RBA hikes rates and foreshadows more
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 www.businessacumen.biz.
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.
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 1 in our series for 2026 and today’s date is Friday February 6.
First, I’ll be talking I’ll be talking to Elise Balsillie, Head of Thryv Australia and New Zealand. Thryv has been supporting the small business economy in Australia and helping them navigate the complexities of marketing and growing their business. We’ll talk about the challenges facing small business in 2026 like staffing and service, and the opportunities like AI.
And I’ll be talking to independent economist Saul Eslake about the outlook for the Australian and global economies in 2026.
But first, let’s talk to Elise Balsillie
So what’s happening in the news?
Let’s start with Amazon — and what might be the most expensive case of corporate throat-clearing we’ve seen in a while. Amazon’s documentary about Melania Trump is on track to pull in about $8 million in its opening weekend across the US and Canada. That’s actually a solid number — it’s the best documentary opening in 14 years, if you ignore concert films. So on paper? A win. But scratch the surface and it gets… uncomfortable. Amazon reportedly paid $40 million just for the distribution rights, then threw even more money at marketing. After theatres take their cut — roughly half — Amazon walks away from opening weekend with about $4 million. Which is not quite the victory lap Jeff Bezos might’ve hoped for. What’s interesting is where the money came from. Nearly half the ticket sales were from rural cinemas, Republican counties overperformed, and the biggest states were Florida, Texas and Arizona. The audience? Overwhelmingly female, over 55, and very clear about why they were there. One bloke in Staten Island said he barely goes to the movies anymore — but bought a ticket to “send a message to the liberal movie industry”. At another screening, people applauded when Trump was sworn in. Someone yelled out “Trump 2028”. So this wasn’t just a documentary. It was a political statement — with popcorn. Amazon will eventually push the film onto Prime Video, where it’ll probably get decent streaming numbers. But given how wildly it outspent every other bidder — by $26 million — the question hangs in the air: Was this really about content…
or was it about currying favour with Donald Trump? Especially awkward timing, too — this all coincided with 16,000 Amazon layoffs, on top of 14,000 already gone. Nothing says “brand confusion” quite like mass redundancies and a gold-plated political documentary.
So here’s the big story out of Washington. President Trump announced on Sunday that he plans to shut down the Kennedy Centre for the Performing Arts for two full years, starting this summer. The goal, he says, is to completely overhaul what he called a “tired, broken, and dilapidated” institution and turn it into what he promises will be the finest performing arts facility of its kind. The shutdown would begin July 4, lining up with the nation’s 250th birthday — and Trump says closing the doors is the only way to rebuild faster and better, without interruptions from audiences and events. But this announcement comes after months of turmoil. Since returning to office, Trump has made remaking the Kennedy Centre a high-profile project of his second term — attaching his name to it, installing loyalists to run it, and pushing for programming he says better reflects “mainstream American tastes.” His now-famous line: more Les Mis, less Hamilton. The reaction from the arts world has been swift and brutal. Major performers like Philip Glass and Renée Fleming have pulled out, the Washington National Opera has cut ties altogether, and attendance at the National Symphony Orchestra is reportedly down about 50% compared with last year. Trump didn’t mention any of that in his announcement. Instead, he framed the shutdown as part of a broader effort to “rebuild Washington,” alongside other controversial construction projects. He says funding has been secured, though he hasn’t said how much the renovation will cost or exactly where the money is coming from. Democrats in Congress are now pushing back hard, questioning whether the president even has the authority to shut the Kennedy Centre without congressional approval — and accusing him of using renovation as a cover for what they call a financial and cultural disaster. Meanwhile, many Kennedy Centre staff say they learned about the closure the same way everyone else did: through Trump’s social media post. In short, what was once one of the busiest performing arts centres in the country — hosting more than 2,000 events a year — is now headed for a two-year blackout, with big questions still unanswered about artists, employees, funding, and what the Kennedy Centre will look like when — or if — it comes back.
Now, this next story is one of those where Australia pops up in a global scandal and you go, wait — we’re part of this? Former Trump strategist Steve Bannon has been boasting — privately — that he helped persuade Clive Palmer to bankroll the massive advertising blitz during the 2019 federal election. We’re talking $60 million worth of anti-China and anti-climate ads — still the most expensive political ad campaign in Australian history. Where did this come out? In messages uncovered during a US investigation into Jeffrey Epstein’s communications before his death. Yes. That Jeffrey Epstein. In one exchange, Bannon tells Epstein he had Palmer fund the campaign. Epstein responds by arguing that traditional politics is dead — polls don’t work, national borders don’t matter, and the future is global populist movements. Bannon replies: “Yes, that’s the objective. Next stop Kazakhstan.” Which is… chillingly casual. The takeaway here isn’t just that Palmer spent big — we already knew that. It’s that Australia was being discussed as part of a broader international experiment to disrupt democracy, climate policy, and mainstream political institutions. Not a sideshow. A proving ground. And it adds an uncomfortable global context to an election that, at the time, many Australians just thought of as noisy and weird.
Australia’s central bank has pulled off a genuine surprise — lifting interest rates for the first time in two years. The Reserve Bank has hiked the cash rate by 25 basis points to 3.85%, saying the economy is running hotter than expected and inflation is proving more stubborn than hoped. That puts the RBA in a pretty exclusive club — along with the Bank of Japan — as one of the only major central banks still tightening policy. That’s a big contrast to markets overseas, which are still betting on rate cuts in the US, the UK and Canada, and a long pause from the European Central Bank. The decision was unanimous and comes just six months after the RBA last cut rates. Inflation has surprised to the upside for two quarters in a row, unemployment is at a seven-month low, and the bank says private demand and capacity pressures are stronger than expected. The board’s message was pretty clear: inflation is likely to stay above the 2 to 3% target for some time — and that may mean higher rates are needed. But Governor Michele Bullock was careful not to offer any forward guidance. She said she genuinely doesn’t know whether this is the start of a new hiking cycle. In her words, financial conditions might now be around neutral — but it’s “not clear one way or another.” And she stressed she’s not making predictions about what comes next. What is clear, she said, is that the RBA doesn’t want high inflation to become entrenched. Bullock also acknowledged the pain for mortgage holders. She said she understands rising rates are tough — but warned the alternative could be worse. If inflation stays high, she said, people feel it every time they buy groceries, pay for services, or walk into a shop — prices just keep climbing. Markets are already pricing in nearly an 80% chance of another hike in May, with about 40 basis points of tightening expected this year. What’s interesting is the shift in tone. The RBA had been more cautious than global peers, cutting rates last year to protect jobs. But with consumer spending strong, house prices at record highs, and credit still flowing, policymakers are now questioning whether financial conditions are restrictive at all. Economists say the risk now isn’t a one-off hike — it’s a series. And with underlying inflation still well above target, even the RBA seems to think the road back to price stability could be a long — and winding — one.
.Let’s switch gears to housing — and a story that screams “how did this not blow up earlier?” A secret Deloitte review of Housing Australia found the rollout of Labor’s $10 billion Housing Australia Future Fund was… high risk. Very high risk. The review said the entire operation relied almost entirely on one person — the chief of staff — who was coordinating tenders, overseeing assessments, managing records, and communicating with stakeholders. Deloitte’s blunt conclusion? If she became unavailable, the rollout would likely fail. That’s not a resilience strategy. That’s a single point of failure. The review also raised red flags about governance. The agency chair was attending meetings of what was supposed to be an independent audit and risk committee. Deloitte warned that the line between board oversight and management was, at times, unclear. Translation: Too many hands on the wheel — and not enough separation between who’s running the program and who’s meant to be policing it. The kicker? The report was shown to the board… and then quietly buried. It was never released publicly and never circulated to senior executives. Which is exactly how you don’t want a $10 billion housing policy run — especially during a housing crisis.
And then there’s superannuation — where the word “trust” is doing a lot of heavy lifting right now. The Australian Financial Complaints Authority says nearly 11,000 Australians have lost around $1.2 billion through the Shield Master Fund and First Guardian scandals. Both involved money being funnelled into illiquid, unusual investment products — and now ASIC is taking legal action. AFCA’s investments and advice ombudsman, Shail Singh, called these some of the most significant financial failures in years. But he also pushed back against scrapping the Compensation Scheme of Last Resort, arguing it still has to exist. His message to the industry was blunt but hopeful:
This is a chance to reset.
Better oversight.
Stronger advice processes.
Clearer communication.
Earlier intervention.
And with the Albanese government looking at law changes, 2026 could be a real turning point — if the sector actually learns the lessons this time. Because if there’s one thing super funds cannot afford to lose again… it’s trust.
Now, a big issue brewing in education and disability policy. Labor is being warned that teachers and school support staff simply can’t be expected to quietly absorb the workload from a new program aimed at autistic children who’ll no longer be covered by the NDIS. The program’s called Thriving Kids. It’s a $4-billion scheme, funded jointly by the Commonwealth and the states, and it’s meant to pick up support for children with mild to moderate autism — kids who’ll soon be ruled ineligible for the NDIS. But unions are already sounding the alarm. They say unless this comes with more staff and better pay, the whole thing risks falling over before it really gets going. United Workers Union national public sector director Demi Pnevmatikos has warned the scheme would pile extra workload, complexity, and even safety pressures onto school support staff — people who are already stretched thin. Her point is simple: you can’t just shift responsibility from one system to another and hope schools magically cope. Far more workers would be needed to meet demand. Now, this comes after a string of multi-billion-dollar pay rises across the care sector at both state and federal levels. That’s raising some nervous eyebrows in Treasury, with concerns that further wage rises under Thriving Kids could push Australia’s already eye-watering $250-billion public sector wage bill even higher. At the same time, Thriving Kids is central to Labor’s plan to rein in the NDIS. The government’s argument is that unless the scheme refocuses on people with the most acute disabilities, costs could blow out to $100 billion a year. Here’s the awkward bit: there are still no detailed costings or modelling publicly available. Even a confidential advisory report handed to governments back in December didn’t include them. And on Sunday, Health Minister Mark Butler admitted he couldn’t yet say how much last week’s disability and health reforms would save taxpayers — because, in his words, those budget decisions simply haven’t been made. State governments, meanwhile, are growing increasingly uneasy. They’re staring down a pipeline of major disability reforms over the next two years — from tighter NDIS eligibility rules to changes in how much states contribute — and a lot of moving parts still don’t quite add up. So yes, the goal might be to fix a broken system. But right now, plenty of people on the frontline are asking a pretty basic question: who’s actually going to do the work — and who’s going to pay for it?
The government is quietly reopening the door on one of the most sensitive tax debates in Australia — the 50% capital gains tax discount for property investors — as it heads toward what Anthony Albanese is calling a major reform budget in May. Treasurer Jim Chalmers says the government’s big focus remains housing supply, but he’s also been clear that intergenerational fairness is driving the next phase of tax reform. Behind the scenes, Treasury has already examined changes to the CGT discount, and economists, the Greens, unions and welfare groups are all backing a rethink. Negative gearing and the family home remain off-limits, making the CGT discount the most likely target. Introduced in 1999, it halves the tax on profits from assets held longer than a year — a concession many argue now fuels inequality in the housing market. Whether it’s trimmed back, targeted at property, or redesigned altogether, this debate is clearly back on the table.
Business groups are warning the Albanese government that high public spending is keeping inflation elevated and increasing the risk of another interest rate rise. The Australian Chamber of Commerce and Industry says federal spending needs to be cut by more than $50 billion a year and pulled back to pre-COVID levels, pointing to areas like the NDIS, childcare, aged care, health and defence. That warning comes as most economists expect the Reserve Bank to lift rates by 0.25%, which would make Australia the first advanced economy outside Japan to begin a new rate-hiking cycle. Some economists say the RBA could pause, with the stronger Australian dollar helping to slow the economy. But Treasury expects spending to remain around 27% of GDP — the highest level since the mid-1980s outside the pandemic. Economists argue that level of spending is adding to inflation by forcing the public and private sectors to compete for workers and resources. With underlying inflation at 3.4%, well above the RBA’s 2–3% target, the pressure on the central bank is clearly building.
Treasurer Jim Chalmers has announced Sarah Court will become the next chair of ASIC when Joe Longo’s term ends in May. Court has been ASIC’s deputy chair and chief enforcer since 2021 and will be the first woman to lead the regulator in its 35-year history. Chalmers says she has strengthened ASIC’s enforcement capabilities. Longo welcomed the appointment, saying the regulator will be in safe hands
. So to wrap it all up — it’s been a week where money, power and politics collided hard. Amazon spent big on a Melania Trump documentary that looks less like content and more like political positioning. Donald Trump is moving to shut the Kennedy Centre for two years, triggering an arts-world backlash and serious questions about authority and intent. We learned Australia was a testing ground for global populist tactics during the Palmer election blitz. Closer to home, the RBA surprised everyone with a rate hike, housing policy was exposed as fragile behind the scenes, trust in super took another hit, disability and education reforms are already straining frontline workers, and the government is quietly reopening the CGT tax debate — all while business warns public spending may be keeping inflation alive. Big reforms, big risks — and plenty still unresolved.
And that’s it for this week.
And next week, 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?
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.
