Talking Business March 26 2021



Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast app, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at

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 8 in our series for 2021 and today’s date is Friday March 26.

First, I’ll be talking to the founder and director of Sydney based consulting firm Fifth Dimension, Lyndall Spooner about how marketing has changed for companies. And I’ll be talking to Indeed economist Callam Pickering about the latest wages and jobs figures

But now let’s talk to Lyndall Spooner.

President Joe Biden’s economic advisers are preparing to recommend spending as much as $US3 trillion ($3.8 trillion) on a sweeping set of efforts aimed at boosting the economy, , reducing carbon emissions and narrowing economic inequality, beginning with a giant infrastructure plan that may be financed in part through tax increases on corporations and the rich. After months of internal debate, Mr Biden’s advisers are expected to present a proposal to the President this week that recommends carving his economic agenda into separate legislative pieces, rather than trying to push a mammoth package through Congress. Mr Biden supports all of the individual spending and tax cut proposals under consideration, but it is unclear whether he will back splitting his agenda into pieces, or what legislative strategy he and Democratic leaders will pursue to maximise the chances of pushing the new programs through Congress given their narrow majorities in both chambers.

Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell say more must be done to limit the damage from the coronavirus pandemic and to promote a full economic recovery. While both struck upbeat notes about the future of the economy in prepared testimony Tuesday (early Wednesday) before the House Financial Services Committee, they also warned that the economy needs help. It marked the first joint appearance by the two economic leaders in their current jobs and it was Yellen’s first congressional appearance since taking over as Treasury secretary. The economy fell into a deep recession a year ago and though it began to mend by summer, nearly 10 million of the jobs lost have not been recovered. Powell testified that a recovery is far from complete, so the Fed will “continue to provide the economy the support it needs for as long as it takes.” The Fed will “not lose sight of the millions of Americans who are still hurting, including lower wage workers in the services sector, African Americans, Hispanics and other minoirty groups that have been especially hard hit,” Powell said. The Fed kept its benchmark interest rate at a record low of 0% to 0.25% at its meeting last week and even though it significantly boosted its economic forecast, it continued to signal that its benchmark rate would remain unchanged through 2023. Under the March 2020 COVID-19 relief law, the Treasury secretary and Fed chairman are required to testify before Congress on a quarterly basis to provide updates.

The level of unemployment that needs to be achieved before wage growth kicks in and the government needs to begin budget repair is lower than previously thought, Treasury Secretary Steven Kennedy told a Senate Estimates hearing. Despite the economy being far ahead of where it was expected to be in the March quarter, Dr Kennedy said an unemployment rate of about 4.5% would need to be reached before wages rose. The unemployment rate is currently at 5.8%

Australian businesses have received a windfall of work as the economy continues to rebound, sending a key measure of activity to a three-month high. The IHS Markit Flash Australia Composite Output Index, which measures activity based on a survey of businesses, reached 56.2 in March, the strongest reading since December and building on February’s 53.7 number. A score above 50 indicates growth. Survey respondents pointed to the strengthening demand, easing of COVID-19 restrictions, coupled with low interest rates and stimulus programmes in helping drive activity.



Crown Resorts has confirmed an $8 billion takeover offer from US private equity giant Blackstone. Crown said its board had not yet formed a view on the merits of the proposal and would start a process to assess it. James Packer is taking the biggest gamble of his life and he’s backing the commitment he made to the Bergin inquiry to allow the Crown Resorts board of directors to act independently and in the interests of all shareholders. But the proposed takeover bid faces a number of hurdles and regulatory risks abound.  These include several inquiries into the Casino giant by state-based regulators, including two royal commissions, looming class actions and financial regulator AUSTRAC investigating Crown for potential breaches of Australia’s anti-money laundering and counterterrorism financing laws. Blackstone, which manages $US619 billion ($800 billion) of assets globally, already owns about 10% of Crown. The private equity firm has been operating in Australia for 11 years and has invested $14 billion across Australia and New Zealand, predominantly in commercial and industrial real estate. Blackstone sees an opportunity in acquiring Crown’s property assets and has likely weighed up the regulatory risks it knows of so far. But the offer is at this stage just indicative and non-binding. This means it is subject to a number of conditions, including making sure the casino is deemed fit and proper to hold its casino licences in Sydney, Melbourne and Perth. There will also need to be a unanimous recommendation from Crown’s board and a commitment from all Crown directors to vote in favour of the proposal, as well as approval from Blackstone’s investment committee.

NSW gaming minister Victor Dominello warns any takeover of Crown Resorts is likely to take months to get the necessary approvals, as analysts pour cold water on hopes US investment giant Blackstone could dramatically raise its bid. Mr Dominello said NSW Parliament was considering the recommendations from the state’s independent inquiry into Crown, which found the company was not suitable to hold its Sydney casino licence. But Blackstone’s bid would probably need to wait on the completion of royal commissions into Crown in Victoria and Western Australia.

Data from the Insurance Council of Australia (ICA) shows that, so far, policyholders have lodged 11,700 insurance claims associated with the devastating storms and flooding in New South Wales (NSW). The ICA noted that further claims have been lodged since those numbers were collected and more are expected in the coming days and weeks, meaning it remains too early to estimate the overall cost of the flooding. ICA claims data shows the areas with the most claims are the NSW mid-north coast towns of Port Macquarie, Kempsey, Laurieton, and Taree, and west of Sydney around Penrith and in the Hawkesbury-Nepean valley. “This remains an active natural disaster and it will take some time to gain a clearer picture of the damage,” said Andrew Hall, CEO of the Insurance Council of Australia. “Insurers expect a large number of claims will be lodged in coming days as property owners begin returning to homes and businesses.” While it is too early to estimate the cost of the damage to properties, the ICA suggested the February 2020 east coast storms and flooding event can been viewed as a point of comparison. These events drove insurance losses of almost $1 billion. Since the 2011 Brisbane floods, insurers now use a standard flood definition for home building and contents policies, the Council observed, and residential policyholders must make an explicit decision to exclude flood when buying or renewing a policy. The intense flooding experienced this year contrasts starkly with the bushfire crisis that Australia endured last year, when drought conditions resulted in large parts of the country being ravaged by intense fires. Changing conditions have been attributed to a La Niña weather pattern that is affecting Australia this year, which typically brings more rainfall and tropical cyclones during the summer months.

Former federal Liberal MP Sophie Mirabella has been handpicked by the Morrison government to join the Fair Work Commission, a move Labor says should send a chill down the spine of workers. Ms Mirabella, who held the regional Victorian seat of Indi between 2001 and 2013, is one of five new commissioners to have been selected by Industrial Relations Minister Christian Porter. Her pay will range from $387,000 if she is appointed a commissioner to $470,000 is she is made a deputy commissioner. It will be the second government job Ms Mirabella has had since losing her seat. The Abbott government appointed her to the board of the Australian Submarine Corporation. Since 2016, she has worked as general manager of government and media relations for Gina Rinehardt’s company Hancock Prospecting. Ms Mirabella, a Liberal conservative, is also a lawyer. She was a polarising figure while in Parliament, and Labor has expressed concern at her imminent appointment to the industrial umpire.





A controversial plan to allow domestic violence survivors fleeing abusive relationships to access thousands of dollars from their superannuation accounts is no longer federal government policy. Critics of the proposal said abuse victims should not have to fund their escapes from dangerous situations. The measure was first floated in 2018 as part of a suite of proposals aimed at helping women during relationship breakdowns. Women would have been allowed to withdraw up to $10,000 from their superannuation accounts under the plan, on “compassionate grounds”. But domestic violence groups feared such a proposal could be rorted by abusive partners, who could force women to apply for early access to superannuation.  In Senate estimates on Monday night, Minister for Women Marise Payne confirmed the government had dumped the policy after feedback from superannuation funds, legal groups and family violence experts.

Premier Investments’ half year net profit rose 88.9% to $188.2 million after revenue increased 8.4% to $795.8 million and the firm indicated it will retain pandemic government support payments of JobKeeper, saying it will do this “consistent with the Australian Federal Government’s policy of keeping people in jobs and connected to their employers during this once in a century health crisis. By defying calls to pay back JobKeeper subsidies, Premier is behaving the same way as Harvey Norman and Accent Group, other major beneficiaries of the pandemic-fuelled surge in spending, Premier is one of the nation’s largest retail chains and owns brands including Smiggle, Peter Alexander, Just Jeans, Jay Jays, Dotti, Portmans, and Jacqui E.

Australian retail turnover fell 1.1% in February 2021, seasonally adjusted, according to preliminary retail trade figures released by the Australian Bureau of Statistics

And in a reflection of the state of the economy and lack of demand, profits for oOh!media, the billboard advertising group that also owns Junkee Media, a fell 36% to $180 million in 2020 on revenues of $426.5 million, down 34% for the year.

GrainCorp will expand its core bulk handling business to include commodities like woodchips, cement and fertiliser in a bid to boost earnings from its rural infrastructure and port network. The company said on Wednesday that it expected the new business and other initiatives to generate $25 million in annualised earnings before interest, taxes, depreciation, and amortisation by 2023-24. GrainCorp is also looking to generate cash through the sale of country storage sites that are no longer part of its core network and former oilseeds refining plant in Brisbane. The move to diversify into woodchips, cement and fertiliser handling comes with GrainCorp’s seven port terminals on the east coast booked out late into the year after farmers produced the second biggest grain crop in Australia’s history.



The Reserve Bank of New Zealand has hit Westpac NZ with formal compliance notices for “material failures” in reporting its liquidity over eight years, forcing the bank to undertake independent reviews and hold more liquid assets. The regulatory action is yet another blow to Westpac, which is still reeling from agreeing last year to pay a record $1.3 billion penalty to Austrac given the bank’s millions of breaches of financial crimes laws.


Rio Tinto continues to be at pains to repair its damaged Indigenous relations by improving its cultural heritage management in a bid to avoid future scandals like the Juukan Gorge cave blast. The mining giant on Tuesday held virtual seminars to demonstrate the steps it had taken to make amends after blowing up the 46,000-year-old rock shelters in Western Australia’s Pilbara region in May last year. The destruction sparked international outrage and claimed the scalps of key executives. The seminars included presentations from board and executive committee members as well as experts in the field to outline actions Rio Tinto had introduced to strengthen its cultural heritage performance and governance. Rio Tinto has also formed an Indigenous advisory group with the aim of gleaning a better understanding of Indigenous culture and issues in Australia, including at board level, and looking at the gaps in current protocols that led to the detonation. The dual-listed company’s upper echelons have long been criticised for being too detached from their cash cow Pilbara iron ore industry, with WA’s now former Aboriginal affairs minister and Yamatji man Ben Wyatt saying a chasm had emerged between its London-based board and the region. The miner’s new chief executive, Danish businessman Jakob Stausholm, has said the cave destruction “should never have happened” and the company would seek to repair its relationship with traditional owners.

Fallen building tycoon Daniel Grollo has proposed a dramatic rescue plan for his collapsed Grocon construction empire and would tip in $10m and the proceeds of selling his luxury apartment in Melbourne‘s Eureka Tower in a bid to pay off most creditors. The scheme has been backed by administrators KordaMentha in a report covering 88 mainly dormant companies, with as they said it would be a better outcome than the companies going into liquidation, which could leave creditors with no return. Under the plan ex-Grocon staff would be fully paid out alongside small creditors, while the Australian Taxation Office could receive as little as 20c in the dollar on a $14m debt. Larger creditors and bond providers would take the biggest hit, receiving returns ranging from just 3c in the dollar to the possibility of being fully paid out. Their returns may depend upon the success of Grocon’s high-profile court case against the NSW government over its treatment at Sydney’s harbourside Barangaroo precinct, with claims that James Packer’s Crown Resorts and developer Lendlease were favoured to the detriment of the Melbourne builder.

AGL Energy will start construction on a large battery at its power station in Adelaide after giving its first firm commitment to build a grid-scale storage plant, costing up to $200 million. The final investment decision on the one-hour, 250-megawatt battery comes as the major electricity and gas supplier is progressing a range of major storage projects, including one at its Loy Yang plant in Victoria for which it lodged an approvals application on Tuesday.  The Torrens Island battery, the cost of which wasn’t given, is targeted to be fully online by early 2023. It was first flagged by AGL in November as part of its strategy to roll out 850 MW of storage across the National Electricity Market by 2023-24 to help replace the closure of coal power plants and ease the transition to renewable power.



And that’s it for this week. And next week, I’ll be talking to Bill Maclellan from Y2Q which is in the business of building teams. And I’ll be talking to economist Saul Eslake getting his insights on the direction of the Australian economy.


In the meantime you can catch me on Facebook, Twitter and LinkedIn. And if you want leave a comment. Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week.