NAB predicts Australia will be flirting with recession in 2023.  

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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 04 in our series for 2023 and today’s date is Friday February 24.

First, I’ll be talking to Michael Chetner, Head of Zoom Australia & New Zealand, about the new Zoom Virtual Agent, an intelligent Conversational AI and chatbot solution, to help businesses connect and communicate with their customers at scale in a more efficient way. And I’ll be talking to Indeed economist Callam Pickering about the latest unemployment figures.

But now, let’s talk to Michael Chetner

Need legal information or legal advice? Today’s podcast is brought to you by Multi-Award Winning Law firm McDonald Legal, experts in the areas of Dispute Resolution and Commercial and Property Law. For a free consultation on your legal matter, McDonald Legal can be reached on 03 9070 1107 or by visiting the website

So what’s happening in the news?

The National Australia Bank’s economics team now has the Australian economy coming to a virtual standstill by mid-year. Australia will be flirting with recession. On GDP, we see the quarterly rate of growth slowing to around 0.1% in mid-to-late 2023,” the team noted. Over the calendar year, the NAB sees Australia’s economy muddling along before demand picks up a little next year. “That sees through the year growth slow to just 0.7% in 2023 and 0.9% in 2024 before around trend growth of 2.2% in 2025.” That relies though, in the NAB’s view, on the Reserve Bank easing monetary policy, or cutting interest rates, early next year.

Superannuation tax concessions worth $53 billion could be overhauled by Treasurer Jim Chalmers in an attempt to repair the budget bottom line, as the government moves towards blocking early access to retirement savings. Chalmers said while the government’s immediate focus was on enshrining a definition for superannuation, that was not the end of the conversation about a sustainable future for the industry. Tax concessions on super are forecast to cost the budget $52.6 billion in 2022-23, just under the total cost of the age pension at $55.3 billion, according to an analysis of the October budget by the Australia Institute. On Monday, the treasurer opened a consultation on a definition of superannuation that would be enshrined in legislation. The government has suggested that the objective of superannuation “is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”. The “preservation of super” was to ensure superannuation contributions should not be accessed unless as retirement income, it said. Australians have about $3.3 trillion in superannuation, and legislating what that money can be used for was a Labor election promise. It has been critical of the Morrison government’s early pandemic policy that allowed Australians suffering financial hardship to withdraw up to $20,000 from their super, as well as a Coalition policy that would give first-home buyers access to up to $50,000 of their super.

 Homes and businesses in every state on Australia’s eastern seaboard are at risk of electricity shortages from 2027 as looming closures of several coal-fired power stations collide with delays in building crucial new gas and clean energy projects to replace them. In a new report released on Tuesday, the Australian Energy Market Operator (AEMO) warns “material changes” to its expectations of available power supplies over coming years in Victoria, South Australia, NSW and Queensland have reinforced the urgent need for new generation plants and other key infrastructure to be approved and rolled out. Up to five-coal fired power stations, including the Yallourn generator in Victoria’s Latrobe Valley, NSW’s Liddell, Eraring and Vales Point power plants, and Queensland’s Callide B, are expected to shut down this decade, removing 13% of the east-coast grid’s generating capacity. Gaps in the market begin to emerge from 2025, AEMO warns – first in NSW due to Origin Energy’s possible closure of Eraring, then in Victoria from 2026 because of the closure of two gas-fired power stations in South Australia. The forecast gaps will continue to widen until all mainland states connected to the east-coast grid are forecast to breach their “reliability standard” from 2027 onwards. The reliability standard is a requirement for at least 99.998% of forecast customer demand to be met each year. AEMO’s updated reliability forecasts factor in AGL’s decision to bring forward the closure of its 800-megawatt Torrens Island gas-fired power station in South Australia by several years to 2026; a one-year delay to the construction of the Snowy Hydro 2.0 pumped hydro project in NSW to 2026; and a year-long delay to the Kurri Kurri gas-fired power plant in NSW to 2024.

The number of standalone houses starting construction is set to plummet by 21% this year and to their lowest level in a decade next year, according to HIA forecasts, as rising interest rates dent demand. By 2024 housing starts are forecast to fall to 96,310, the first time the annual tally is expected to dip below 100,000 in more than 10 years, marking a rapid slowdown  from the 149,000 starts achieved in 2021 when detached housing boomed off the back of the federal government’s HomeBuilder grant. The HIA is expecting detached housing starts to recover in 2025, albeit at a slow level, to 97,820 before climbing to 105,179 in 2026.

Universities have short-changed their staff by a conservatively estimated $83 million over the past few years with some casuals being underpaid the equivalent of a house deposit. At least 23 universities and colleges have publicly admitted to underpaying casual staff with the National Tertiary Education Union estimating a total wage deficit of $83,363,141 in a new report. The figure is almost certainly higher than the NTEU’s estimate. The University of Melbourne, for instance, admitted in an email to staff last week that it was in the process of back paying $45 million. The NTEU had calculated the figure to be around $32 million. Melbourne is the worst offender, with two unresolved cases before the Federal Court. But Sydney University, RMIT, Monash, Newcastle and Charles Sturt all have been found to have underpaid staff by nearly $5 million or more.

Consumer confidence increased by 2.3 percentage points last week to 80.4 after a cumulative fall of 8.7 points over the previous two weeks, according to an ANZ-Roy Morgan survey. But at 80.4, the consumer confidence index was still among the worst 10 results in the 150 weeks since the initial COVID-19 outbreak in Australia.

Executives at REA, the parent company of, have asked staff to go into “negative leave” in an effort to reduce costs – a worrisome omen for the rest of Australia’s media and advertising industry. The ASX-listed digital real estate powerhouse has been a significant profit-maker for shareholders and a breakout success story for News Corp, which owns 61% of the company. But REA announce this month that profits at the company were down 9% in the last three months of 2022, driven mainly by a huge decline in property listings off the back of rising interest rates. REA chief executive Owen Wilson publicly said the company would not be part of a 5% reduction in headcount at News.

 A group of the nation’s biggest carbon emitters say they can slash their carbon emissions by 92% by 2050. In a major report after three years’ work by a large range of key players including the CSIRO, capital managers AustralianSuper, industry groups like AiG, and BHP, BlueScope, Orica, Wesfarmers Chemicals and Woodside Energy among others, the group found industry can evolve to survive in a near zero-carbon future. They found that the five major national supply chains that supply iron and steel, aluminium, other metals, chemicals, and LNG – generating around 44% of total national emissions, 17% of GDP, and $236 billion in exports – could reduce annual emissions from 221 million tonnes of CO2 in 2020 to just 17 million tonnes in 2050. The group’s most eye-popping estimate is that the 30-year heavy industry transition needs about $20 billion a year to modernise industrial regions and energy systems, and could generate 1.3 million jobs. If successful, Australia will not only decarbonise its industry, but may see an expansion in sectors like steel and iron, where production could rise by up to 20% by 2050. Alumina production could double, while lithium could leap more than 15-fold. By contrast, LNG production is expected to fall by 80% around 2040 onwards as the big north-Asian economies shift off fossil fuels.

Commonwealth Bank has created a watchlist of at-risk companies, including across the construction, retail and commercial property industries, and assembled a war chest of provisions to prepare for an economic downturn. The bank’s business group executive, Mike Vacy-Lyle, said the lender was preparing for the worst when it put aside an additional $231m in loan impairment provisions in its latest set of results. That took the unit’s total provisions for loan losses to $263m.  Mr Vacy-Lyle noted that, while it had been “a particularly good ­environment” for the business bank in recent years, with unprecedented economic support and low rates keeping many small and medium operations out of insolvency, that was expected to change.  Mr Vacy-Lyle said commercial property and construction businesses were of particular concern to CBA as the economy slowed.  The bank recorded a 72-basis-point increase in troublesome and impaired assets across its construction lending book. That took total troublesome and impaired assets to $467m at the business bank, up from $370m recorded in June.

And the profit reporting season continues. Flight Centre’s total revenues tripled to $1 billion in the year ending December, compared with 2021. It trimmed losses before tax to $18 million, from $276 million. EBITDA swang back to positive territory at $77 million, from a loss of $190 million in 2021. Worley had a statutory loss of $99 million. Santos has reported a jump in annual net profits of 221% for the year ended December 31 totalling $US2.1 billion ($A3 billion) from revenues of $US7.79 billion – up 65% on the previous year. Real estate investment manager Qualitas recorded its net profit at $10.7 million, up 117% from the prior corresponding period. Scentre Group’s revenue rose 7.8% to $2.5 billion in the year ending December, from a year ago, taking profit after tax 18% higher at $970 million. Statutory profit after tax dropped to $301 million in 2022, from $888 million a year ago. Woolworths sales rose to $33 billion, taking net profit 14% higher to $1.6 billion. Logistics software solutions provider WiseTech Global has reported a 40% jump in underlying net profit after tax to 108.5 million. Low cost jewellery retailer Lovisa’s net profit jumped 31.9% to $47.7 million in 1H FY2023. EML Payments said operating income (EBITDA) swung to a loss of $8.2 million, versus $14.2 million in the prior corresponding half.  OzMinerals net profit fell to $207 million, down $323 million from a year ago. Hotel commerce platform SiteMinder reported a $25.5 million loss for the first-half, down 71% from an $87 million loss in the prior corresponding period. Ethical funds management group Australian Ethical has reported an 82% fall in its half-year profit to $961,000. AUB Group reported a net profit of $47 million in the six months to December, from $31 million a year ago. Plumbing business Reece Group has lifted its net profit up 18% to $186 million on sales up 23% to $4427 million for the six months ending December 31, 2022. Domino Pizza’s first-half earnings before interest and tax fell by 21.3% to $113.9 million and underlying net profit was down 21.5% to $71.7 million. First-half earnings before interest and tax fell by 21.3% to $113.9 million and underlying net profit was down 21.5% to $71.7 million. Gold miner St Barbara has reported an underlying loss after tax for the first half of $8.6 million compared to an underlying profit of $15.1 million in the first half of FY22. BHP’s half-year profit after tax dropped 32% to $US6.4 billion. Oil and gas company Karoon Energy recorded its half-year revenue at $US299.4 million ($A436.3 million), up by 61%.  The company reported its statutory net profit was US$77.6 million.  Viva Energy reported record EBITDA (on a replacement cost basis) of $1.1 billion in the full year ended December 31, up 122% on the prior year. Stockland statutory profit dropped sharply to $301 million, from $850 million in the first half of fiscal 2022. Ramelius Resources reported net profit after of $29.1 million for the first half, down from $73.4 million in the prior corresponding period (pcp). Coles reported total sales revenue growth from continuing operations of 3.9% to $20.8 billion in the half year. EBIT from continuing operations was up 9.9% to $1.1 billion. Founder led autoparts supplier ARB Corporation has posted a 31.2% profit fall to $47.4 million on sales down 5.1% to $340.8 million for the six months to December 31. Aged care provider Estia Health reduced its net loss to $25 million in the six months to December, from $44 million in the preceding period following an easing in the pandemic. A $42.6 million impairment has dragged AMA Group to a net accounting loss of $37.2 million for the six months to December 31. Helloworld has swung to a net profit of $1.4 million total transaction value that more than tripled to $1.2 billion for the six months to December 31. Internet communications business Symbio posted a net profit down 34% to $4.4 million on recurring revenue up 5% to $57.2 million for the six months to December 31. Software provider Nuix has posted a net profit of $1.3 million annualised contract value up 3.4 % to $170.2 million for the six months to December 31. Bendigo and Adelaide Bank’s cash earnings after tax climbed 22.9% to $294.7 million on a return on equity of 8.79%. For the six months to December 31 health insurer NIB posted a net profit up 12.8% to $91.6 million. Sydney-focused real estate agent McGrath has posted a net profit of $1.8 million.  Bluescope Steel’s interim net profit sank 64% to $599 million from $1.64 billion and first-half underlying EBIT was down 61% to $851 million from $2.2 billion. Gold miner Northern Star Resources has declared cash earnings up 3% to $467 million on sales up 5% to $1949 million for the six months to December 31. Financial software business Iress has posted a net profit down 28.6% to $52.7 million on sales up 3.7% to $617.9 million. Charter Hall reported statutory net profit of $226.5 million for the half year. Furniture company Adairs has reported a net profit of $21.8 million, a 23.9% increase for its first half 2023 financial year results. Hotels, cinemas and leisure group Event Ltd has posted a normalised net profit of $39.4 million around double the prior year. Property management business GPT posted a full-year net profit of $469.3m. Ampol reported earnings for the year ended December 31 totalled a record $1.32 billion, up 124% from the previous year. Link Group expected operating EBIT of $80.2 million for the first half of the 2023 financial year. Reliance Worldwide has delivered a 4.6% rise in interim net profits to $US66.6 million. Macquarie Telecom Group has announced revenue of $172.5M (up 16%), EBITDA $51.3M (up 26%), and NPAT $8.5M (up 133%). Seek forecast full-year 2023 guidance of $1.26 billion revenue, $560 million of EBITDA, and $250 million of net profit. Best and Less’s net profit slumped 32% to $13.7 million in the six months to December, from a year ago. Johns Lyng Group’s full-year forecast sales revenue has been upgraded to $1.146 billion and forecast EBITDA to $111.1 million.  Judo’s first-half profit was $53.2 million before tax, up from $12.6 million in the second half of 2022. Mining equipment producer Austin Engineering reported its net profit was up 3% to $5.4 million. Tabcorp has posted a $52 million net profit after tax for the half year to December 31.

And that’s it for this week. And next week, I’ll be talking to Dan Frechtling from Boltive about the convoluted digital ad ecosystem. And I’ll be taking to AMP Capital chief economist Shane Oliver about the reporting season.

This show was brought to you by Multi-Award Winning Law firm McDonald Legal, experts in the areas of Dispute Resolution and Commercial and Property Law. For a free consultation on your legal matter, McDonald Legal can be reached on 03 9070 1107 or by visiting the website

In the meantime you can catch me on Facebook, Twitter, Instagram, LinkedIn and YouTube. And if you want leave a comment. For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business on the Apple podcast store or on my website   

Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week.