Woolworths, Coles, Aldi, and McDonald’s all say Australian customers will be eating homegrown beef.
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/
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 tor 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 or whatever your favourite podcast platform is to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 26 in our series for 2025 and today’s date is Friday August 8.
First, I’ll be talking to I’ll be talking to Tim Bhatnagar, co-founder of Dubai-based Paiverse about how his platform ensures that all luxury NFT’s or non-fungible tokens are free from fraud.These are unique digital assets that represent ownership of the brand. Now a lot of NFTs have drawn large amounts of fraudulent criminal activity. Bhatnagar explains how Paiverse uses Blockchain to ensure the NFTs have a provable provenance and are free of fraud. Now these NFTs seek to be the primary destination for luxury brands to market and for consumers to buy and sell their luxury goods via blockchain technology, in a secure and transparent manner.
And I’ll be talking to Rabobank economist Teeuwe Mevissen about how China’s economy is faring in the wake of the tariff war with the US and tensions with the EU.
But first, let’s talk to Tim Bhatnagar
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So what’s happening in the news?
In the uneven choreography of US-China trade relations, Beijing appears to be executing a tai chi routine stepping back, waiting, and letting the US tire itself out. Because while China’s dominance of global manufacturing remains one of the main drivers of President Donald Trump’s aggressive trade policies, he appears to have saved his fiercest fire for his allies and partners such as Canada, Mexico, India and even Japan. Just over four months ago, he slapped tariffs uof up to 145% on China-made goods, triggering a global market meltdown. Intense negotiations and an interim deal quickly got these down to around 30%, and talks continue for an even better accord. Trump’s rhetoric toward China has also noticeably cooled recently. Gone are the fire-and-brimstone threats of sweeping tariffs on everything. Instead, he is now openly courting China’s President Xi Jinping for a summit and has even floated the idea of visiting Beijing himself – an overture that would have been unthinkable six months ago. Apple chief executive Tim Cook warned during an earnings call last week that US tariffs would add $US1.1 billion in costs over the current quarter, up from the $US800 million in the three months to the end of June. Nor is Apple alone: Adidas, Procter & Gamble, Stanley Black & Decker and other large companies have told investors they either had increased prices or planned to do so soon to offset the tariff costs. Companies such as Walmart and toy makers Hasbro and Mattel had already warned that tariffs would lead to higher prices. “China is watching all the other interactions with America’s trade partners, and they can see the internal stress [within the US] is increasing and increasing,” says David Mahon, an investment manager and adviser based in Beijing. “The longer they wait it out, the Americans will be in an increasingly weaker position. We can already see the tone has shifted towards a more conciliatory one.” That leaves China, which has refused to engage on Washington’s erratic terms. Instead, Beijing is practising what experts call “strategic patience”. While Trump dashes between press conferences and policy reversals, Chinese negotiators have stood still – calculating, waiting, and watching as the US economy bruises itself.
Tesla granted shares to Elon Musk worth nearly $30 billion, the company said on Monday, describing it as a “good faith” award to help retain the car maker’s chief executive after his previous multibillion-dollar pay package was struck down by a judge. The company approved a grant of 96 million shares for Mr. Musk, which he could tap after two years of service in a “senior leadership role” at Tesla. The mercurial billionaire, whose business empire includes rockets, artificial intelligence, brain implants and more, hinted last month that he wanted more shares in Tesla, on top of his 13 percent stake, to prevent his ouster by “activist” shareholders. With the new shares, Mr. Musk would own nearly 16% of Tesla, a stake that would be worth over $150 billion. The package amounts to an extraordinary pay raise for Mr. Musk as Tesla sales and profit are falling, and the company is losing market share, in part because of his behavior. His involvement in right-wing politics has alienated many liberal car buyers who are more likely than conservatives to buy electric vehicles. Mr. Musk is already the world’s richest person, worth about $350 billion, according to Bloomberg. The action by Tesla’s board of directors is likely to fuel criticism that the members, who include several close friends and his brother, are failing to act as a check on Mr. Musk. In a regulatory filing, the board did not impose any conditions besides the one about staying in a senior role. Typically, executive pay is tied to performance goals. The new award will be worth $27 billion to Mr. Musk after taking into account the money he will have to spend to acquire the shares. “None of this is normal,” said Brian JM Quinn, a professor at Boston College Law School. “Like in all things Musk, there is nothing like this.”
Expanding Australia’s goods and services tax, council land rates and the tax on offshore oil and gas would be the most growth-friendly ways to pay for reductions in corporate tax, according to modelling for the Productivity Commission. Among the most economically damaging potential changes would be to raise more government revenue through the existing corporate tax system and from high earners already paying a 47% rate for incomes above $190,000. The previously unreported modelling by independent economist Chris Murphy was commissioned by the Productivity Commission and attached to its report on corporate tax released last week in the lead-up to Treasurer Jim Chalmers’ economic roundtable from August 19 to 21. Murphy is recognised as one of the nation’s leading economic modellers on tax and did similar work for former Treasury secretary Ken Henry’s sweeping tax review in 2009. Fuelled by dozens of submissions and demands from stakeholders and special interest groups, expectations have been growing that Chalmers would use the roundtable as cover to overhaul the economy and implement major policy changes, including to tax, which Labor did not take to the federal election. A 40-page modelling report by economist Murphy lays out the economic cost of various taxes and the impact if they were adjusted. “Per extra dollar of revenue raised, the GST does the least economic harm, followed by personal income tax, followed by company income tax with the most economic harm,” Murphy’s report says of the three largest tax bases. Raising more revenue from local council rates – a form of land tax on the unimproved value of all properties, including the principal place of residence – would also have no negative impact on economic growth. Extending the GST to fresh food would have a low marginal excess burden of only 16%. Raising the 10% GST rate would have a 30% marginal excess burden – still far lower than various income taxes and corporate tax. The excess burden of a tax measures the economic harm from a tax’s disincentive effects, such as on work and investment. It estimates the economic harm from raising an additional dollar of revenue from a particular tax. In contrast, raising more revenue from the existing corporate tax base had a high marginal excess burden of 80% and the top marginal rate had a 76% burden. The 2% Medicare levy on income earners had a marginal excess burden of 36%, and bracket creep had a burden of 32%.
The Australian Council of Trade Unions have a number of demands for Treasurer Jim Chalmers’ economic roundtable on August 19-21. First, it has called for bold changes to negative gearing and the capital gains tax at the government’s productivity roundtable this month, arguing the tax breaks be limited to one investment property. Under the proposal, the current arrangements would continue for five years to allow investors time to rethink their portfolios before the changes come into force. The issue is politically fraught for Labor, who took reforms to negative gearing and capital gains to the 2016 and 2019 federal elections and lost. But ACTU secretary Sally McManus told ABC’s Insiders it was time to “bite the bullet”. “Otherwise, we’re just saying ‘too bad young people, you’re not going to be able to ever own a home’,” she said. “Since 2019, the problem has just got worse. It’s going to continue to get worse unless the government is brave enough.” The ACTU will also demand a minimum 25% tax rate on both individuals who earn more than $1 million a year and family trusts at Treasurer Jim Chalmers’ economic roundtable,along with changes to negative gearing and capital gains tax concessions. The ACTU will also push for a 25% levy on all exported LNG revenue in place of the petroleum resource rent tax (which would raise up to $16 billion a year), as well as a $20 million annual cap on the diesel fuel rebate, a move that would largely affect major commodities companies. The peak union body’s proposed tax measures are the latest in a series of ideas ahead of the summit to increase government revenue.
Australia’s defence recruitment has hit a 15-year high after the federal government began showering more than $600 million on soldiers, sailors and aviators in bonuses and housing subsidies to stay in the military. The government is also easing enlistment standards in preparation for a potential showdown with China. This is not before time. After years of failing to hit recruitment and retention targets, the number of full-time uniformed personnel across the army, air force and navy reached almost 62,000 as of July 1 this year, an increase of almost 3000. Labor is also refusing to buckle – for now – to demands from the Trump administration to lift defence spending by about $40 billion a year to the equivalent of 3.5% of gross domestic product, as part of a pressure campaign on all US allies to lift military budgets to take on a greater share of the security burden amid rising geopolitical tensions with China and Russia. Both the Albanese government and before that the Coalition when it was in power have pledged to increase the size of the Australian Defence Force, which has hovered about 58,000 uniformed personnel. Defence Minister Richard Marles said Labor inherited a recruitment crisis. And they’re using innovative ways to recruit. Between 2023 and 2028, the government will spend almost $570 million on continuation bonuses to keep personnel in the military after four or seven years of service. The bonuses are worth $40,000 each, and the government says 5778 personnel have taken up the bonus, including 2306 who had been undecided about staying in the military or intended to leave. Changes have also been made to improve the so-called “value proposition” for servicemen and women. These include expanding the Defence Home Ownership scheme so people can receive help to buy a house earlier in their military career and trialling earlier eligibility for rent assistance. Budget papers show the government spending an extra $88 million on defence housing over the next three years. These changes have helped reduce the separation rate, where people leave the Defence Force, from 11.2% in 2021-22 to 7.9%, the lowest in a decade and defying a tight labour market where ex-military personnel with a trade can usually find work in the private sector easily. Defence is always one of the biggest advertisers in Australia and spent just over $63 million on commercials and market research last year. It has skewed more of its funding towards digital advertising, social media and in-game ads to reach younger audiences, who are less likely to engage with traditional formats such as commercial television. Last year, Defence published its first video advertisement on TikTok – a platform that public servants are banned from using on government-issued devices – with the clip promoting life as a submariner viewed 840,000 times, a record for a social media platform. Another change has been a relaxation of recruitment standards – conditions such as acne are no longer a bar to enlistment.
The local chief executive, Matt Bacon, of British middle-market insurance giant Howden says as many as 70% of the country’s businesses are underinsured. Bacon said one of the biggest insurance issues raised by his clients was the threat of cyberattack, after an uptick in high-profile incidents, including breaches at Optus and Medibank Private over the past few years. Australia is the fourth most targeted nation for cyberattacks, according to American firm Nozomi Networks. Threats against manufacturing, mining and minerals companies are particularly on the rise. “Ten years ago, we weren’t really talking about cyber and now cyber is a major discussion point in pretty much every board table,” Bacon said.
Woolworths, Coles and McDonald’s say they will not nor import US beef following Australia’s loosening of biosecurity restrictions. In a contentious move, the federal government has allowed Canadian and Mexican cattle killed in the US to be imported into Australia. Following the change to this 20-year policy, the Trump administration slapped Australia with the lowest of its universal tariff rates, applying a 10% levy on Australian exports. Despite the North American beef now allowed to land in Australia, consumers are unlikely to see much US beef on supermarket shelves or in fast-food restaurants. Aldi, Coles, McDonald’s and Woolworths all say Australian customers will be eating homegrown beef. “We apply an Australia-first approach, and 100% of our fresh red meat is sourced directly from Australian farmers, with whom we have longstanding relationships,” a Woolworths spokesperson said. “We have no plans to change that approach.” Spokespeople for Aldi and Coles say there are no plans to change from 100% Australian beef. Some 80 million kilos of beef are dished out by the Golden Arches each year, and McDonald’s too says it will not be buying from North America.
And it’s the profit reporting season. Argo Investments’ net profit for the year to June 30 rose to $259.8 million, up from $253 million a year earlier. Credit Corp reported a net profit after tax increase of 16% to $94.1 million above the prior year’s NPAT of $81.2 million. Reckon reported a 35% increase in net profit after tax of $4 million. Pinnacle Investments reported a net profit after tax of $134.4 million, up 49% from $90.4 million in the prior financial year A record year at REA Group and Dow Jones drove an increase in revenue and earnings for Rupert Murdoch’s News Corp, which on Wednesday morning delivered its first full-year results since selling pay TV firm Foxtel. News Corp posted $US8.5 billion (A$13.1 billion) in revenue for the year to June 30, up 2%, and earnings before interest, taxation, depreciation and amortisation of $US1.42 billion, up 14%. Murdoch’s REA Group’s reported net profit jumped by 124% to $678m. Real estate investment trust BWP Trust which manages commercial properties like the Bunnings chain reported that mooring inflation, stabilising interest rates, and resilient demand for large format retail property helped Bunnings Warehouse sites deliver a 47% jump in net profit to $265.6m. Charter Hall Long WALE REIT reported operating earnings of $178.6 million.
And that’s it for this week. And next week, I’ll be talking to Bob Huber, Chief Security Officer and Head of Research at Tenable who will talk about prevalence of AI-generated deepfakes and recent findings that highlight their ability to sway voter opinions and distort political narratives, and the specific tactics deepfake creators can employ to target Australian voters. From a business perspective, deepfakes are increasingly dangerous in swaying consumer trends and corporate reputation.
And I’ll be talking to EY economist Cherelle Murphy about the potential of the Reserve Bank of Australia cutting interest rates.
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
