Talking Business March 5 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 5 in our series for 2021 and today’s date is Friday March 5.

First, I’ll be talking to Matt Nguyen, policy lead at Reset Australia, who is concerned about the amendments to the media bargaining code the government brought in to get Facebook on board. And I’ll be talking to economist Nicholas Gruen analysing whether Jacinda Arden’s well-being budget actually works

But now, let’s talk to Matt Nguyen.


The value of Chinese investment in Australia collapsed last year in the face of tougher scrutiny by Canberra, a breakdown in bilateral relations and a global downturn in foreign investment owing to the pandemic. The dramatic drop in Chinese investment came as other members of the Five Eyes intelligence network, including the US and UK, rushed to tighten oversight of foreign investment on national security grounds. New data show Chinese investment fell 61% to A$1bn (US$780m) in 2020, down from A$2.6bn a year earlier and a peak in 2016 of A$16.5bn. The year 2016 was a high point in Sino-Australian ties that coincided with a free trade deal. In contrast, just 20 transactions were recorded last year. Chinese investment in 2020 was limited to just three sectors — real estate, mining and manufacturing — a big shift compared with previous years when activity spanned all industries, according to a database tracking Chinese investment managed by Australian National University.

Chinese enrolments in Australian universities have collapsed by 23% in a year, a figure that is set to dramatically worsen after reports that Beijing is advising agents to direct students to other destinations. Reports emerged last week that education agents across China had been directed to not recommend or advertise Australian institutions. University leaders say they still don’t have concrete evidence that Beijing is working against Australian universities, but note that reports coming from China follow a similar pattern to those that preceded news of bans of beef, barley, coal, lobster and wine.


The Reserve Bank of Australia held interest rates at 0.1% and kept its quantitative easing programme unchanged at its Tuesday meeting. The bank reiterated its expectation that it will likely hold rates at 0.1% for the next three years to allow for the labour market to tighten and inflation to pick up to its target range of 2pc to 3pc.

Australia’s GDP has grown by 3.1% during the fourth quarter on a quarter-on-quarter basis, smashing consensus forecasts for a 2.5% increase. On a year-on-year basis, the nation’s GDP is down 1.1%.


Australia’s housing market is booming again, with the biggest monthly price gain in 17 years, the combination of ultra-cheap credit and low stock levels put Sydney and Melbourne on track to hit new record highs.dispelling fears of a Covid-induced downturn Nationwide house values surged 2.1% in February, the largest increase since August 2003, CoreLogic Inc data released Monday showed. Capital city prices gained 2%, led by Sydney and Melbourne.

Home loans have soared during January according to the Australian Bureau of Statistics data, which showed growth well ahead of market expectations. Home loan values climbed 10.5% in January, smashing expectations for a 2% increase on the back of December’s 8.6% rise. Investor loan value rose 9.4%, beating expectations for a 3% increase following December’s 8.2% rise.

Company profits have both fallen short of expectations. Wednesday’s fourth quarter GDP figure. Company operating profits fell 6.6% in the fourth quarter, below expectations of a 1.3% rise and below the third quarter’s 3.2% increase.

After a year of bumper harvests that supercharged Australian farming, next season is looking less stellar with the total value of output set to shrink on lower commodity prices and reduced volumes of crops and livestock. The overall value of farm production is forecast to contract 4% to A$63.3 billion ($49 billion) in 2021-22, according to a report from the government forecaster Abares. While that figure is expected to remain above A$60 billion over the next five years, the sector faces challenges — including pressure on red meat prices as China rebuilds its hog herds and a highly variable climate. The sector remained fairly resilient to Covid disruption last season, Abares Executive Director Jared Greenville said, with production value rising 8% from a year earlier to A$66 billion, thanks to plentiful rains which boosted the winter crop to the second largest on record. While upcoming crops are set to benefit from residual soil moisture and improved water availability across the country, the overall 2021-22 harvest is unlikely to match the records set last season, the report noted. Still, exports are expected to climb 6% in 2021-22, the first increase in four years, helped by increased demand for cotton, wool and dairy products.

New figures released today by the Electric Vehicle Council show Australian electric car sales stagnant at a time when the rest of the world is hitting the accelerator hard. In 2020, there were 6,900 electric cars sold in Australia, a 2.7% increase from the 6,718 sold in 2019. The 2020 figures show electric cars accounting for 0.7% of total Australian car sales. By comparison, electric vehicles in the EU increased their market share from 3.8% in 2019 to 10.2% in 2020. In the UK, it was 3.1% in 2019 against 10.7% in 2020. In California, market share went from 7.6% to 8.1%.



Scott Morrison is open to a tax increase to find the tens of billions of dollars extra that will be needed to fix a troubled and underperforming aged care sector, but is unlikely to move unless he has Labor’s support. As an alternative, the government is exploring compelling a greater use of retirement savings, including superannuation, when people go into aged care, to help find the money needed. The Prime Minister left open the option of an income tax rise or an increase to the Medicare Levy following the release on Monday of the two-year Royal Commission into Aged Care Quality and Safety report. The option of compelling people in care to use more of their savings was not recommended by the commission. But the report canvasses a scenario in which the federal government – which now spends $20 billion a year on aged care – would have to find up to $131 billion a year in today’s dollars by 2050. To the frustration of the government, the two commissioners – Lynelle Briggs and Tony Pagone – issued 148 recommendations but failed to agree on the two fundamental challenges facing the aged care sector – how to run it and how to raise the money. Both agreed, however, that tens of billions of dollars more were needed, and there should be a tax increase to pay for it. Mr Pagone proposed either an income tax increase of 1% so those on higher incomes paid more, or an increase to the Medicare Levy. Ms Briggs argued for a Medicare Levy increase but says it should not be hypothecated towards aged care. She said when people enter the aged care system they should not be required to help pay for care, saying “such payments amount to a tax on frailty”. Mr Morrison, who typically opposes tax increases, left the door open this time.


The corporate watchdog has accused the $60 billion REST Super of misleading and deceptive conduct, alleging the industry superannuation fund tried to stop members transferring their savings to a better performing fund. The Australian Securities and Investments Commission civil case, filed in the Federal Court on Tuesday, alleges REST gained a benefit from the deceptive activity over a decade by retaining members who would have otherwise left, which subsidised fees for other members and increased the size of the fund. The move follows a two-year investigation and is one of a number of cases lodged against superannuation funds, including industry funds backed by unions and employers.  According to ASIC, REST told members who wanted to take their savings elsewhere that they needed to keep $5000 in their REST account if their boss wanted to keep making contributions. REST also told members that if their employer was happy to contribute to their new fund, they would need a signed declaration giving consent to the move and evidence that contributions to REST had ceased, ASIC alleges. The super fund, which is backed by the Shop, Distributive and Allied Employees Association, also told members they needed to obtain a separation certificate or proof of employment termination from their employer if they wanted to transfer their balance to another fund.





Part-time checkout attendants, shelf-stackers and sales assistants would be allowed to work additional hours without overtime in a joint union-employer plan to encourage more permanent jobs rather than casual positions. The proposal, led by the Australian Council of Trade Unions and Council of Small Business Organisations of Australia to give part-time retail staff more flexibility, rivals the Morrison government’s plan to legislate a similar arrangement but differs on specifics. Both the government’s bill and the ACTU-COSBOA plan are meant to tackle the same problem: part-time workers are generally entitled to overtime if their boss makes them work beyond their standard rostered hours. That can discourage employers from offering workers more shifts when they would like the work, or mean they employ casuals, who have no set shifts, rather than part-time staff. The model championed by the ACTU, COSBOA, Master Grocers Association, the Shop Distributive and Allied Employees Association (SDA) and the Australian Workers’ Union would let workers doing at least nine regular hours a week to agree to more hours without being paid overtime. Workers doing more hours regularly for six months would be entitled to convert that to be their new baseline, with the industrial commission to decide disputes.




Casino giant Crown Resorts underpaid hundreds of workers at its venues including at its centrepiece Southbank complex, becoming the latest company to admit to breaching Australia’s workplace laws. The casino business, subject to an upcoming Royal Commission, after its links to money laundering were exposed, also is under investigation by the Fair Work Ombudsman. Crown, Victoria’s largest single-site employer, said it had self-reported the underpayments to the regulator. “Crown self-initiated a comprehensive assessment of its workforce following media reporting of widespread underpayment issues, particularly in the hospitality industry,” a company spokeswoman said.

Woolworths is launching a fresh assault on the nation’s fast-growing $10bn pet industry, which experienced boom conditions through COVID-19, and has inked a partnership with South African entrepreneur Richard Enthoven — whose global businesses include insurance and the Nando’s fast-food chain. The deal struck late last year between Woolworths and Mr Enthoven has created a new joint venture called PetCulture that is 60% owned by the supermarket retailer and is being groomed to be a one-stop shop for pet insurance, veterinary services, food and other pet-related products. Over the past year, Woolworths has witnessed growth in the pet category in its supermarkets and Big W businesses, and PetCulture has been tasked with building a digital platform to provide dog and cat lovers in Australia with a personalised experience in how they explore, shop, learn and provide health and wellbeing for their pets. Woolworths has seen strong growth in the pet industry, insurance and pet food during the pandemic, with that also shown in the massive uptake in pet ownership through lockdowns that saw the price of purebred cats and dogs skyrocket and many pet stores sell out of animals.

Qantas executive Andrew David has conceded there could be more job cuts at the airline beyond the 8500 already announced before a senate inquiry into aviation’s recovery from the pandemic. Mr David – who is in charge of Qantas’ domestic and international business – said this was because of continued uncertainty surrounding the industry’s future, and further redundancies were unlikely to be forced by any cessation of government support for the sector. Still, Qantas representatives told the senate probe they thought existing support the sector, including federal fee relief and cash to underwrite certain routes, should continue until the international borders re-open. The airline’s representatives said the costs for the redundancy program, which will see nearly a third of its pre-pandemic workforce cut – were north of $900 million, but were largely complete.

The chairman and a board director of Rio Tinto will resign over the Juukan Gorge disaster. The big miner announced chairman Simon Thompson and non-executive director Michael L’Estrange, a former top public servant, would step down ahead of next year’s annual shareholder meeting. Last year, Rio destroyed two 46,000-year-old caves in the Pilbara region against the wishes of the traditional owners, the Puutu Kunti Kurrama and Pinikura (PKKP). A former chief executive and two top executives were forced to resign last year over the scandal. Mr Thompson said that as chairman, he was ultimately accountable for the destruction of the sacred Aboriginal site.



The trend for zero-alcohol drinks, which has been a winner for beer giant Heineken, is also helping to supercharge sales of the McGuigan wine brand for ASX-listed Australian Vintage. The McGuigan Zero range of four wines now made up 10% of the sales of the entire McGuigan portfolio, which was already a big-seller globally, Australian Vintage chief executive Craig Garvin said. Mr Garvin said COVID-19 triggered a fundamental shift in many people’s approach to health and fitness, and they had shifted to lower alcohol or zero-alcohol products. McGuigan Zero has made most of its gains in the Australian market but Mr Garvin said it had also taken off in the United Kingdom, where large displays are devoted to no-alcohol products in the beverages sector. Mr Garvin said within the next 12 months McGuigan Zero would be a brand with annualised sales of between 200,000 to 300,000 cases of wine. It hit the market in Australia just over 12 months ago. The McGuigan brand has also grown in traditional wines. The brand generated a sales increase of 21% in the United Kingdom in the six months ended December 31, with the brand popular among shoppers at major supermarkets chains Tesco, Sainsbury’s and Morrisons.

A group of teenagers has taken Environment Minister Sussan Ley to court, claiming her approval of a NSW coal mine violates her duty of care to future generations. A group of eight teenagers from around Australia are driving a class action against an extension to the Vickery coal mine in regional NSW, given the green light by Ms Ley. The landmark case, which was in the Federal Court on Tuesday, could have dramatic implications for the future of the country’s energy. The 16-year old lead complainant Anj Sharma warned the project would burn roughly 370 billion tonnes of carbon emissions over its lifetime if it went ahead.

And that’s it for this week. And next week, I’ll be talking to Australian-based Verus Global Founder, Jackson Meyer. In its first year of operation, Verus Global has skyrocketed to global success, already generating a revenue of $30million. An award-winning entrepreneur, Meyer, established Verus Global to bridge the gap between global giants and local small enterprises in Australian logistics. As Group CEO and Director, Meyer manages teams across 15 global offices, located in Australia, China, Hong Kong and the United Kingdom. And I’ll be talking to CommSec chief economist Craig James about what investors can expect in the market in the week ahead.

In the meantime, you can find me on Twitter at  talkingbizz, on Facebook and on 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.