The Reserve Bank of Australia has issued the bleakest-ever outlook for economic growth, forecasting just 1.6% growth over the year to June 2028.
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 2 in our series for 2026 and today’s date is Friday February 13
First, I’ll be talking to Tamsin Jones, an expert in Women’s leadership, an advocate for equity in boardrooms, a strategic advisor and she is currently the Head of Programs at Small Giants Academy. Tam is leading the Mastery of Business and Empathy program — a 10 month MBA alternative that puts empathy at the heart of leadership, business and economics.
And I’ll be talking to AMP Capital chief economist Shane Oliver about the outlook for markets and the economy after the RBA hiked rates. Can we expect more hikes?
But first, let’s talk to Tamsin Jones
So what’s happening in the news?
We’re starting with a sobering reality check from the Reserve Bank. The RBA has just released its worst medium-term growth forecast in history—expecting the economy to grow by just 1.6% through to 2028. To put that in perspective, that’s a weaker outlook than we saw during the 90s recession or the GFC. Economists are warning that if the “economic pie” doesn’t grow, our living standards will stall. It also creates a massive headache for the Budget, as lower growth means less tax revenue hitting the government’s coffers. This growth downgrade has sparked a firestorm in Canberra. On one side, Governor Michele Bullock confirmed that government spending is linked to inflation and interest rates. On the other, PM Anthony Albanese and Treasurer Jim Chalmers are digging in their heels, insisting their management is “responsible” and pointing to three rate cuts last year as proof of their track record.
Speaking of May, Jim Chalmers is already flagging a three-pronged strategy to fix the mess: Spending cuts, a “productivity package,” and potential tax reform. The goal here is to “lift the speed limit” on the economy. The Treasurer is trying to balance the books while the Opposition argues that public spending is growing faster than the private sector, essentially fueling the very inflation the RBA is trying to kill.
If you felt like the shops were a bit ghost-townish in December, the data officially backs you up. Australian household spending took a breather after a massive spring splurge. Spending dropped 0.4% in December. It turns out we did all our damage during the October and November sales events. While we pulled back on clothes and gadgets, the “volumes” were still solid enough to keep the RBA on edge. Last week, the RBA hiked rates to 3.85% because inflation is still being stubborn—heading toward a projected 4.2% by June.
- The Bottom Line: We’re in a “good news is bad news” cycle. The economy is robust, and house prices are at record highs, but that’s exactly why the RBA is leaning on the brakes. Swaps are already pricing in a 74% chance of another hike in May, so keep your belts tightened.
Labor’s $10 billion flagship housing program is facing a bit of a “reality vs. expectations” problem. Two years into a five-year plan, they’ve hit just 2% of their 40,000-home target. Only about 900 homes are actually finished. The agency in charge, Housing Australia, is under fire for poor governance and a “rushed” start, but they’re promising that completions will triple this year as more projects move from the planning board to the job site. To speed things up, they’re leaning more into “turnkey” projects—basically buying finished builds from developers—rather than building from scratch.
- The Bottom Line: There’s a looming debt trap here. Some providers are worried that the way these deals are structured will leave them with a 90% debt burden in 25 years, which might force them to sell the “affordable” homes just to pay back the loans. It’s a classic case of solving today’s supply crisis by potentially mortgaging the future.
In a move that’s flown slightly under the radar, the government has quietly slapped 10% tariffs on Chinese steel products. They’re calling it a “trade defense” against unfair subsidies that undercut local makers like BlueScope. The risk? China has already warned this could hurt our iron ore exports. It’s a delicate balancing act: protecting Aussie manufacturing jobs while trying not to reignite a trade war with our biggest customer.
And then, a look at the “business machine” that is the NDIS. In places like Liverpool in Sydney, NDIS providers now outnumber restaurants and barbers. We’re talking about one provider for every 1,250 residents. While the scheme provides vital support, it’s now costing over $50 billion a year—more than Medicare. Even Labor’s own MPs are calling it “unsustainable,” describing a “gold rush” mentality that has attracted some fraudulent operators. Reining this in without hurting genuine participants is looking like the government’s toughest challenge for 2026.
Turning to some pretty sobering news at home—the ACCC has just dropped a 40-page bombshell on the $50 billion National Disability Insurance Scheme. We’ve known the NDIS was facing budget pressure, but this report highlights a level of ‘systemic exploitation’ that’s honestly hard to stomach. The watchdog found that price-gouging, rorting, and outright scams are now rife within the scheme. We’re talking about:
- Phantom Billing: Charging for hours never worked or services never delivered.
- False Advertising: Providers claiming things like overseas holidays, cruises, and massage chairs are ‘NDIS approved’ when they absolutely aren’t—leaving vulnerable participants like ‘Joan,’ a case study in the report, stuck with $5,000 bills and no way to get a refund.
- Predatory Contracts: Cancellation fees so high they’re essentially traps, and in some cases, providers refusing to repair essential gear like broken electric wheelchairs.”
From a business perspective, the scale is staggering. The NDIS now costs more than Medicare and is on track to overtake defense spending. While there are 16,000 registered providers doing the right thing, there are over 150,000 unregistered operators in this space. Even the property sector isn’t immune—investors are getting burned by disability housing built in areas where no one actually wants to live. ACCC Deputy Chair Catriona Lowe didn’t mince words, saying this isn’t just about financial loss—it’s compromising the actual physical safety of the 751,000 Australians who rely on the scheme. While the ACCC has issued some fines and launched a task force, many are asking if $118,000 in penalties is enough of a deterrent for a $50 billion industry where the ‘Wild West’ mentality seems to have taken root.
Next up, the federal government is finally moving to close the loopholes in Managed Investment Schemes—or MIS—and it’s a move sparked by some truly devastating losses. We’re talking about the collapse of the Shield and First Guardian Master Funds, which saw 12,000 Australians lose a staggering $1 billion.” Assistant Treasurer Daniel Mulino isn’t pulling his punches here. He points out that when these funds lack transparency, they aren’t just risky; they stop being productive for the economy. In the case of Shield and First Guardian, the people running the funds were also the ones making the investment decisions and shifting money between ‘related parties.’ That’s a massive conflict of interest. To give you an idea of the damage: liquidators for First Guardian have recovered just $1.6 million out of $550 million. That is a heartbreaking result for retail investors.”
The Proposed Fix “So, what’s on the table? The government’s new consultation paper suggests three big shifts:
- External Oversight: Funds would be forced to appoint a majority of external directors to their boards to break up those ‘in-house’ cozy deals.
- No More Related-Party Trades: There would be a near-total ban on transactions between the fund and its own directors’ other businesses.
- Stronger Teeth for ASIC: Outgoing ASIC chair Joe Longo famously warned that the bar to start a fund is currently so low it practically doesn’t exist. These reforms would give the regulator more data and require super trustees to report ‘suspicious patterns’ of behavior before the money vanishes.”
The government is essentially trying to restore trust. As Dr. Mulino put it, these collapses make people nervous about investing in anything, which hurts the whole market. If you have thoughts on this, the consultation is open until February 27th.
Alright, let’s talk about a major leadership shakeup in the healthcare sector. Australian giant CSL has just announced that CEO Paul McKenzie is stepping down, effective immediately. This isn’t your typical ‘pursuing other interests’ departure. The timing is incredibly blunt—it comes just one day before CSL reports its latest earnings. Taking the reins in the interim is Gordon Naylor, a former senior exec and board member who says he has no intention of ‘taking a backseat’ while the company hunts for a permanent successor. So, why the sudden exit? Chair Brian McNamee didn’t mince words on a call with analysts. He basically said the board realized McKenzie didn’t have the specific skill set required for CSL’s next chapter. The board is clearly frustrated. They’re looking at a stock that tumbled 39% in 2025—marking its fourth straight year of decline. Between a messy post-pandemic recovery, volatility in the US flu-vaccine market, and lingering questions over their $11.7 billion Vifor acquisition, investors have been losing patience.” Despite the chaos, McNamee insists the core strategy isn’t changing; the problem is execution. Here’s the roadmap for the interim period:
- Simplification: The business has become too complex. Expect a push to trim the fat.
- Urgency: After laying off 15% of staff last year and scrapping a plan to spin off the Seqirus vaccine business, the board wants results now.
- Commercial Focus: While the plasma business is doing well, they need the rest of the portfolio to start pulling its weight to restore shareholder value.”
The market’s reaction? Not great. Shares closed down 5% on the news. By announcing this a day before results, the board is trying to clear the air so the focus stays on this week’s numbers —but all eyes will definitely be on Gordon Naylor to see if he can actually spark that ‘transformation’ he’s promising.
And it’s the profit reporting season. Commonwealth Bank has reported a cash profit of $5.4 billion for the half-year, backed by loan and deposit growth as the economy strengthened. This was up 6% on the first six months of last financial year, and ahead of expectations. Australia’s bluest chip CSL posted an underlying profit of $US1.9 billion for the six months to December 31, down 7%, while reported profit fell 81% to $US401 million after one-off restructuring costs and impairments. Its revenue slipped 4% to $US8.3 billion. AGL Energy posted a 6.4% dip in first-half benchmark profit amid softer profits from its core electricity and gas retailing business. Underlying net profit after tax, which excludes one-time items, slipped to $353 million in the six months ended December 31, down from $377 million a year earlier. SGH, the industrial conglomerate controlled by the billionaire Stokes family, delivered a statutory net profit after tax which was up 1% to $473 million for the first half of 2025-26. Southern Cross Media said Seven West Media’s first-half FY26 results were in line with guidance given at the November annual meeting, with EBITDA of $67 million, down 27% on the prior corresponding period, and revenue of $712 million, down 2.1%. The update follows Southern Cross’ acquisition of Seven on January 7. Software company Bravura Solutions posted $25.9 million in cash profit for the six months to December, up $14.6 million from a year ago. Evolution Mining’s profits have doubled year-on-year amid the surge in the gold price. The company reported underlying profits of $785 million in the first half of FY26, up from $385 million the year before. Arena REIT reported net operating profit of $39 million for the half year ended December 31. National Storage REIT reported $73.7 million in profit after tax in the first half of fiscal 2026, down from $87.9 million a year ago. HomeCo Daily Needs REIT reported first-half funds from operations of 4.4¢ per unit, up from 4.3¢ a year earlier, and held distributions steady at 4.3¢ per unit. James Hardie Industries reported third-quarter net sales of $US1.2 billion ($A1.7 billion), up 30%, as the building products group delivered margin expansion and moved ahead of schedule on cost synergies. Argo Investments has reported a half-year profit of $130.8 million, up from $121.2 million last year. Automotive manufacture and imports company Amotiv reported 3.3% revenue growth to $520.5 million for the half year, while statutory net profit jumped 39.4% to $46 million due to lower significant items. Underlying EBITA rose 1.3% to $98.3 million, with margin pressure in 4WD partly offset by benefits from the Amotiv Unified cost program and pricing actions taken during the period. Shopping centre operator Region Group has upgraded its earnings outlook for the 2026 fiscal year, lifting forecast funds from operations to 16.0¢ per security from 15.9¢, implying 3.2% growth on FY25. Adjusted funds from operations guidance was raised to 14.1¢ per security from 14.0¢, representing growth of 2.9%. Seek said that it will record a $356 million post-tax impairment on its Zhaopin investment in the fiscal first half, reducing the carrying value to $182 million as of December 2025 from $529 million as of June 2025. Childcare operator G8 Education expects to book a non-cash goodwill impairment of about $350 million in its full-year results, citing weaker occupancy, cost pressures and tougher sector conditions. The company said the charge will not affect its FY25 EBIT (lease-adjusted) guidance of $91 million to $98 million and will not breach lender covenants.
It’s been a week of sobering reality checks. We’re facing the RBA’s weakest growth forecast in history, a fresh rate hike to 3.85%, and a “good news is bad news” cycle where economic resilience only invites more pain at the bank.
The Key Takeaways:
- Systemic Failures: From the NDIS “Gold Rush” to the $1 billion collapse of Managed Investment Schemes, the “Wild West” of unregulated sectors is finally meeting a federal crackdown.
- Corporate Shakeups: CSL is hunting for a new leader after a brutal 40% stock slide, while the rest of the market delivers a mixed bag of earnings—CBA is thriving, but retail and childcare are feeling the squeeze.
- Policy Pressures: Between 10% steel tariffs on China and a housing plan hitting just 2% of its target, the government is struggling to balance the books without mortgaging the future.
And that’s it for this week.
And next week, I’ll be talking to Andrew Binns, CEO of the Australian Communities Foundation. We’ll talk about its research showing why only one in four not for profits feels financially stable.
And I’ll be talking to RMIT economist Sinclair Davidson about Australia’s economic outlook and the Budget challenges ahead for Treasurer Jim Chalmers.
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
