from The Australia Institute. The Australia Institute says fossil fuel subsidies cost more than Army capabilities in the budget. The progressive think tank says the $7.84 billion allocated for the fuel tax credit scheme in the Federal Budget alone exceeds the $7.82 billion spent on Army capabilities or the $7.55 billion on Air Force capabilities. It also has calculated state governments have contributed some $1.2 billion to coal, oil and gas companies by helping reduce the costs of exploration, improving ports, railways and power stations, while also funding research aimed at reducing emissions caused by burning fossil fuels







A new report into the nation’s migration levels warns of potential economic harm if skilled migrant numbers are not restored, saying the budget deficit position could be affected. The new research by BIS Oxford Economics reveals overseas migrants have an employment participation rate of 92% compared with just 66% for the overall working age population. Property developers are calling for a return to positive net migration levels in light of the economic research, which reveals migrants were responsible for 57% of Australia’s population growth over the past decade and are among the biggest buyers of housing. The research foreshadows that the loss of migration associated with the international border closure will result in 1.1 million fewer residents in Australia in 2030-31, meaning the population will be smaller and older than previously expected, which will result in a longer-term structural deficit than previously predicted by Treasury. BIS Oxford Economics chief economist Sarah Hunter said Sydney and Melbourne captured 75% of temporary workers and permanent residents, with migration levels remaining relatively stable at around 220,000 a year over the past decade, before COVID struck. From April to November last year, just 4400 migrants arrived in Australia, down from 63,000 over the same time frame in 2019. International students make up the largest category of overseas arrivals, with full fee-paying students bringing in revenue for universities, spending on local goods and services, requiring housing and access to public amenities as well as generating revenue for local retail, recreational activity and housing services.

The Australian Council of Superannuation Investors has put the top 200 listed companies on notice over their climate policies, threatening to take action that could see directors ousted if they fall short on managing climate-­related risks. As part of its new climate change policy released on Monday, ACSI will use its financial clout to push corporate Australia forward on climate change, pledging to recommend members vote against director re-election where companies fail to take adequate climate action. The influential ACSI, which advises more than $1 trillion of ­industry super funds and institutional investors including behemoths AustralianSuper, Aware Super and QSuper, in its new policy also called on policymakers to deliver “credible and continued support for action to achieve a net-zero emissions and climate-resilient economy”. It comes days after the Prime Minister appeared at a US virtual climate summit and said Australia was “well on the way” to reaching a 26 to 28% reduction in 2005 emissions levels by 2030 but failed to commit to net zero emissions by 2050.

Australia’s biggest superannuation funds will vote against the re-election of directors they believe have failed to manage climate risk appropriately, and step up the push for companies to give investors an annual vote on the climate progress. The Australian Council of Superannuation Investors, which represents 36 Australian and foreign super and institutional investors with combined assets of more than $1 trillion, will target chairmen and directors in charge of board risk committees and sustainability committees under the policy.

Climate change is by far and away the top priority for investors with a focus on environmental, social and governance (ESG) factors, according to new research, but their investment advisers are less enthusiastic. A survey of more than 2000 active investors by research house Investment Trends in January and February found 78% of self-identified ESG investors intend to buy and sell stocks and funds based on environmental factors in the next year. That was followed by corporate governance (46%), social issues (34%) and Indigenous issues (31%). The finding represents a 34% jump in demand for environmental investing compared to the 2020 research, in which 58% of respondents indicated climate change and the environment was their highest ESG priority. Demand was particularly heightened among the next generation of investors, with 74% of Generation Z respondents (those aged 18 to 24) indicating they had traded a stock or had exposure to an investment product based on environmental factors.



Ben Roberts-Smith has stood down from his role as general manager of media company 7Queensland and Seven Brisbane to focus on his upcoming defamation trial. Mr Roberts-Smith, a highly decorated former soldier and Victoria Cross recipient, is suing The Age and The Sydney Morning Herald over reports he allegedly committed murder during deployments to Afghanistan between 2009 and 2012, and that he also allegedly punched his mistress in the face in Canberra in 2018. Mr Roberts-Smith denies the allegations and says the reports are defamatory because they portray him as a criminal. The media will defend the claim using a truth defence at a trial to start on June 7.

UK-listed Entain has increased it’s bid from $3 billion to $3.5 billion for Tabcorp’s troubled wagering and media business, upping pressure on the company to consider the offer while undertaking a strategic review of that arm of the business. The board told the market on Tuesday that the revised proposal continues to be subject to numerous conditions including due diligence, arranging financing, receipt of all relevant regulatory approvals and obtaining various third party approvals and consents Last month, Tabcorp chairman Steven Gregg officially put the wagering and media business in play by launching a broad strategic review after batting away Entain’s $3 billion bid.


Coles’ supermarket sales fell for the first time in more than 50 quarters as the retailer cycled a surge in spending from panic buying in March last year. Same-store supermarket sales fell 6.4% in the three months ending March, after growing 13.1% in the same quarter last year and by about 30% in the month of March, when panicked shoppers stuffed their trolleys with toilet paper and pantry staples as the coronavirus spread. Coles’ same-store food sales rose 3.3% in the first six weeks of the March quarter, so the negative result suggests same-store sales for the last six weeks of the quarter fell by more than 12%.


And that’s it for this week. And next week, I’ll be talking to Michael OHannessian, CEO of managed accounts platform Praemium. And I’ll be talking to economist Nicholas Gruen about how we should re-evaluate fiscal and monetary policy.

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.