Australian farmers have gone nuts as almond prices hit a 10 year high – thanks to Trump’s tariffs.
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 16 in our series for 2025 and today’s date is Friday May 30
First, I’ll be talking to Nexia’s head of financial planning Craig Woolford about how in the next 20 years, $4 trillion will be transferred from baby boomers to their children and grandchildren as inheritance and how Australians reliant on their compulsory super savings need to ensure they can extend their savings for the duration of their retirement.
And I’ll be talking to independent economist Saul Eslake about the Albanese government’s economic agenda in this term and what policies it should be taking to the 2028 election.
But first, let’s talk to Craig Woolford.
So what’s happening in the news?
Well US president Donald Trump says he’ll impose a 25% tariff on Apple’s iPhones in the US if Apple continues making them in China or India. But experts say iPhone could cost consumers $2300 when tariffs are taken into account, far more than the $1999 price tag, and they could cost $3500 if they are made in the US when cost and availability of energy and skilled workers on US wage levels are considered. Dab Ives, global head of technology research at financial services firm Wedbush Securities says the idea of iPhones produced in the US is a “fairy tale that is not feasible. He said it would realistically take Apple five to 10 years to shift production to the US.
And president Trump says he wants a $175 billion missile-defence shield before the end of his term, capable of intercepting missiles fired from across the globe. But military experts say hitting even one of those targets would be a tall order. The White House envisions its Golden Dome incorporating missiles on the ground, a network of orbital sensors and even satellites designed to knock down projectiles soon after they launch. Some pieces, lie ground-based interceptors and satellite sensors, already exist but are in short supply. Other emerging technologies remain unproven. Developing a new layer of satellites to take out missile from orbit will take time and money. Analysts and former military officials expect the Golden Dome might need thousands of satellites to stop attacks effectively. “It takes time to build the missiles,” said Todd Harrison, a senior fellow at the conservative American Enterprise Institute. “Even things that are already in production, you would be lucky to get that delivered in the next two to three years.” Golden Dome’s price tag itself is a moving target. Trump this month said his plan would cost $175 billion over the coming years. The Congressional Budget Office has issued rough estimates as high as $831 billion, partly based om historical rocket-launch costs. Senator Tim Sheehy, a Republican from Montana, said the full project would probably cost trillions of dollars in the long run. The problem behind Trump’s Golden Dome proposal is that US missile programs are prone to cost overruns. Democrat Senator Ed Markey called the Golden Dome’s orbital-interceptor concept “economically ruinous” and doubted its viability. He urged the administration to focus instead on arms control, calling the Golden Dome “nothing more than a gold-plated giveaway to billion-dollar defense contractors”.
And Australia’s second largest private hospital operator Healthscope has been placed in receivership. Healthscope has been in talks with lenders and potential buyers for months, but the situation came to a head on Monday when its syndicate of 30 financial institutions – hedge funds and banks owed $1.6 billion – voted to call in McGrath Nicol as receivers and KordaMentha as administrators. However, Westpac and Commonwealth Bank have agreed to keep Healthscope’s 37 private hospitals operating. A syndicate of banks and hedge funds that control Healthscope’s $1.6 billion of debt voted to put the company into receivership after being handed control by its previous owner Canadian asset management giant Brookfield. McGrath Nicol and Korda Mentha will face considerable political pressure to avoid the closure of private hospitals at a time when the public system is under considerable strain. Receiver McGrath Nicol can work firming up the 10 or so non-binding indicative offers that Healthscope’s former private equity owner Brookfield has already received for some or all of the group’s 37 hospitals. The veritable United Nations of global and central banks owed $1.6 billion will walk away with cents on the dollar and the new owner, or probably owners, can move forward on a new footing. McGrath Nicol partner and receiver Keith Crawford said there were no plans for hospital closures or redundancies and the aim was to sell the business. Healthscope owns a hospital in every state and territory, including the Prince of Wales Private Hospital and Northern Beaches Hospital in Sydney, Knox Private Hospital in Melbourne and Darwin Private Hospital.
And some households will face power bill increases of almost 10% with electricity costs rising faster than anticipated in some parts of the country over the past two months. The Australian Energy Regulator (AER) which sets safety net prices known as a default market offer as part of its annual review blamed the rises om increases to the cost of producing energy, which varies on how it is generated in different parts of the country. Australia’s energy system is in the middle of a major transition as ageing coal-fired power stations come to the end of their life and are largely replaced with renewable energy sources such as wind and solar farms, alongside big new investments in poles and wire infrastructure. The Australian Energy Market Operator separately announced it had increased its cost estimates for poles and wires projects by up to 55% since 2024 when it last outlined its Integrated Systems Plan, the most detailed outline of Australia’s future energy grid. AER chairwoman Claire Savage said there had been cost pressures on almost all components of the electricity supply chain, with network costs rising between 1% and 11% and retail costs going up between 8% and 35%. Sally Tindall, of comparison platform Canstar, said the average power bill would rise by around $228. “These electricity price hikes will knock the wind out of the sails for many families, just when they thought they’d turned the corner in the cost-of-living crisis,” she said. Tindall said the cost of producing electricity and maintaining the network were two of the biggest factors pushing prices up. The government has a ratgbet of 82% renewable energy generation by 2030, which is reliant in large part on a significant uptick in new energy projects coming online, and the construction of expensive new poles and wires infrastructure to connect it to the grid.
And Australian farmers have gone nuts as almond prices hit a 10 year high. While China was already a big buyer of Australian almonds thanks to a free trade agreement with Beijing and Canberra, the trade has effectively locked out California which provides 80% of global supply. This has provided Australian farmers with a rare opportunity to steal market share and bolster their pricing power as California growers grapple with the 35% tariff slapped on by Beijing. Stratamarkets, which tracks the global nut-tree market, said Australia was achieving a 10 to 15% premium to the US price. Over half of Australian almond exports are going to China but there is a good chance to steal market share from other regions, including the European Union, which is threatening to impose heavy tariffs on US almonds in retaliation to Trump’s policies. Almonds are one of Australia’s most valuable horticultural crops, alongside avocados, grapes and citrus. Last season, the generated $762 million in esports, up from $570 million the year before, according to Australian horticulture data.
And high US tariffs might be reviving rampant inflation but in Australia, the redirection of cheap Chinese goods is expected to provide relief for consumers and policymakers worried about stubborn cost pressures. Alibaba’s Taobao and JD.Com are among the latest Chibnese e-commerce platforms to enter the Australian market, seeking to tap into the bargain-starved country’s appetite for online deals. he expected flood of cheap goods from China, on top of a recent slowdown in inflation, is among several reasons the central bank felt confident enough to cut interest rates last week. It cuts inflation in an economy like Australia’s that manufactures very few finished products domestically. China’s factories are rushing to reach more new markets overseas as the domestic economy slows, with U.S. President Donald Trump’s sweeping tariffs making it much more difficult to access the U.S., the world’s largest consumer market. Frederic Neumann, chief Asian economist and co-head of global research at HSBC, said the expansion of Chinese e-commerce platforms overseas will intensify disinflation pressures, especially for consumer goods. “What the world is facing is a growing inflation divergence between the U.S. and other economies, with prices climbing in the former, and stabilising, if not outright declining, in the latter,” said Neumann. While the flood of Chinese goods has raised alarms in manufacturing-dependent countries in Southeast Asia, Australia’s overwhelming reliance on imports for many household items diminishes most such concerns.
And the Federal government is poised to sign off on a controversial extension to Woodside’s North-West shelf development after Anthony Albanese said the transition to renewable energy could not proceed without gas as a back-up. With a decision due within days – after the government twice delayed the final deliberation until after the election – the prime minister downplayed the significance of the extension on climate change, saying net zero emissions was different from no emissions whatsoever. “It is net zero, not zero,” he said. “You can’t have renewables unless you have firming capacity, simple as that. The prime minister’s comments in defence of gas came as he announced he would take his cabinet to Perth next week, where news of the multibillion-dollar project’s green light would be celebrated by the West Australian government and industry. The future of the North West Shelf gas export facility became a lightning rod during the federal election campaign as Labor faced pressure from climate groups to knock back the decades-long extension, while the WA government and the industry lobbied for its approval. Woodside has been waiting for more than six years for the state and federal green light to extend the life of the gas facility on the Burrup Peninsula. Environment Minister Murray Watt is expected to announce a decision this week. The government says it received the final recommendation last week from the Department of Environment. Asked on Monday whether Labor could justify approving the development in light of last week’s flooding on the NSW north coast, Albanese said renewables could not work without “firming” capacity as a back-up – even though gas from the project is unlikely to play a major role in Australia’s east coast energy market.
The Mongolian government has filed a secret lawsuit accusing Rio Tinto of being involved in political bribery relating to its Oyu Tolgoi copper mine. Mongolian officials alleged that Rio and its subsidiaries were “participating in the scheme of bribery and/or corruption in relation to the Oyu Tolgoi project”, accusing the company of “improperly transferring multimillion dollars of illegitimate personal gains” to a former senior politician. The filings also claim that Rio and its subsidiaries engaged in an “illicit and lucrative scheme” to target a second former Mongolian politician. The allegations of corruption relate to a time before Rio had majority control of Oyu Tolgoi, which is expected to be one of the world’s top five copper producers this decade. Rio and the Mongolian government are already in arbitration over at least $US438 million ($A674 million) of disputed taxes, and the new lawsuit in the British High Court is designed to help Mongolia argue its case in the arbitration by compelling the company to produce evidence. The alleged bribery occurred between 2008 and 2012. There is no suggestion that the lawsuit triggered Rio’s departing chief executive departing chief executive, Jakob Stausholm’s exit last week, more than four years since he took over following global criticism of the company for its destruction of ancient rock shelters in Western Australia.
The Albanese government will need to offer major subsidies to iron ore giants and global steelmakers to attract green iron investment in Australia, according to a think tank founded by Ross Garnaut and Rod Sims. Mr Sims, a former chair of the Australian Competition and Consumer Commission, said there was a danger of the Pilbara being left behind but questioned whether the big iron ore miners were cut out to produce green iron. “This isn’t the natural forte of an iron ore miner, it’s the natural forte of an international iron and steel company,” he said. The Superpower Institute, which also includes Climate 200’s Simon Holmes à Court on its board, is pushing for production tax credits of $170 a tonne, plus grants covering 30% of investment costs as well as other taxpayer support to make Australia a leader in green iron. The institute has produced what is touted as the most comprehensive research into the green iron opportunity and is urging the government to act now on rolling out incentives or be left behind by other nations. The prize is an estimated $400bn annual export opportunity. The push for taxpayer support sets up a re-run of the “billions for billionaires” debate sparked by Labor’s support for green hydrogen and critical minerals processing under its flagship Future Made in Australia policy. The price tag of building a green iron plant capable of producing a million tonnes a year is estimated at $7bn. If the government opted to back proponents of such a plant as recommended by the institute, they would be in line for $2.1bn towards the cost and $170m a year in tax credits. Fortescue executive chairman Andrew Forrest last week repeated warnings that WA’s Pilbara region, where his company makes all of its money, could become a wasteland unless there was a shift to green iron.
And that’s it for this week. And next week, I’ll be talking to Aaron Tighe who can tell us about sales techniques that leverage AI tools in the right way to help boost sales and the importance of active listening instead of overactive sales pitch spewing.
And I’ll be talking to EY economist Cherelle Murphy about the RBA’s latest rate cut and whether we can expect more this year.
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.
