Talking Business August 13 2021

Australia’s unravelling “zero Covid” strategy will cost its economy more than $1 billion every week of lockdown as analysts warn restrictions in some of its states could last until October.


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 28 in our series for 2021 and today’s date is Friday August 13.

First, I’ll be talking to Hayley Hopwood, head of growth at Stripe Technology which basically powers payments on the internet across the whole of Australia and globally and which onboarded tens of thousands of customers during 2020, providing them with the tech stack they needed to survive the economic after-effects of the pandemic.  And I’ll be talking to CommSec chief economist Craig James about market trends for the week.

But now, let’s talk to Hayley Hopwood

Germany’s BioNTech with partner Pfizer of the pioneering mRNA jab, raised its vaccine revenue forecast for 2021 in its latest earnings report. Pfizer and BioNTech – US firm Pfizer and BioNTech got a headstart over rivals as they were the first in the western world to announce positive results from clinical trials of their vaccine last year. Pfizer has earned more than its competitors, raking in $US10.8 billion ($A14.6 billion) in the first half of this year. The US company has raised its outlook for 2021, expecting to make $US33.5 billion ($A45 billion) in sales for the full year. BioNTech reported revenues of 7.3 billion euros ($A11.6 billion) in the first half. Unlike its larger partner, the company’s only product on sale is the coronavirus vaccine. BioNTech expects vaccine revenues to reach 15.9 billion euros ($A25.4 billion) for the full year, up from a previous estimate of 9.8 billion euros ($A15.6 billion). The Moderna vaccine, which is soon to be available in Australia, reported a turnover of $US5.9 billion ($A9.4 billion) in the first six months of the year. It expects to make $US20 billion ($31.9 billion) in revenues thanks to the vaccine this year. AstraZeneca, who did not provide a full year estimate, generated $US1.2 billion ($A1.6 billion) in sales in the first six months of the year . The Johnson & Johnson vaccine reported $US264 million ($A358 million) in sales and expects to make $US2.5 billion ($A3.3 billion) for the full year


Australia’s unravelling “zero Covid” strategy will cost its economy more than $1 billion every week of lockdown as analysts warn restrictions in some of its states could last until October. Forecasters warned that renewed lockdowns and the glacial pace of its vaccination programme will trigger a sharp drop in GDP in the third quarter as Delta cases threaten to explode. Economists at UBS said the current lockdown in New South Wales will cause a $1 billion hit a week and cost the Australian economy a cumulative $25 billion. If the most populous state is in lockdown for all of the third quarter and restrictions are imposed elsewhere, national GDP would fall by 2.5% compared with the previous three months, the bank warned. Such a decline would not be as damaging as the record 7% slump suffered in the second quarter of 2020 but would still be far larger than pre-Covid contractions. George Tharenou, a UBS economist, warned the “looming very large economic cost of the lockdown is already evident” in recent retail sales and payroll data. He estimated up to $1.5 billion of government support every week will be needed to prop up the economy.





The mood among businesses and consumers has turned negative for the first time since 2020, new surveys reveal, as confidence collapses under the weight of the Delta lockdowns along Australia’s east coast. NAB’s monthly business survey counted more pessimistic than optimistic firms in July, after both conditions and confidence “deteriorated sharply” and turned corporate sentiment negative for the first time in about a year – although still not close to the depths recorded during the initial phases of the pandemic in early 2020. The bank’s corporate sentiment index plunged by 19 points to -8pts and was “now well below average”, NAB said, where a reading of zero signals a balance of optimists and pessimists. There was a “very large” drop in confidence among NSW firms, where the corporate mood is now the worst in the country at about -20pts. Sentiment also turned negative in Queensland, albeit only slightly. The gauge of business operating conditions fell 14pts to 11pts, but stayed above the historical average of 6pts. Conditions for Australian firms deteriorated across the mainland, with a particularly large fall of 31pts to 2pts in New South Wales. South Australia also experienced an outsized fall, the report showed. NAB chief economist Alan Oster said: “Overall, the survey shows that the strength in the business sector seen in early-to-mid 2021 has faded on the back of fresh disruptions in the economy, but it has not yet deteriorated to the lows seen in early 2020.”

Enduring COVID-19 outbreaks across the country have pushed consumer confidence into pessimistic territory for the first time since November, according to a weekly gauge compiled by ANZ and Roy Morgan. The nation-wide level slipped 3.1% to 98.6 points, falling below the neutral 100 point mark for the first time in eight months, despite signs of optimism beginning to show in hard-hit Sydney.





Telco giant Telstra is set to scoop up software company MedicalDirector after reaching a deal with private equity owner Affinity Equity Partners. Telstra Health has acquired GP clinical and practice management software company MedicalDirector for $350 million.  MedicalDirector provides software as a service and innovation to the healthcare industry, including across electronic health records, patient and practice management, billing, scheduling, care coordination, medicines information and clinical content.

Employers will be able to ask their staff if they have been vaccinated against COVID-19 so they can guard against infections in the workplace, under federal guidance finalised on Tuesday morning. The federal government is telling companies they have the right to ask workers for their vaccination status despite growing debate about the privacy of the information. But the approach does not mean vaccinations can be mandated across the community, as Prime Minister Scott Morrison warns against mandating by “stealth” through any change in the law to make the jabs compulsory. The new guidance to business means employers will be able to act on the information if workers tell them they have not been vaccinated and therefore might pose a risk to customers and fellow staff. One response would be to move workers away from duties where they are facing customers or interacting with others, reducing the risk that those who are not vaccinated could spread COVID-19 in the workplace. Business leaders are frustrated, however, at Mr Morrison’s decision to avoid any changes to legislation or regulation to provide greater authority and clarity to employers who want to strongly encourage workers to get vaccinated, even if it is not compulsory.

This is why employer organisation Ai Group wants the federal government to mandate COVID-19 vaccinations as part of public health orders to avoid a legal mess. Ai Group boss Innes Willox said employers and unions wanted clear guidance, and the failure of the Morrison government to mandate jabs or indemnify employers will create a “lawyer’s picnic”.


Fruit and vegetable giant SPC has refused to budge on its requirement that all its staff be vaccinated despite union claims that is punitive and unrealistic. But one expert says the increased availability of vaccines may now mean such a mandate is legal. The food manufacturer was locked in meetings for much of Monday afternoon with the Australian Manufacturing Workers Union but did not retreat on its policy  – the first for an Australian employer – that all staff be vaccinated in less than three months. Instead, the company took heart at Victorian Premier Daniel Andrews’ statement on Monday that “vaccination is our only way out of this pandemic” and flagged setting up a pop-up clinic to assist workers to get vaccinated by the end of October. The AMWU is angry that the workers were not consulted over the requirement and argues it is unlikely all workers will be vaccinated in time due to what it claims is workers’ difficulty in accessing vaccines.


Optus are in discussions about their sponsorship with Adelaide over the Crows’ handling of the Taylor Walker racism storm. The telco giant, who signed a four-year deal in early 2019 to become a principal partner of the club, on Tuesday issued a brief statement when asked about Walker’s racial slur of North Adelaide player Robbie Young – for which the former captain was suspended for six matches and fined $20,000. Optus stopped short of endorsing the manner in which the incident had been treated. “As a diverse organisation, Optus does not condone racism or any form of discrimination. We’re consulting with the Adelaide Crows in regards to the management of this issue,” said Optus’ head of marketing Mel Hopkins. Optus’ name appears on the back of the Crows’ jumper.



The Commonwealth Bank’s governance team is chronically under-resourced, has huge attrition rates and is swamped by excessive workloads, but the bank has done little if anything to address the issue, according to the woman in charge of the group. CBA group governance executive general manager Kara Nicholls is suing the bank for allegedly seeking to fire her last week in response to “whistleblower” complaints she made to senior officers and chairman Catherine Livingstone about the bank’s failure to respond to repeated warnings on understaffing and workers’ safety.

NSW Police’s Financial Crimes Squad is pushing ahead with a probe into Forum Group founder Bill Papas as Westpac and two other banks attempt to claw back funds lost in a $400m alleged fraud. NSW Police referred the inquiries to the Financial Crimes Squad in late July after authorities were earlier alerted to allegations of fraudulent activity linked to equipment leases. The financial crimes unit is understood to be stepping up its inquiries into Mr Papas’s affairs and the wide-ranging allegations by the three banks. Westpac has reported its allegations to NSW Police, the banking regulator and the Australian Securities & Investments Commission as it pursues Forum and Mr Papas in the Federal Court. The bank’s court action, lodged in late June, also names Forum director Vincenzo Tesoriero as a respondent. His and Mr Papas’s assets have been frozen. Last week, affidavits by Mr Pappas and Mr Tesoriero were made public, revealing an empire of fast cars, houses and business interests spanning the globe. Mr Papas, a Sydney soccer identity, was known to drive a Bentley and two Porsches, and the Bentley was often parked at Forum’s head office in North Sydney.

NAB will acquire Citigroup’s consumer business for $1.2 billion in a deal that will double the size of its credit card business and take up the fight with disrupters such as Afterpay. The bank will take ownership of a $12.2 billion loan book and $9 billion in deposits under the deal announced on Monday afternoon, which included a cash premium of $250 million.. NAB CEO Ross McEwan said Citi’s 1 million credit card customers were especially attractive for the bank and described the fundamentals of the credit card market as strong in the face of competition from increasingly popular buy now, pay later offerings. Mr McEwan said there was still plenty of life left in plastic, citing the 16 million credit cards in the hands of Australian customers racking up $27 billion worth of transactions every month.


Australia’s consumer watchdog, the ACCC, is taking Telstra, Optus and TPG to court, alleging they misled hundreds of thousands of consumers over NBN speeds. The ACCC alleges the telcos made false or misleading representations in their promotions of NBN plans The watchdog says the companies will be taken to court for making alleged false or misleading representations in their promotions of some 50Mbps and 100Mbps NBN plans, in breach of the Australian Consumer Law. It is also alleged Telstra, Optus and TPG wrongly accepted payments from certain customers for NBN plans when they were not provided with the promised speeds. It said the telcos promised customers they would test line speeds and offer remedies such as cheaper plans with refunds, but had failed to do so If it succeeds, the companies could each be forced to pay millions of dollars in fines.

An expert group examining the cause of a $1.4 billion cost overrun at a giant copper mine run by Rio Tinto in Mongolia said in a report that it was caused by mismanagement and not the unfavourable rock conditions blamed by the world’s second-largest miner. The 157-page report was commissioned by the owners of the Oyu Tolgoi mine— Turquois Hill Resources and a Mongolian state-owned company—to examine why construction of an underground pit was delayed and costs rose. Separately, the U.S. Securities and Exchange Commission and British regulators are looking into whether Rio Tinto, which has a majority stake in Turquoise Hill, should have detailed problems at the Oyu Tolgoi underground mine to investors sooner. The report spoke of an unhealthy culture across the site of the underground mine at Oyu Tolgoi, which it attributed to a lack of coordination between teams. “People were working in silos with one group blaming the other for any failings,” it said.

And it’s profit reporting season. Commonwealth Bank’s net profit attributable to equity holders climbed 6% to $10.2 billion on revenue up 2% to $24.4 billion.  On a continuing operations basis cash net profit climbed 19.8% to $8.66 billion and statutory net profit climbed 19.7% to $8.84 billion.  IAG has reported a $427 million loss for the 2021 financial year. Arena REIT’s statutory net profit climbed 116% to $165.4 million while net operating profit rose 18.5% to $51.9 million. Professional services and accounting group Kelly Partners has reported a financial 2021 net profit up 15.1% to $4.6 million on sales up 7.5% to $48.9 million. Rail freight business Aurizon has reported a financial 2021 underlying net profit up 1% to $533 million on sales down 1.5% to $3.06 billion. Transurban revenue from continuing operations fell 9% to $2.89 billion. It reported a $287 million loss from continuing operations. Real estate investment trust Charter Hall Long WALE REIT’s  $159 million in operating earnings is up 30.5% on the prior period. Challenger Financial Group posted a $592 million net profit after tax for the year ending in June, undoing the $416 million loss in the prior pandemic-scarred period. James Hardie’s profit has soared during the first quarter of the 2022 fiscal year, with sales increasing across the board. Net sales from ordinary activities rose 35% to a record $US843.3 million while net profit soared 1191% to $US121.4 million. Internet connectivity business Megaport has widened its financial 2021 net loss to $55 million on revenue up 35% to $78.3 million. Reckon’s normalised EBITDA is up 7.1% to $16.7m. Mineral Resources underlying net profit soared 230% to $1.1 billion while statutory net profit climbed 26% to $1.27 billion.

And that’s it for this week. And next week’s I’ll  be talking to Tommy Huppert, the CEO of medical marijuana company Cannaterek. And I’ll be talking to AMP Capital chieg economist Shane Oliver about the profit reporting season and the state of the economy.

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