In an extraordinary development in the Lehmann vs Ten defamation case, a former producer on Seven’s Spotlight program besmirched Bruce Lehrmann’s credibility by alleging he had received perks totalling tens of thousands of dollars including a $361 steak and reimbursement for the cost of sex workers and illicit drugs before he signed an exclusive interview deal with the network.
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 10 in our series for 2024 and today’s date is Friday April 5.
First, I’ll be talking to Gartner VP of HR Advisory Aaron McEwan to talk about the future of work, people strategy and talent management strategies in the face of AI and Chat GPT.
And I’ll be talking to Indeed economist Callam Pickering about the latest unemployment figures
But first, let’s talk to Aaron McEwan.
So what’s happening in the news?
In an extraordinary development in the Lehmann vs Ten defamation case, a former producer on Seven’s Spotlight program besmirched Bruce Lehrmann’s credibility by alleging he had received perks totalling tens of thousands of dollars including a $361 steak and reimbursement for the cost of sex workers and illicit drugs before he signed an exclusive interview deal with the network. Network Ten succeed on Tuesday night in an urgent application to call fresh evidence about Lehrmann’s dealings with Seven as part of its defence to the former federal Liberal staffer’s multimillion-dollar defamation case over an interview with Brittany Higgins aired on The Project on February 15, 2021. Federal Court Justice Michael Lee postponed his judgment in the defamation case, which was slated to be delivered at 10.15am on Thursday, to hear evidence on Thursday afternoon from former Spotlight producer Taylor Auerbach, who will be called by Ten. Ten’s barrister, Dr Matt Collins, KC, told the court on Tuesday evening that Auerbach would allege Lehrmann gave Seven confidential information from his aborted ACT Supreme Court criminal trial for Higgins’ sexual assault, including more than 2300 pages of private text messages between Higgins and her ex-boyfriend Ben Dillaway. Lehrmann has previously told the court he did not give documents to Seven. Collins alleged evidence before the judge would suggest just 17 of the 2321 pages of Higgins and Dillaway’s texts were ultimately tendered in the criminal trial, and that if Lehrmann had leaked them to Seven he had acted in breach of an implied obligation not to use material obtained during the criminal trial process for a collateral purpose. Asked in court last year if he had given any documents to Seven as contemplated under the exclusive interview deal signed in April last year, Lehrmann said: “No, I just gave an interview.” Ten is seeking to argue that Auerbach’s evidence, if accepted, raises doubts about Lehrmann’s credibility. Auerbach says in two affidavits that Lehrmann provided him with Higgins and Dillaway’s text messages “on or about 18 December 2022 in Bridport, Tasmania, during a golf trip paid for by Seven”. He claims a round of golf cost $401.83. An affidavit shows Auerbach was employed by Seven as a senior producer on Spotlight for two years until August last year, after which he “made claim against Seven for psychological injury … which I settled on confidential terms” Auerbach’s claims, which have yet to be tested in court and are set out in three affidavits filed in the proceedings, include allegations that a raft of “purchases [were] incurred by me, and/or Seven directly, for the benefit of” Lehrmann. Among the receipts annexed to his affidavits is a $504 meal at the Chophouse restaurant in Sydney in January 2023 including a $361 Tomahawk steak weighing 1.9 kilograms. Auerbach alleges in one of his three affidavits that Seven paid for a taxi for Lehrmann from Franca restaurant in Potts Point to Meriton Sydney on January 5 last year and that money Lehrmann paid “for illicit drugs and prostitutes that evening at the Meriton and the following evening at a brothel in Surry Hills were reimbursed to [him] … by Seven”. He claims this was done “through ‘per diems’ via invoice emailed to … [Spotlight’s] Unit Manager” after Lehrmann left Sydney in early January. “I no longer have a copy of this invoice,” he says in one affidavit. Auerbach also claims that receipts for Sensai Thai Massage, which he booked for Lehrmann in Elizabeth Bay months earlier on November 26, 2022, totalled “approximately $10,315”. Text messages annexed to Auerbach’s affidavit suggest he subsequently texted an unknown party connected to the massage transactions and said: “Can you refund credit card and I give you cash”. Samantha Maiden, political reporter at news.com.au, had previously reported that “two Thai masseuses were booked – one for Mr Lehrmann and another for a Seven employee”, later reported to be Auerbach, in the early hours of Saturday, November 26, 2022. “The total amount paid in one night for Mr Lehrmann and the Seven staffer appears on the Spotlight credit card as $2940 in multiple transactions of $1000,” Maiden’s report said.
Paula Hitchcock says she regularly attended the billionaire Pratt family’s weekly Shabbat at the invitation of her biological father, Richard Pratt, and his wife Jeanne. She was also offered a bedroom in their Melbourne home and joined their family holidays. New details of the family connections have been made by the deceased Visy magnate’s love child in her latest legal claim. At stake is one of Australia’s biggest family fortunes. The 27-year-old is trying to prove she is legally entitled to the same slice of the Pratt family trust as her high-profile half-siblings Anthony Pratt, Heloise Waislitz and Fiona Geminder. Richard Pratt, who was one of Australia’s richest men, led an extraordinary double life. He was married to Jeanne, but also had high-profile affairs. The man who emigrated from Poland to Australia in 1938 and went from acting to taking over the family business, died in 2009, but left his wife and children much more than his wealth. The late Pratt made his fortune spearheading one of his father’s businesses that manufactured cardboard boxes, Visy, and amassed a fortune now worth about $27bn. Paula Hitchcock is now asking the NSW Supreme Court to declare her a “discretionary object” of the Pratt Family Holdings Trust, arguing a deed of exclusion – which fairly cut her out as a child, according to the siblings – should be voided. Amid a two-year court stoush, Ms Hitchcock is fighting to put an amended statement of claim on the court’s record that lists several examples she says demonstrate that she was acknowledged as part of Pratt’s family “at all times” since her birth. Ms Hitchcock was initially left a mansion in the Sydney harbourside suburb of Watsons Bay and a property in rural NSW in Pratt’s will. She also stood to collect $23m in private shares upon her 21st birthday. After Pratt died in 2009, Ms Hitchcock’s mother contested his will, leaving the Hitchcocks with a settlement that included shares and property. Lawyers for the Pratt siblings are arguing Ms Hitchcock’s amended statement of claim should not be accepted and at a hearing in February said it was “seriously defective e”. It came after the pleadings have been filed multiple times and NSW Supreme Court judge Michael Meek noted that the case had been ongoing for 22 months, which was a “fairly long time”.
And speaking of dynasties, a third-generation member of the billionaire Besen family has issued a rallying call to wealthy Australians to be more thoughtful about where they make investments, arguing they have a responsibility to help “create the world that they want to see”. “If your wealth is not meaningful to you, you’ve missed a massive opportunity,” said Adam Milgrom, grandson of the late Melbourne retail fashion billionaires Marc and Eva Besen. “Those of us who are lucky enough to have wealth and have more than we need have a responsibility to make our investments meaningful for society. “I would love to see that all investors are being thoughtful with where their money is going. Instead of thinking of investing as an activity that is just there to generate returns, to really think about investing as a tool that they can use to create the world that they want to see. If you think about it from a gardening analogy, the plants you water are the ones that are going to grow.” Mr Milgrom’s great uncle is property magnate John Gandel, co-owner of Melbourne’s Chadstone Shopping Centre, one of the biggest in the southern hemisphere. His mother is Naomi Milgrom, who controls retail brands Sussan, Sportsgirl and Suzanne Grae, while his aunt is Reserve Bank of Australia director Carol Schwartz. Mr Milgrom’s uncle, Alan Schwartz, late last year argued that there was still too big a divide in the investment strategies of the nation’s family offices – structures established by rich families to manage wealth – between the commercial and philanthropic. He argued that still too few connected their philanthropy to commercial, profitmaking opportunities. The first and second generations of the Besen and Gandel families have a built a strong tradition of giving. The Besen Family Foundation, run by Mr Milgrom’s aunt Debbie Dadon, was established more than three decades ago to build upon the philanthropic tradition started by Marc and Eva Besen.
The Australian economy is in the middle of a “perfect storm” with insolvencies rising to an almost decade high last month as businesses struggle with crushing debt and a shortage of cash. Australian Securities and Investments Commission figures show there have been 2566 insolvency appointments so far this calendar year to March 31, compared with 1881 during the same period in 2023. Revive Financial head of business restructuring and insolvency Jarvis Archer said insolvencies were tracking about 36% higher in the 2024 financial year compared with 2022-23. They were averaging about 826 a month – up from 660 per month last year. Mr Archer said preliminary numbers indicated more than 1040 companies entered external administration in March, which was the highest number since September 2015. He said that for the first time, small business restructuring (SBR) appointments had exceeded voluntary administration and court liquidation appointments. Construction continued to be the biggest casualty of the current insolvency wave with a stream of major national companies calling in administrators. Building giant St Hilliers, which does work for the Department of Defence, went into voluntary administration in February leaving 21 jobs in limbo and initially owing $13m while national fit-out and refurbishment business Rork Projects collapsed owing about $30m. Last week Queensland civil construction specialist Allroads was placed in liquidation leaving a string of roads and defence projects with an uncertain future. Retailers have also been hit; 93-year-old vacuum cleaner seller Godfreys sought a buyer after being forced into voluntary administration. Mr Archer said the impact of the pandemic and challenging trading conditions caused many businesses to stop paying their taxes.
National home values set a record high for a fifth consecutive month in March as a resilient economy and the swelling population pointed to further increases to come. The home value index compiled by data group CoreLogic showed prices rose 0.6% last month, matching February’s increase. Median home prices were $772,730, rebounding just over one-tenth since its recent nadir in January 2023. A separate index run by PropTrack produced similar results. National home prices were 0.34% higher in March to be up 6.79% from a year earlier, also a fresh peak.
One of Australia’s largest energy utilities says clean hydrogen has the potential to become a viable fuel capable of replacing natural gas in power plants within a decade, eliminating the need to consider building expensive nuclear generators. The federal opposition is fighting the Albanese government over its ambitious renewable energy rollout targets, and is pitching nuclear as the nation’s essential future source of power to compensate for coal exiting the grid. Critics of the Coalition’s push, however, say onerous capital costs and lengthy construction timelines make nuclear energy an impractical solution for Australia’s needs. EnergyAustralia, the country’s third-largest electricity and gas supplier, believes nuclear energy is unnecessary and does not include the technology in its long-term planning. Instead, says EnergyAustralia chief executive Mark Collette, “green hydrogen” could be scaled up to become a commercially available power source faster than it would take Australia to establish a nuclear industry. Green hydrogen – the name for hydrogen made using renewable energy – burns cleanly, meaning it could provide the same emissions-free back-up for the grid during times of low wind and solar generation as nuclear. Green hydrogen is considered a promising future fuel due to its potential to displace gas and help decarbonise processes that cannot be simply electrified. However, it remains prohibitively expensive to make and is not yet viable at scale, with most of today’s hydrogen still made using fossil fuels. Despite its advantages, green hydrogen is not yet part of our energy mix due to difficulties that research, government policies and private investment have to overcome:
One of Australia’s top green energy superpower advocates says it is unclear whether the nation has a comparative advantage in the solar panel industry that the Albanese government is propping up with $1 billion of support, including in regions facing the likely loss of thousands of coal-fired power station workers, some earning up to $170,000. Economist Rod Sims said while there was no doubt the country would need a “hell of a lot” of panels to seize the opportunities created by abundant renewable solar energy, its ability to produce them economically and in a way that produces high-paying jobs was another matter. “There are reasons to support an industry that has a clear future with comparative advantage,” he said. “What I don’t know one way or the other is whether solar panels do.” The warning, which echoes the view of Labor-appointed Productivity Commission head Danielle Wood, comes as government modelling revealed between 50% and 80% of workers at coal-fired power stations may fail to find new jobs when fossil-fuel generation collapses in the next decade or so. As the Albanese government finalises this year’s annual budget, potentially the last ahead of the next election, the focus is increasingly on how to manage the challenge of decarbonising the economy while supporting workers and communities that will bear much of the direct cost. At the same time, they are preparing a Biden administration-style support package to spur industries that could fill the void left by the fossil fuel industry. Professor Sims – a former competition regulator who now champions domestic expansion in green energy, steel and fertiliser production funded via taxes on oil, gas and coal exporters – said Australia has a comparable advantage because it can compete in some of the basic ingredients that go into making panels, including green iron and silicon. “What I don’t know is whether having a comparative advantage in silicon translates into making solar panels. I just don’t know. But we will need a lot of them.” He said getting such investments wrong would mean “putting people into jobs that will be low paying because they’re not natural industries to be involved in” for Australia. Labor tabled legislation last week to establish the Net Zero Economy Authority, one of Mr Albanese’s key pre-election promises to workers exposed by the accelerating closure of coal-fired power stations. A government impact analysis of the new agency’s legislation outlines the costs and benefits of three broad policy options when managing fallout from the closure of 10 of 19 remaining coal power stations between now and the end of 2035, with another seven to follow by the mid-2050s. The options include retaining the “status quo” in which workers rely on existing supports with no further government involvement; a version in which unions and employers “voluntarily” implement “pooled redeployment” of workers between remaining coal-fired power stations; and the government’s favoured, more explicitly interventionist framework, that will force companies to support workers.
China’s removal of punishing tariffs on Australian wine imports will be celebrated with the popping of corks over the Easter weekend but rebuilding the $1.1 billion trade will take time, said Assistant Trade Minister Tim Ayres. The Chinese Ministry of Commerce announced late on Thursday it was “no longer necessary” to impose sanctions on Australian wine imports. They were imposed by Beijing at the height of diplomatic tensions in 2020. The decision removes one of the last major sanctions on $20 billion worth of Australian exports, with restrictions remaining on lobster and beef. Mr Ayres said China’s decision was a result of the “really hard and determined work” put in by his government. “It is a very welcome development that comes on the back of the $20 billion worth of impediments to Australian exporters… wine was the biggest final part of that piece,” he told Sky News. Asked when the Chinese market would recover to its $1.1 billion peak, Senator Ayres said it was going to take time.
British Formula One racing team McLaren has teamed up with the Great Barrier Reef Foundation to help accelerate the restoration of coral on one of Australia’s biggest tourism drawcards. In an unlikely pairing, the motorsports team – whose drivers, including Australian young gun Oscar Piastri competed at the Melbourne Grand Prix last weekend – sent two engineers to North Queensland late last year to help the non-for-profit organisation work out how to scale-up coral spawning production on the reef. The Great Barrier Reef is at the epicentre of climate change McLaren chief executive Zak Brown said the McLaren Racing staff were giving an “engineer’s perspective” to the Great Barrier Reef Foundation’s coral spawning program by looking for ways to improve the production process. McLaren has a number of technology partnerships with major companies, including Google, and helped manufacture ventilators for the UK government during the pandemic. Currently, scientists can grow a few hundred thousand corals a year in an aquarium, focusing on more climate resilient varieties to help withstand warmer ocean temperatures, at a price of about $7 to $10 per coral. The coral is then inserted into ceramic devices – which looks like a star, with each branch about 6cm long – and then deposited onto the reef. With the assistance of McLaren engineers, who helped identify bottlenecks and streamline the process, the Great Barrier Reef Foundation is hoping to reduce the cost for production to less than $1 a coral. This would allow them to scale up to an interim target of 2 million coral a year by 2025 and ultimately 200 million coral a year by 2030. The Great Barrier Reef Foundation is hoping to automate the process of putting coral on tabs (“like chocolate blocks”) in the aquarium and for deployment onto the reef – both of which have so far been done manually. McLaren, like Formula One, is also grappling with its own carbon footprint, conscious that the sport – which travels with large entourages to 24 races around the world each year – also has a responsibility to do something on climate change. Formula One has already committed to burning carbon-neutral fuels within two years.
And that’s it for this week. And next week, I’ll be talking to Paul Bevan, the CEO of Melbourne based agrifood startup Magic Valley with its development of cultivated pork.
And I’ll be talking to AMP Capital chief economist Shane Oliver about Australia’s latest inflation figures.
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Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week
