There is no doubt that Cyclone Alfred will punch a hole in the Federal Budget to be announced next week.
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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 7 in our series for 2025 and today’s date is Friday March 21.
First, I’ll be talking to Angelina Wu, the co-founder and CEO of investmentmarkets.com.au. It has been called the Google for investments. How broad does she intend to make it? We’ll talk about how she would describe her market and how she would like to turn it into Australia’s Investments Central educating Australian investors
And I’ll be talking to independent economist Craig James about what we can expect in next week’s market.
But first, let’s talk to Angelina Wu.
So what’s happening in the news?
There are more signs that Trump’s policies are having a bad impact on the world’s biggest economy with US shoppers cutting back on spending. The bottom line:
sentiment is sliding. President Donald Trump’s tariffs and market volatility now threaten to undermine one of the key drivers of the world’s largest economy. Many retailers reported solid sales at the end of last year, but warned of slower growth in 2025, and industry data shows that their forecasts are already playing out. Footfall to US stores fell by 4.3% year on year in early March, according to consultancy RetailNext. This has extended declines that began at the start of the year. Placer.ai, which aggregates signals from consumers’ mobile devices, has recorded fewer visits to big-box stores including Walmart, Target and Best Buy in recent weeks. On Friday the University of Michigan’s consumer sentiment index recorded its third consecutive monthly drop and the lowest reading since November 2022. Inflation expectations were rising, the survey also showed. Trump has declined to rule out a recession, while the stock market’s recent tumble has dented the investment portfolios of wealthier Americans who propel US consumption. “The consumer is being barraged with so many different elements,” said Marshal Cohen, chief retail analyst at Circana, which compiles retail purchase data. “It’s easier for the consumer to just step back and say: ‘I’m going to ride this out and wait and see what happens’.” The US Federal Reserve is expected to keep interest rates on hold at its meeting this week, and Fed chair Jay Powell recently downplayed concerns about growth, saying that the US central bank did “not need to be in a hurry” to cut rates. But investors are increasingly concerned that Trump’s erratic policymaking, marked by a series of sudden U-turns, is disrupting businesses and slowing growth. Wall Street’s benchmark S&P 500 stock index fell into correction territory this week, before inching back.
There is no doubt that Cyclone Alfred will punch a hole in the Federal Budget to be announced next week. In fact, according to Australian treasurer Jim Chalmers it will be $1.2 billion hole while posing a threat to inflation. $1.2 billion hole in the federal budget while posing a threat to inflation. Amid new forecasts suggesting a fall in revenue will contribute to larger budget deficits and more debt, Chalmers has used a pre-Budget speech this week to show that Alfred – which hit south-east Queensland and northern NSW a week ago – will also slow an economy that is already struggling to grow. Chalmers, who will release the earliest budget in Commonwealth history on March 25, had forecast a deficit of $26.9 billion for this financial year, slipping to $46.9 billion in 2025-26. But in his speech he will reveal early Treasury estimates the cyclone will cut a quarter percentage point from overall economic growth and increase inflation pressures. The impact to the budget will be larger, as the government provides direct financial assistance to thousands of people and supports the reconstruction of infrastructure such as roads and bridges affected by the cyclone. “I expect that these costs and these new provisions will be in the order of at least $1.2 billion, a substantial amount of money and that means a big new pressure on the budget,” he will say. “At (the mid-year update), we’d already booked $11.6 billion for disaster support nationally over the forward estimates. With all of this extra funding we expect that to rise to at least $13.5 billion when accounting for our provisioning, social security costs and other disaster-related support.” Chalmers, who hands down his fourth budget next week, also revealed that the direct impact of the steel and aluminium tariffs will reduce Australian GDP by only 0.02% by 2030. This comes amid speculation that Australia faces a potential tariff of between 2% and 8% on the $30 billion of exports sold to the United States, such as beef and pharmaceuticals, if the Albanese government fails to win an exemption from Donald Trump’s next round of sweeping tariffs. The relatively low tariff – compared to rates of 25% to 100% Trump has threatened on China, Canada, Mexico and Europe on select goods – is the estimate of trade experts and government sources, based on preliminary talks with the Trump administration and public statements by US officials. But the broader impact from just these tariffs, as they ripple through the domestic and global economy, would be closer to 0.1% of GDP, or half the impact of the recent Tropical Cyclone Alfred. If the trade war was to widen, the impact would be substantially worse. A broader trade war involving the US and China could have bigger implications for Australia. “Over a range of scenarios, Treasury found the indirect GDP impacts of a trade war could be up to four times larger than the direct effects of tariffs on our economy,” Chalmers said, “Tariffs and escalating trade tensions are a form of economic self-harm. They are self-defeating, and self-sabotaging.” That self-harm is evident in the OECD’s interim economic outlook, released on Monday night, which downgraded its forecasts for global growth this year and while predicting higher inflation. American economic growth this year is forecast to be 2.2%, a drop of 0.2 percentage points since the OECD’s last report in December. It is worse for 2026, with forecast growth 0.5 percentage points lower at 1.6%. The organisation said Australia’s growth would “hold up” this year at 1.9%, one of only two major economies not to suffer a direct hit from Trump’s trade war through 2025. But it sliced its Australia forecast for 2026 by a substantial 0.7 percentage points to 1.8%.
All the Australian government policies will result in higher taxes. That’s the conclusion of economist and leading budget watcher Chris Richardson who concluded that Treasurer Jim Chalmers’ projections for spending restraint over the coming years were unrealistic. His audit concluded that the federal government is becoming increasingly reliant on taxing workers and that it has squandered the biggest surge in revenue on record by funding a series of expensive and “stupid” policies. His audit concluded that Chalmers’ projections for spending restraint were “unrealistic”. Chalmers will hand down his fourth budget. It will be an election budget with Labor using it to promote its economic achievements before voters cast their ballots in May.
Former top public servant Martin Parkinson has warned Labor and the Coalition they must stop lying to voters about the scale of the problems facing the country and develop coherent policies to get living standards growing again. Parkinson hit out at Labor and the Coalition for their lack of ambition and populist policies across tax, education and climate change ahead of next week’s federal budget. Parkinson warned that the 10% GST would need to increase if the Federal Government was serious about reducing its reliance on taxing workers. He singled out Labor’s pledge to wipe $10 billion of student debt, the Coalition’s threat to break up insurers and the bipartisan policy to cap international student numbers as examples of poor policy, “Neither side has a coherent economic strategy to get us back to then growth and productivity performance, and growth in living standard performance because of the Hawke-Keating-Howard-Costello reform,” Parkinson said. “Really, it’s a pox on both your houses because neither side is actually being honest with the public.”
Invoice payment defaults have risen by almost 50% across the past 12 months, according to credit reporting agency CreditorWatch. CreditorWatch’s data on reported invoice payment defaults revealed a 47% increase from February 2024 to February 2025. Trade payment defaults have a strong correlation with a business becoming insolvent or closing voluntarily. In the following 12 months the risk of a business collapsing rises 0.70% to 7.9% when a business defaults on an invoice payment. According to data from the Australian Securities & Investments Commission there were 9427 corporate insolvencies in the 2025 financial year to March 2, up 41.8% on the corresponding period in 2024.
The supply of housing could substantially miss the national target of 1.2 million new homes over five years by one third or even more as builders and developers grapple with high construction costs and a sluggish planning system, according to industry analyses. Based on forecasts by industry lobby group the Urban Development Institute of Australia in a new report, the delivery of new homes will fall 393,000 dwellings short of the target for the combined capital cities alone by 2029.
The future of AUKUS has been in the news lately with Donald Trump’s tariffs policies hitting Australia. But big US defence contractors are bringing Australian businesses into the supply chain for nuclear-powered submarines. The industry is pushing back against predictions that the AUKUS pact will fail. In a major milestone, the US Navy has issued its first contract – which could run into the tens of millions of dollars – to US conglomerate Honeywell to shepherd Australian companies through stringent quality and security checks to build parts for US-made Virginia-class submarines. In the control room of the American Virginia class attack submarine USS Minnesota, off the Western Australian coast, sonar operators adjust to the chatter of dolphins in new waters where the U.S. submarine presence will soon grow significantly. On a training exercise from its home port in Guam, USS Minnesota is a forerunner to four Virginia class submarines that will be hosted at a Western Australian naval base from 2027, under the AUKUS partnership to transfer nuclear submarine capability to Australia.
Media mogul Kerry Stokes has joined forces with fellow billionaire James Packer to bankroll an American technology entrepreneur using artificial intelligence to build the world’s best database for organising and storing medical information. Stokes and his son Ryan have invested a multimillion-dollar sum in a company called OpenEvidence founded by a Canadian-born technology entrepreneur, artist, and poet Daniel Nadler, who has just achieved a $US1bn ($A1.58bn) valuation. The 41-year-old Mr Nadler boasts a PhD from Harvard, where he worked on new econometric and statistical approaches to modelling low probability, high impact events. OpenEvidence is his second AI company. His first, Kensho Technologies, was sold for$US550m in 2018. OpenEvidence has been described as a chatbot for physicians that helps them make better decisions at the point of care, and Mr Nadler claims it is now being used by 40% of doctors in America. OpenEvidence is said to be getting backing because it offers a solution to doctors overwhelmed with growing caseloads and an explosion of medical knowledge. The New England Journal of Medicine has become a key content partner, meaning clinicians using OpenEvidence can have access to content sourced from NEJM Group journals Packer and Stokes – the latter through his private company Australian Capital Equity or ACE – were the first external investors in the parent company of OpenEvidence, known as Xyla, in July 2022 via a capital raising that valued the firm at more than $US400m.
And Bunnings predicts assisted living and disability could be a $2.1bn market with demand for toilet safety handles, anti-slip mats and mobility scooters, all underwritten by an ageing population, rising disability rates and the National Disability Investment Scheme. The hardware giant owned by Perth-based conglomerate Wesfarmers has launched an expanded assisted-living range offering more than 2500 products across 16 key categories. And it’s not just money coming in from 5.5m Australians living with a disability. More older Australians are simply wanting to stay at home and preferring not just functional but stylish items for their bathrooms, kitchens and living areas. “In a market that’s often fragmented, the category will provide a one-stop shopping experience for customers looking to upgrade their homes at an affordable price,” Bunnings chief operating officer Ryan Baker said. “The range is focused on safety, style and current trends as well as functionality because we know our customers want choice when it comes to their homes.” The assisted-living category, spread throughout the store rather than located in just one aisle, will sell items from bathroom handles to mobile ramps. Bunnings sees the addressable market at around $1.6bn, growing to $2.1bn by the end of the decade. The $44bn National Disability Insurance Scheme is one of the fastest-growing cost centres of the federal budget and expected to hit $60bn as the government strives to slow its cost growth down to 8 per cent from current levels of 13 per cent. Not surprisingly then to maximise the opportunity for Bunnings and to attract NDIS clients, its assisted-living products will come with special pro-forma invoicing which are key to make claims with the NDIS.
And that’s it for this week.
And next week, I’ll be talking to Rocky Lalvani who serves as a Chief Profitability Adviser for business owners and is the founder of Profit Comes First. He teaches his clients how to ensure they get paid, and they make profit a priority! As a certified Profit First Professional he implements Mike Michalowicz’s Profit First System
And I’ll be talking to independent economist Nicholas Gruen about the impact of Trump’s tariffs on global supply chains and the loss of trust in the US..
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 next week’s episode of Talking Business.
