And good news for anyone expecting the RBA will cut rates in July with Australia’s monthly CPI indicator for May lower than expected.
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
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 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 20 in our series for 2025 and today’s date is Friday June 27
First, I’ll be talking to Jesse Kalsi, a numerologist who also work in property transactions by trade. I know, it sounds weird. But what can I say? If people want to talk to me, that’s great. And if they have interesting stuff that might interest us, all the better.
And I’ll be talking to independent economist Saul Eslake about Trump’s exit from G7, Trump’s “big beautiful bill” and his negotiations with China.
But first, let’s talk to Jesse Kalsi
So what’s happening in the news?
A US attack on Iranian nuclear sites could be a market defining move. It could push oil prices even higher and trigger a knee-jerk rush to safety, investors said, as they assessed how the latest escalation of tensions would ripple through the global economy. US President Donald Trump’s decision to join the Israeli attacks on Iran on Sunday represents a wild card that many investors didn’t expect, and certainly are not positioned for. This will rattle markets, and the scale of the damage depends almost entirely on Iran’s next move, not America’s. “This shatters the illusion of containment,” wrote SPI Asset Management’s Stephen Innes. “What was a regional proxy conflict is now a high-stakes, U.S.-driven air war targeting WMD infrastructure — with unpredictable spillovers across energy markets, global shipping lanes, and risk sentiment.” “I think the markets are going to be initially alarmed, and I think oil will open higher,” said Mark Spindel, chief investment officer at Potomac River Capital. “We don’t have any damage assessment and that will take some time. Even though (Trump) has described this as ‘done’, we’re engaged,” Spindel said. “I think the uncertainty is going to blanket the markets, as now Americans everywhere are going to be exposed. It’s going to raise uncertainty and volatility, particularly in oil.” A key concern for markets centres around the potential impact of Middle East developments on oil prices and thus on inflation. Rising inflation could dampen consumer confidence and lessen the chance of near-term interest rate cuts. James Bambino of S&P Global warned that while global oil reserves are sufficient for now, any disruption in shipping could spark inflation. In a step towards what is widely seen as Iran’s most effective threat to hurt the West, its parliament approved a move to close the Strait of Hormuz. Attempting to choke off Gulf oil by closing the strait could send global oil prices skyrocketing, derail the world economy and invite almost certain conflict with the U.S. Navy’s massive Fifth Fleet, based in the Gulf and tasked with keeping the strait open. Nearly a quarter of global oil shipments pass through the narrow waters that Iran shares with Oman and the United Arab Emirates Security experts have long warned a weakened Iran could also find other unconventional ways to strike back, such as bombings or cyberattacks. Saul Kavonic, a senior energy analyst at equity research firm MST Marquee in Sydney, said Iran could respond by targeting American interests in the Middle East, including Gulf oil infrastructure in places such as Iraq or harassing ship passages through the Strait of Hormuz. The Strait of Hormuz lies between Oman and Iran and is the primary export route for oil producers such as Saudi Arabia, the United Arab Emirates, Iraq and Kuwait. “Much depends on how Iran responds in the coming hours and days, but this could set us on a path towards $100 oil if Iran respond as they have previously threatened to,” Kavonic said. Economists warn that a dramatic rise in oil prices could damage a global economy already strained by Trump’s tariffs.
A bipartisan coalition of powerful United States Congressmen has gone into bat for the AUKUS nuclear submarine pact, assuring Defence Secretary Pete Hegseth that the sale of US-made vessels to Australia will not undermine American military strength. Three Republican and two Democrat lawmakers, who serve on foreign affairs and defence committees in the lower house, wrote to Hegseth on Monday (Tuesday AEST) expressing strong support for AUKUS and the sale of Virginia-class submarines, saying domestic shipbuilding is ramping up. This comes with the Albanese government being being warned that a Pentagon review risks imperilling Australia’s nuclear submarine ambitions if the US administration takes a hardline stance on the threat from China in the coming years. American national security experts warn that the outcome of a 30-day review of the AUKUS pact would be a White House push for more investment from Canberra, either in its own defence hardware or for US shipbuilding facilities. Australia’s planned purchases of American-made submarines, which are desperately needed to supplement its ageing fleet and set for first delivery in the early 2030s, could be held to ransom or canned if those sales would unacceptably weaken the US Navy. “We’re all competing for scarce resources,” said Alexander Gray, the chief executive of advisory firm American Global Strategies, who worked on security in the Indo-Pacific in the first Trump administration. “I think we have to prioritise US industrial capacity to provide for the US Navy’s needs, and that has to be our number one, two and three priority.” Such an outcome would be a huge setback for the Albanese government and a shock for the Australian community, given Defence Minister Richard Marles has said he remained confident Canberra’s nuclear submarine plans were on track and downplayed the review as a routine undertaking by a new administration. It would also represent a snub by the US of one of its closest allies, and the latest foreign policy about-face by President Donald Trump.
And good news for anyone expecting the RBA will cut rates in July. According to the latest data from the from the Australian Bureau of Statistics (ABS), Australia’s monthly CPI indicator for May is lower than expected. The CPI indicator slowed to 2.1% on-year from 2.4% the previous month, undershooting market expectations of a 2.3% rise.
Economists have responded to Treasurer Jim Chalmer’s pledge last week to overhaul Australia’s tax system by telling him to consider raising or broadening the GST, as new research from the e61 Institute shows it will cost $349 billion over the next decade to cut income taxes while still returning the budget to surplus. While Chalmers has said he would not rule in or rule out policies, he has downplayed the possibility of raising or broadening the 10% GST following the upcoming productivity roundtable from August 19 to 21. “I think it’s hard to adequately compensate people. I think often an increase in the GST is spent three or four times over by the time people are finished with all of the things that they want to do with it,” Chalmers said last week. But economists have warned the Albanese government will struggle to meaningfully reduce the tax system’s reliance on income tax without either raising the rate of the GST above 10%, or broadening the impost to cover exempted areas like fresh food and education. The GST raised about $90 billion this financial year, while the exemptions were worth about $30 billion in foregone revenue, according to Treasury. Without reform, the e61 Institute estimates the average full-time worker would see their average tax rate rise to 23% by 2035-36 from 20.7%, based on the Parliamentary Budget Office’s long-term projections. That is equivalent to the average full-time worker paying an extra $2400 per year in tax in today’s dollars in a decade. To return bracket creep but still achieve a surplus within a decade, e61 Institute estimated the government would need to raise alternative taxes by $46 billion over the next four years, or by $349 billion over the next decade in today’s dollars.
The chairman of the Australian Securities and Investments Commission Jospeh Longo has embraced Treasurer Jim Chalmers’ call to cut red tape. This comes after Chalmers saying over the weekend that he had written to all regulators under his and Finance Minister Katy Gallagher’s control, asking them to identify regulations that can axed and to bring down compliance costs. It follows the Prime Minister Anthony Albanese’s announcement that the treasurer will convene a productivity roundtable in August. The ASIC chief said he will soon present the government with a deregulation agenda while urging the treasurer to establish a taskforce with business, regulators and policymakers to attack the problem. Longo said ASIC’s simplification group was preparing to present a red tape reduction and law reform agenda to Treasury in August. Longo said ambition and collaboration backed by government action were needed to ease the red tape burden on business and called for the creation of a new taskforce. “We’re not good at correcting where we’ve become overly complex, and so we need to find ways of better self-correction,” he said. “I think ambition is really what’s required here. What we need is an institutional mechanism that involves key stakeholders – policymakers, private sector and regulators … we need to identify the key areas we would like to fix, and get people in a room and fix them.” The Business Council of Australia is also in on the game. It has released a list of red tape that should be overhauled, including making all government forms and communications digital-only, and improving reporting to the Foreign Investment Review Board. It says there’s a need to simplify the definition of financial product and financial service in corporation law. This needs to be cross-referenced in other legislation. It says the government needs to modernise and harmonise Australia’s data retention requirements. The BCA said document retention rules also need to be updated to reflect the fact that a lot of information is now stored online.
Metcash chief executive Doug Jones has urged governments and law enforcement agencies to crack down on organised crime, after the grocery wholesaler reported a sharp drop in tobacco sales due to the growth in illegal trade. Illicit sales now account for 39% of the Australian tobacco market, according to a study by FTI Consulting. Metcash is one of the nation’s biggest tobacco vendors but is selling 40%– or $1.3 billion – less since peak sales in 2021 as high excises prompted a surge in black market trade, much of it controlled by criminal gangs. Metcash, which supplies the IGA supermarket chain, said tobacco sales were down by a fifth in the year to April 30, clouding an otherwise upbeat earnings report. “The foothold and the increasing strength of organised crime in this country is something I’m very alarmed about,” Jones said. “It shouldn’t be viewed as a tobacco problem but as an organised crime and societal problem.” He is calling for swift action “at the very highest level”.
The international visitor recovery has been pushed back a year after fresh data made it apparent short term overseas arrivals in Australia would not match 2019 levels in 2025. A Tourism Research Australia report revised the forecast recovery to 2026 due to global conflicts, a slower than expected rebound in arrivals from China and changes in tourism trends away from long-haul destinations, in figures updated this month. Bureau of Statistics data for April showed short term visitor arrivals in Australia at 8.5% below 2019 levels, but those travelling for a holiday were 19% short of pre-Covid-19 numbers. Former Tourism Australia chief John O’Sullivan, now CEO of the Experience Co, said there was no question the international visitor recovery had been uneven, with the market out of China among the slowest to return. ABS data also showed visitors from the UK, US, Singapore and Japan continued to lag 2019 levels, while arrivals from New Zealand, India, South Korea and Indonesia had rebounded quickly. Mr O’Sullivan said the visiting friends and relatives market was stronger than holidaymakers, which was not terribly beneficial to tourism operators. “They get out and they celebrate with their friends and family that are here, but generally speaking their behaviours aren’t what you see in that traditional leisure visitor who eats out every night, stays in hotels and consumes experiences for pretty much all of their trip,” said Mr O’Sullivan. Airlines were also suffering from the “one-way” tourism recovery, struggling to fill seats on inbound flights in contrast to those heading out of Australia.
After collapsing into administration at the height of the COVID-19 pandemic in 2020, Virgin has relisted on the ASX, marking one of the most anticipated listings of the year and the latest chapter in its turbulent journey. When it collapsed, Virgin was rescued by US private equity giant Bain Capital and delisted from the stock exchange. Now the airline has taken off on the ASX once more, with a leaner business model, a new shareholder mix and the financial muscle of Qatar Airways behind it. At the completion of the IPO, Bain’s stake in Virgin was reduced to about 40%, while Qatar Airways has retained about 23%.
Network 10 has inked what it believes is a world-first deal with audio streaming platform Spotify to broadcast its 10 News+ show as an hour-long podcast and video each day, to be available within minutes of it ending on TV. It will also broadcast live on YouTube. This means the low-rating news service aims to do something different: be everywhere, all the time. Ten axed its long-running nightly talk show, The Project, earlier this month after 16 years and more than 4500 episodes. In its place, it announced 10 News+, an “in-depth news, current affairs and insights” program anchored by journalists Denham Hitchcock and Amelia Brace. Ten, which is owned by Paramount, has tried competing at 6pm against its dominant free TV rivals at the Seven and Nine networks in the past, but has failed to pry away their rusted-on audiences. This is not the point of Ten’s agreement with Spotify, said Rashell Habib, the network’s head of digital news and strategy. “It’d be quite short-term viewing, if you just see free-to-air as your competitors. I think everything is your competitor. Every consumption model, every content creator, is a competitor in the sphere right now,” she said. “We’re not going to put our heads in the sand and go, ‘No, you have to watch it on linear’. The concept of news is to reach as many people as you can and inform them. And that’s the entire strategy here.” There is no money changing hands here. While Spotify paid artists in Australia $300 million in royalties last year, this deal is more of a test – the ads will be stripped out of the broadcast, and Spotify isn’t inserting any of its own. There could be ads eventually, if a big enough audience develops. “This is all about brand exposure, letting people know what 10 News+ is about and what it offers. If it brings value to them, you know, follow up, follow along. But that’s not to rule it out,” Habib said. “It’s parallel audiences, I would call them. The people who sit down and watch connected TV and linear are quite different to the people who listen to a podcast.” Spotify, which has been pivoting into the more lucrative video market over the past few years, says it will promote the show alongside other news podcasts. Ten will air a QR code that viewers can scan to find it.
And with more media news, Australia’s highest-paid chief executive, Robert Thomson, has signed a five-year extension to continue running Rupert Murdoch’s News Corporation, keeping the former newspaper editor at the helm of the company until the next decade. News Corp told investors on Monday that Thomson had an exceptional record leading the company since he joined in 2013. It highlighted his sale of pay TV network Foxtel to sports streaming service DAZN, his commercial deal with artificial intelligence firm OpenAI and acquisitions made by its Dow Jones division. Thomson, an Australian former newspaper editor who started his career as a copy boy at Melbourne’s The Herald (now the Herald Sun), was the ASX’s highest-paid chief executive last year, earning $41.87 million. News Corp chairman Lachlan Murdoch said Thomson had led the company through a period of rapid change.
And that’s it for this week. And next week, I’ll be talking to Jarrod McGrath, CEO of Smart WFM. Jarrod is on a mission to shake up Australia’s workforce management industry, to get the government and other key stakeholders to draw the link between Australia’s productivity stagnation, its complex industrial relations system and the festering issues between it and businesses’ people, processes and technology.
And I’ll be talking to Rabobank economist Teeuwe Mevissen about how China, Australia’s biggest trading partner, is dealing with the tariffs.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com
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Looking forward to the next episode of Talking Business.
