Talking Business August 6 2021

Big tech companies have reported record-breaking profits, prompting warnings the world is headed towards a “Blade Runner future” of unchecked corporate power

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 27 in our series for 2021 and today’s date is Friday August 6.

First, I’ll be talking to Ryll Burgin Doyle, a local Australian Business Growth Strategist and billion-dollar disruptor who has a passion for SME’s. And I’ll be talking to IFM investors economist Alex Joiner about the state of Australia’s economy following the lockdowns.

But now, let’s talk to Ryll Burgin Doyle.




Big tech companies have reported record-breaking profits, prompting warnings the world is headed towards a “Blade Runner future” of unchecked corporate power. In the last three months the US’s five largest tech companies made combined profits of more than US$68bn, with Amazon’s sales tipping US$1.2bn a day  Google, Apple and Microsoft last week all reported record-breaking quarterly sales and profits, while Facebook announced its fastest growth in five years.    The combined fortune of the richest seven billionaires passed US$1tn for the first time, according to the Institute for Policy Studies’ (IPS), “We are looking at a Blade Runner future, a world where a handful of companies will dominate all economic activity. This is not just bad for the economy, it’s bad for consumers, for communities, for competition,” said Chuck Collins, senior scholar at IPS. Experts warn the increasing economic might of these companies means they can buy out competitors to establish monopoly control, and consolidate political power to fight any official or government that challenges them.

Payments company Square has reached a deal to acquire Australian “buy now, pay later” provider Afterpay in a $39bn all-stock transaction that would be the largest takeover in Australian history. Square, whose chief executive Jack Dorsey is also Twitter’s CEO, is offering Afterpay shareholders 0.375 shares of Square stock for every share they own — a 30% premium based on the most recent closing prices for both companies. Melbourne-based Afterpay allows retailers to offer customers the option of paying for products in four instalments without interest if the payments are made on time, similar to the concept of layby which is popular in Australia bur rare overseas. The deal’s size would exceed the record set by Unibail-Rodamco’s takeover of shopping centre group Westfield at an enterprise value of $24.7bn in 2017. The transaction, which was announced in a joint statement from the companies on Monday, is expected to be completed in the first quarter of 2022. Afterpay said its 16m users regard the service as a more responsible way to borrow than using a credit card. Merchants pay Afterpay a fixed fee, plus a percentage of each order. The deal underscored the huge appetite for buy now, pay later providers, which have boomed during the coronavirus pandemic. Adoption of buy now, pay later services had tripled by early this year compared with pre-pandemic volumes, according to data from Adobe Analytics, and were particularly popular with younger consumers.

Everybody who is fully vaccinated by December 1 should be paid $300, under a proposal by federal Labor that would add $6 billion to the COVID-19 response bill and almost double the cost of the entire vaccination program. Labor made the demand on Monday night, just after the government announced that a string of support measures for Australia’s struggling airlines, including taxpayer-subsidised tourist fares, will be extended until the end of the year, as well as a new system of retention payments to save the jobs of domestic aircrew. Labor leader Anthony Albanese said the $300 payments,which would include those already vaccinated, would create incentives for others to be vaccinated. The money would help stimulate businesses affected by lockdowns. The government notes the latest statistics show vaccine rates are continuing to increase and the desire to end or avoid lockdowns is acting as incentive enough.

Commonwealth Bank and Westpac will begin a pilot program for employee vaccinations using AstraZeneca following an agreement with the federal government’s vaccine task force leader, Lieutenant General ­Frewen. The banks are considering starting the rollout for some 12,000 bank staff and their families in the eight Sydney local government areas that have been deemed hot spots, when they can access vaccines, potentially in the next week or so.


Qantas will stand down 2500 staff across its mainline and Jetstar brands for two months as it grapples with the continued lockdown in Sydney and COVID-19 spotfires in other states. The stand downs will take effect in a fortnight and employees will be paid until mid-August. Affected workers include domestic pilots, cabin crew and airport workers, and are primarily concentrated in NSW but staff in other states are set to be stood down as well. The staff will be paid in full for their two-week notice period, commencing now. The federal government this week announced that airlines would be able to claim $750 a week for up to half of their air crew workforce on the condition that none were retrenched. Qantas chief executive Alan Joyce said the stand down announced today was forecast to last for two months




Rio Tinto could owe as much as $400m to the traditional owners of a major Pilbara iron ore mine, with the company accused of decades of underpayments to a native title group representing remote Pilbara communities even as it declares record $14bn in iron ore profits. The allegations are based on an audit of more than 20 years of payments due under one of the first ever land use agreements between native title holders and a major mining company in WA, and come after Rio Tinto’s iron ore division booked record profit of $13.8bn ($US10.2bn) in the first half of the year.


The Reserve Bank of Australia held the cash rate near zero and announced an increase to the weekly bond purchases it had reduced a month ago, as lockdowns threaten to curtail economic growth.

Crown Resorts has lost its CEO and chairman as Royal Commissioner Ray Finkelstein QC reveals he is considering splitting the operation of the casino to the hotel, throwing it open to a rival operator.  Crown Resorts has announced its Melbourne casino boss Xavier Walsh will step down later this month. Crown has also confirmed that chairman Helen Coonan will be stepping down by the end of the month.




The subscription model that has underpinned the success of Netflix, Spotify and Amazon Prime is shaking up the Australian furniture market. Furniture subscription start-up Breeze Furniture is aiming to disrupt the market for disposable “fast furniture” by enabling consumers to rent on-trend furniture for three or 12 months and swap or return items when their preferences change. Breeze has signed a partnership with US homewares giant William Sonoma’s West Elm, which is known for its mid-century modern vibe, quality craftsmanship and commitment to sustainable materials. From this week, Breeze will offer for rent a range of more than 70 products from West Elm, including sofas, armchairs, coffee tables and consoles.


Australia’s biggest natural gas distributor aims to have a 100% green hydrogen product available for new housing subdivisions by 2025, as part of a big push into renewable gas to avoid losing out to electrification in the rush to net zero emissions. Australian Gas Infrastructure Group (AGIG), which owns distributors Multinet and Australian Gas Networks, is targeting all of its gas network to be on at least a 10% renewable gas blend by 2030, to pave the way towards its new stretch target of net zero emissions by 2040, said chief executive Ben Wilson. The commitment comes as the Victorian state government has issued a consultation paper on a road map for the substitution of natural gas as part of its pledge to reach net zero emissions by 2050, and Infrastructure Victoria has a consultation ongoing on the future of gas infrastructure. The momentum and commitment to reach net zero emissions gives the companies that distribute gas to households little option but to adapt or face a slowly dwindling business as new gas connections are halted and they are left with only existing customers. AGIG, owned by Hong Kong infrastructure giant Cheung Kong Group, sees developing options to supply customers with hydrogen and biomethane as the essential way forward to align with both its own corporate net zero targets – approved by its board in early June – and those of governments and stakeholders. AGIG in May became the first utility in Australia – possibly worldwide – to operate a green hydrogen blending project that supplies hydrogen into the gas distribution grid, in a business-as-usual operation rather than as an innovation project. That 5% blend of hydrogen in the gas flow supplies 700 customers in the Adelaide suburb of Tonsley Park, which AGIG wants to expand to a 10% blend supplying thousands of homes. A larger project planned for Albury-Wodonga, which in May secured funding from the Australian Renewable Energy Agency, will supply a 10% green hydrogen gas blend to 40,000 customers, coming online in 2023-24.



Advertising buyers fear continued lockdown measures for the Greater Sydney region will spark a mini revenue crash as marketers will be forced to cancel spending if uncertainty persists. Although the Sydney lockdown, and smaller Melbourne lockdown, have not yet led to a media revenue crash as witnessed in 2020, spending across the greater Sydney market is on a precipice as marketers start to consider cancellations should lockdown measures continue. Referring to the last year’s national lockdown, which sent ad spending in April and May off a cliff, advertising billings had declined more than 40%. Last year, Australia’s advertising market contracted by $1.1 billion as the COVID-19 pandemic crunched spending in the West by $9.9 billion, reversing two years of growth across the US, UK, Australia, New Zealand and Canada.

Australia’s housing market posted its weakest month of growth since January, as declining affordability and waning pandemic stimulus weigh on the stellar gains seen this year. House prices grew at a slower pace in July in every capital city in Australia, even as the nation posted a 1.6% increase for the month, according to data released by CoreLogic. Sydney was hit the hardest, with the monthly capital gain on houses in Australia’s most populous city falling to 2% in July from 3.7% in March. However, low interest rates are still fuelling demand in a market where supply is running more than a quarter below the five-year average. The housing boom, which was led by rapid growth in higher-end dwellings, is slowing as prices in that segment cool. CoreLogic is forecasting the rate of growth will continue to slow in the market overall, with tighter credit policies and an earlier-than-expected rise in interest rates the main risks. Australian house prices are up 14.1% in the first seven months of 2021.


Oil Search agreed in principle to a $21 billion-plus merger deal with Santos after the Adelaide-based company sweetened its offer to combine the two oil and gas producers to create “a regional champion”. The breakthrough comes two weeks after Santos’ original off was unveiled, which Oil Search had refused to engage on as it said it undervalued its assets in Papua New Guinea and Alaska. Investors who had been pushing for Oil Search to engage on a potential deal immediately cheered the major step towards a merger between the pair to create a company that would overtake Woodside Petroleum in production and market value, and be able to better compete in the Asian market.


Ramsay Health Care believes it will get more work as patients flow to the private sector following the ban on non-urgent elective surgery at public hospitals in Sydney. Ramsay, the largest private hospital operator in Australia, has been doing work for NSW public sector over the last six months to help with the backlog following the prolonged ban on non-urgent surgeries in March 2020 as COVID-19 first struck the country. NSW Health on Friday said non-urgent elective surgery would be suspended at public hospitals across Greater Sydney as the state battled the outbreak of the delta variant.


BHP will build new nickel mines and wind farms in Western Australia as it looks to accelerate away from the fossil fuel sector and prove its green credentials to electric car makers. The new mines will help BHP Nickel West boost production in the wake of an agreement to supply Elon Musk’s Tesla that includes targets for reducing emissions in mining and processing. BHP Nickel West is eyeing several locations for a 40-50 megawatt wind farm close to its nickel mining operations in the northern Goldfields of WA. The reborn nickel division said it could also commission a second wind farm to supply power to its refinery at Kwinana south of Perth.

The head of Australia’s largest privately owned renewable energy company has called for the federal government to sign up to net zero as the newly expanded group prepares for a period of huge growth.  Chief executive officer of Powering Australian Renewables (PowAR), Geoff Dutaillis, said it was important to sign up sooner rather than relying on a technology road map as a market signal to decarbonise the economy. He called for the federal government to “put a target on the hill like everyone else,” as he embarks on a large growth phase for the company that will include branching out into energy storage and expanding its considerable 3 gigawatt (GW) wind and solar portfolio. Powering Australian Renewables (PowAR) – a partnership between QIC, the Future Fund and AGL Energy – will become the largest owner of wind and solar generation in Australia, and the largest renewable energy generator after Snowy Hydro, after completing a $2.7 billion takeover of Tilt Renewables on Tuesday. PowAR now owns of all of Tilt’s Australian business, with Mercury NZ taking ownership of all of Tilt’s New Zealand business, following implementation of a scheme of arrangement for the acquisition, approved by Tilt shareholders on 14 July. Mr Dutaillis said the company plans to build out Tilt’s pipeline of projects, focusing on opportunities in the central National Electricity Market, along the eastern seaboard. But he also has an eye on projects in Western Australia.

And that’s it for this week. And next week, 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.

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