When cost-cutting backfires.
Qantas ordered to pay a record A$90 million fine after the Federal Court ruled it illegally outsourced 1,820 ground staff during the pandemic.
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 https://www.businessacumen.biz/
I am Leon Gettler. My job is review and monitor the week’s news in business finance and economics. I bring it all to you every week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 28 in our series for 2025 and today’s date is Friday August 22.
First, I’ll be talking to Matt Masson, CEO of CT Partners, Australia’s most influential independently owned travel buying network, representing 33 of the country’s largest independent corporate travel management firms and premium leisure agencies. Together, they manage travel for more than 1.4 million Australian travellers annually. We’ll talk about what business leaders should review in their travel program this EOFY and emerging trends in corporate and premium travel in FY26
And I’ll be talking to independent economist Saul Eslake about what we can expect from the government’s productivity and tax summit. The interview was done the week before this week’s summit, the government is unlikely to make instant decisions, so a lot of it is about examining the issues that will be discussed.
But first, let’s talk to Matt Masson
So what’s happening in the news?
Australia’s largest airline has been ordered to pay a landmark penalty of $90 million for what has been dubbed the largest case of illegal sackings in the country’s history. Qantas outsourced more than 1800 baggage handlers, cleaners and ground staff in 2020, in a move the Federal Court ruled was designed to curb union bargaining power in wage negotiations. The embattled airline’s appeal to the High Court was unsuccessful, paving the way for the penalty to be awarded on Monday. Federal Court judge Michael Lee cited the “sheer scale of the contraventions, being the largest of their type” as a reason to impose a penalty that would deter other businesses from similar conduct. He ordered Qantas to pay $90 million in penalties, $50 million of which is to be paid directly to the union that brought the proceedings and highlighted the illegal conduct. “To deprive someone of work illegally is to deprive someone of an aspect of their human dignity, and this is not assuaged simply by expressions of regret,” Justice Lee said. He was scathing about the embattled airline’s conduct after the outsourcing, pointing to efforts to place a “less than candid” picture of the outsourcing decision before the court. He noted Qantas had apologised publicly but then had attempted to deny any compensation payments to the affected workers.
Nurses, engineers and other immigrants with qualifications from overseas would be able to work in Australia under a proposal that won support at Tuesday’s economic roundtable as unions and bosses jousted over a bid to slap a new tax on businesses. Treasurer Jim Chalmers hailed the first day of the three-day Canberra talkfest as a moment of consensus on skills reform, prompting Labor to do an about-face and start drafting a joint statement of intent after last week downplaying expectations of any international summit-style statement. Any move to allow more people to work in professional sectors would probably face pushback from powerful groups that represent large groups of workers. The Royal Australian College of GPs criticised the fast-tracking of international doctors’ registration last year, but Australian Medical Association head Danielle McMullen said on Monday night that the sector was supportive. Independent MP Allegra Spender was a key advocate for skills recognition in Tuesday’s session, along with former Treasury secretary Martin Parkinson. “We’ve got migrants here who I’ve met. They’ve been brought here because they’re electricians and then they can’t properly use all their skills, or they are qualified nurses, we desperately need them, but they’re moving back to France,” Spender said. “They can’t get that recognition.” Spender said there was “really strong” consensus on skills recognition in the meeting chaired by Chalmers, including the need to streamline licensing schemes across states so that people could more easily work across borders. Australian Industry Group boss Innes Willox said: “We’re missing out on the inputs of millions of people in our economy because they’re not being given an opportunity to work in the field. Whether it’s across the care sector, engineering, tech.” Unions also proposed a 1.5% payroll levy on businesses with turnover of more than $500,000 to fund worker training. The idea was rejected by industry groups, including Master Builders Australia and the Business Council of Australia, and Willox, who called the idea a “crock of shit”. Among the 315 nuisance tariffs in the government’s sights are a 5% impost on imported air conditioners and a similar tariff on cast iron pipes and tubes. While most at the roundtable supported the move on tariffs, ACTU assistant secretary Liam O’Brien expressed some caution. “It’s vitally important that industry workers, unions, and indeed employees in those industries, are consulted,” he said. The roundtable also has tax, artificial intelligence and budget sustainability on its agenda.
Education minister Jason Clare says the national regulator needs sharpened powers to “step in” around governance and leadership issues in the university sector and warned vice chancellors not to get “too defensive” about moves to limit their generous salaries. Clare said that university governance is “not up to scratch”, as wide-ranging issues including staff underpayments and failure to deal with antisemitism on campuses have driven public support for the sector to historic lows. It comes as an analysis of vice chancellors’ salaries published by The Australian Financial Review has found the average remuneration was more than $1 million in 2024. “At the moment, TEQSA (Tertiary Education Quality and Standards Agency) has a sledgehammer and a feather and not much in between,” Clare will say. “There is a good argument that it needs better tools to be able to step in and act when it’s justified in the public interest. And to be able to respond to systemic risks, not just the compliance of individual providers.” TEQSA is currently involved in an investigation into Australian National University, where both its chancellor Julie Bishop and vice chancellor Genevieve Bell have been asked to justify the integrity and competence of their leadership. In a letter to vice-chancellor Professor Genevieve Bell, dated June 30, TEQSA chief executive Dr Mary Russell, specified numerous concerns about the “culture of ANU’s council and executive leadership” and the council’s oversight of the institution’s financial position. Last Tuesday, Russell told a Senate inquiry into university governance the regulator had been investigating ANU since last October, when a massive $250 million cost-cutting program was announced. “However, this is one of those matters where additional concerns and issues have been raised in the course of our inquiries, and that has expanded the scope and focus,” Russell said. Running separately to the Senate inquiry is a review of university governance announced by Clare in January. That expert council is chaired by Melinda Cilento, chief executive of the Committee for Economic Development of Australia. “They are looking at everything from [vice chancellors’] remuneration, to accountability, transparency and culture,” Clare said. The report has not yet been handed to him, but its recommendations will be discussed at the next meeting of state and territory education ministers in October. Clare is encouraging vice chancellors to be open-minded to the findings of the governance inquiry and to possible changes to vice chancellor’s salaries. “This is not about belting universities,” Clare will say. “[But] I have encouraged you in a lot of different meetings to lean into this.”
Productivity Commission chair Danielle Wood says a populist stampede by successive governments to introduce a new rule each time a fresh issue emerges has stifled investment and growth and driven the nation’s productivity decline. Advocating an aggressive approach to deregulation at the week’s Economic Reform Roundtable, Wood said “regulatory hairballs” have found their way into “almost every corner of our economy”. The result: massive blowouts in approval times for housing and major infrastructure projects. “Growth has simply fallen down the list of priorities in policymaking,” she said of federal, state and local governments in an address to the National Press Club on Monday. “Regulatory creep is in part a function of demand for governments to do something every time an issue emerges,” Wood said. “When combined with Australians’ tendency to look to government for answers – our Canberra fix – we have ended up with a system that dampens growth.” She said a populist stampede by successive governments to introduce a new rule each time a fresh issue emerges has stifled investment and growth and driven the nation’s productivity decline.
And the profit reporting season continues. BHP, the world’s largest listed miner, reported an underlying attributable profit of $10.16 billion for the year ended June 30, missing the Visible Alpha consensus of $10.22 billion. This was the miner’s weakest performance since 2020. Last year, it reported underlying attributable earnings of $13.66 billion. National Australia Bank posted unaudited cash earnings of $1.77 billion for the June quarter, down 1%. Diversified landlord GPT Group reported a statutory profit of $329.1 million for the six months to June 30. DigiCo Infrastructure REIT reported annualised underlying EBITDA of $99 million for the past fiscal year. The a2 Milk Company reported a 21.1% increase in profit to $NZ202.9 million. oOh!Media’s adjusted underlying net profit climbed to $26.5 million, while EBITDA increased 27% to $62.2 million. Lendlease said earnings attributable to shareholders swung to a profit of $225 million in the year to June from a loss of $1.5 billion the previous year. Aurizon’s earnings before interest taxation depreciation and amortisation were $1.57 billion, down 48% on a year earlier and below the $1.66 billion-$1.74 billion range Aurizon had forecast in February. Ampol’s net profit excluding one-time items, the figure most closely watched by the market, dropped to $180.2 million in the six months ended June 30, from $233.7 million a year earlier. Australia’s largest steelmaker BlueScope Steel’s net profit after tax fell to $83.8 million compared with $806 million a year ago. Charter Hall REIT has reported full-year statutory profit of $213.8 million, up from $17.2 million in the previous year. Bathroom and kitchen fixtures business GWA Group has reported full-year statutory net profit after tax of $43.4 million, a 12.3% increase on the previous year. Reliance Worldwide Corporation has posted a 13.5% rise in full-year net profit to $US125 million. HMC Capital has reported a record annual result, with pre-tax operating earnings rising 74% to $224.6 million in the year to June 30, 2025. Profits at business lender Judo Bank are up 24% to $86.4m. CSL reported a full-year net profit of $US3.0 billion, up 17%. Challenger has posted a normalised after-tax profit of $456 million, up 9% year-on-year. Hub24 has posted a strong full-year result, with statutory net profit rising 68% to $79.5 million and underlying net profit up 44% to $97.8 million for the year to June 30. The Perth-based engineering group Monadelphous Group posted a 35% jump in net profit to $84 million in fiscal 2025, from a year ago. Junior east coast gas producer Amplitude Energy has narrowed its full-year loss to $41.3 million. Scrap metal group Sims statutory net profit after tax was $2.4 million for 2024-25 compared with $1.8 million a year earlier. Woodside Energy’s net underlying profit fell 24% to $US1.247 billion in the six months ended June 30, from $US1.632 billion in the same period last year. Jobs listing platform Seek posted $1.1 billion in net revenue, up 1% and profit of $238 million. 4×4 accessories retailer ARB Corporation saw profit after tax fell 5% to $97.5 million, or $96.2 million excluding one-off adjustments. Region Group posted a statutory net profit after tax of $212.5 million. Centuria Capital Group recorded an operating net profit after tax of $100.8 million. ASX listed contractor McMahon Holdings posted a statutory net profit of $73.9 million, almost 40% higher than a year ago. SRG Global Ltd posted a full year EBTDA of $127.1, up 29% on FY24. James Hardie’s profit fell 8% to $US37.8 million. Fletcher Building’s full-year net loss widened to $NZ419 million from a $NZ227 million loss a year earlier. Cleanaway Waste Management has posted a 14.6% rise in underlying EBIT to $411.8 million for the full year. Transurban posted a 52% Net profit of $12.7 million, up 2.0% on pcp (FY24: $12.4 million drop in annual net profit to $178 million, even as the toll road giant reported increases in average daily traffic and toll revenue for the year. Electrical kitchen appliance maker Breville Group reported a 14.6% rise in full-year net profit to $135.9 million. Spark New Zealand posted a net profit of $NZ260 million, down 17.7%. Stockland said full year revenue rose 4.8% to $3.1 billion while net profit more than doubled to $826 million. The Lottery Corporation has posted a 12% drop in net profit to $365.5 million. The Retail Food Group, owner of Gloria Jean’s, Donut King, Beefy’s Pies, Crust Gourmet Pizza Bars, and Brumby’s Bakery, has swung to a full-year loss to $19.5 million from $8.75 million. Iluka Resources half year earnings slumped 31% to $92 million. Dexus has reported a full year net profit of $136.1 million, rebounding from a $1.58 billion loss a year earlier. Telco group Superloop has swung back into the black, reporting a net profit of $1.2 million from a $14.7 million loss a year earlier. Magellan Financial Group has posted a 31% decrease in net profit after tax for FY25 of $165.02 million, compared to $238.76 million during the prior year. Shopping centres owner Vicinity Centres reported a 83.6% increase in full-year profit to just over $1 billion. Gas pipeline owner APA Group has posted a 6.4% gain in underlying EBITDA – the figure that APA bases its profit guidance on – to $2.015 billion. The figure marginally beat the consensus forecast. Net profit, meanwhile, plunged 87.1% to $129 million. VG1 Partners Global Investments recorded a loss of $28.2 million before tax, down from an $88.4 million profit the year prior. Step One Clothing posted a net profit of $12.7 million, up 2.0% on the $12.4 million reported in 2024.
And that’s it for this week. And next week, I’ll be talking to Nicholas Woodward, the country manager of Pack & Send, the company that provides customised logistics solutions for businesses of any size and that has helped countless Australian businesses pivot and grow. We’ll talk about the biggest mistakes Australian businesses when scaling up and how to enhance customer experience through packaging.
And I’ll be talking to AMP Capital chief economist Shane Oliver about the latest profit reporting season.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
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Looking forward to the next episode of Talking Business next week
