Musk now considering putting ALL of Twitter behind a paywall and charging ALL users a subscription fee to use Twitter
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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 41 in our series for 2022 and today’s date is Friday November 11.
First, I’ll be talking to Andy Cunningham, Senior Regional Director for Australia/NZ at Autodesk. We will talk about automating industries like manufacturing and construction. And I’ll be talking to KPMG economist Sarah Hunter about the RBA’s latest rate hike.
But now, let’s talk to Andy Cunningham.
Meta, the parent company of Facebook and Instagram, is expected to begin “large-scale” lay-offs this week that will affect thousands of employees. It follows job cuts at Twitter in the past week which hit about half of that social networking giant’s staff. Less than a fortnight ago, Meta reported that its profit more than halved to $US4.4 billion ($A6.9 billion) in the third quarter from $9.2 billion a year earlier. The drop in profitability is largely driven by the billions Meta is spending to build a future version of the internet called the metaverse that likely remains years away. On a conference call last month to discuss its earnings results for the third quarter, CEO Mark Zuckerberg said that he expects the company to end 2023 “as either roughly the same size, or even a slightly smaller organization than we are today.” The possible cuts come as tightened advertiser budgets and Apple’s iOS privacy changes have weighed on Meta’s core business. Once boasting a market capitalization of more than 1 trillion last year, Meta is now valued at a quarter of that, at about $250 billion
Twitter Inc. has begun rolling out software updates to charge users $7.99 a month to mark their accounts with a blue check, part of Elon Musk’s early efforts to boost revenue a little more than a week after taking ownership of the social media network. Details of the latest software versions began appearing Saturday on Apple Inc.’s App Store, promising new features added to the social-media company’s previous subscription service dubbed Twitter Blue. Saturday’s update marks the first significant product change since Mr Musk took over and capstones a week at the company that included widespread lay-offs, chaos and confusion as he raced to put his mark on things. It was unclear Saturday when the updated service would take effect for all users. In a bid to make Twitter less dependent on advertising – which makes up about 90% of its sales – Mr Musk had been hinting that he was leaning toward a $8-a-month subscription offering. Saturday’s changes apply to Apple users in the U.S., Canada, Australia, New Zealand and the U.K. According to Platformer, Musk had discussed putting Twitter behind a paywall. That would require a fee from every user.
Twitter Australia has been left a shell of its former self, with staff in its government relations, communications, marketing and news curation divisions almost entirely laid off as part of global job cuts at the social network. The sales team, which tries to bring advertisers to the platform, was least affected. The Australian eSafety Commissioner, Julie Inman Grant, who once headed public policy for Twitter in the region, panned the global job cuts which have liad of 50% of its employees. But a few days later, Twitter is reaching out to dozens of employees who lost their jobs and asking them to return. Apparently, some were fired by mistake and management realise their work and experience might be necessary to build the new features that Musk envisions. On Sunday AEDT Twitter began rolling out its plans to let anyone receive a blue tick, which has long indicated a verified account to stop impersonators, for $US7.99 ($12.40) a month. Elon Musk, Twitter’s new billionaire owner, said on the site that people with existing blue ticks who declined to pay would lose them within a “couple months”. The paid “blue tick” service is not yet available in Australia but is expected within days, with Musk saying the rest of the world would follow. Prominent Australian Twitter users are unlikely to pay. Australian Council of Trade Unions secretary Sally McManus, who has 126,000 followers, said she would not. Labor MP Julian Hill, who has almost 50,000, said he was unsure but concerned by events around Twitter. Former 7.30 NSW presenter Quentin Dempster, who has 55,000 followers, said he did not want to pay Musk. And leaders at most media organisations have indicated they would be unwilling to pay for their journalists’ ticks, though Musk has decreased the asking price since.
Consumer confidence has plunged below the levels seen during the global financial crisis, causing a record number of households to slash their Christmas spending plans. The widely watched Westpac-Melbourne Institute Consumer Sentiment Index dropped 6.9% in November, and is now only just above COVID-19 pandemic lows. Consumer confidence is at its lowest level since the 1990s’ recession, excluding a low point early in the pandemic Confidence levels fell dramatically after the RBA’s latest interest rate rise and a speech by its governor
Qantas is in discussions to import sustainable aviation fuel into Australia as what will be the world’s largest production site for used cooking oil and animal fat-based fuel nears completion in Singapore. Sustainable aviation fuel currently accounts for only 0.1% of all aviation fuel used worldwide, but most major airlines – including Qantas – back an industry goal to get to 10% by 2030. Qantas is working with Airbus to kickstart local supply and is also looking for imports. It currently uses a blend of SAF and conventional jet fuel on some flights out of London and has plans to do so for US outbound flights. BP supplies sustainable aviation fuek to Qantas in the UK, and it’s understood the Australian airline is talking to various suppliers in different ports as it considers supplies nearer to home.
Prime Minister Anthony Albanese has begun talks with independents and business groups, and workplace relations minister Tony Burke has pledged to consider more amendments, as the government intensifies efforts to get its industrial relations legislation through the Senate by December 1. But crucial Senate crossbencher David Pocock, who has not spoken to the Prime Minister since July, warned he was not “a rubber stamp” as he outlined more concerns during a meeting with Mr Burke and again requested controversial elements of the bill be delayed beyond Christmas. He wants the common interest stream of multi-employer bargaining, which would allow the process to be extended to all businesses, excised from the bill, so it can be properly scrutinised. Under the current proposal, businesses with fewer than 15 employees would be exempt from multi-employer bargaining, but Senator Pocock wants that defined as 15 full-time equivalents allowing more smaller businesses with an array of casuals and part-timers to be exempt. With the ACTU warning further concessions will render the bill “inoperable”, the government will use its numbers to push the Bill through the lower house on Thursday, so it can be ready for Senate debate when parliament resumes for the final fortnight on November 21. The nine lower house independents, including the six teals, harbour similar concerns as Senator Pocock and voted with the Coalition to try to void a time limit on debate imposed by the government. The government used its numbers to defeat the push. Although the teals’ votes don’t count, the government is keen to have their imprimatur for the Secure Jobs, Better Pay bill. Mr Albanese sought to assuage concerns during a meeting with the lower house independents on Tuesday.
Employers must train managers on how to solve mental health issues and give employees more say over how they do their jobs if Australia is to avoid a doubling in the number of workers’ mental health compensation claims by 2030. The warnings come from a new report released on Wednesday by the Committee for Economic Development of Australia, which urged employers to prioritise mental health to the same degree as physical health and said popular measures such as free yoga sessions and fruit boxes did little to improve employee well=being. Claims double by 2030 under the moderate-growth scenario and almost triple by 2030 under the high-growth scenario. “The trends are even more concerning when looking at the costs of claims,” the report said, adding that the median time off work for mental health claims was 27 weeks, compared to seven weeks for all serious claims. “Median compensation costs per claim for mental health conditions grew from $14,300 in 2000-01 to $45,900 in 2018-19,” the report said. “If recent trends continued, median costs per claim could triple in real terms by 2030.” Report author and CEDA senior economist Cassandra Winzar said mental health claims are more expensive than physical health claims as they are typically more complex. Ms Winzar said training bosses to manage mental health, involving employees in the design of their jobs and introducing organisation-wide mental health strategies were three effective measures that employers should pursue. This was more effective than easy stuff like free yoga and fruit boxes,
Skilled occupation lists could be axed and hundreds of visa sub-categories slashed to make way for a demand-driven immigration system where businesses have a greater role in determining what jobs are in short supply. Home Affairs Minister Clare O’Neill says every idea is on the table as Labor launches the biggest shake-up to the immigration system in decades on Monday, amid a historic worker shortage. Ms O’Neil says an overhaul of the “Byzantine mess” of rules and processes is badly needed as leading economies ramp up the fight for global talent, naming three policy and business experts to review the immigration system ahead of the May 2023 federal budget. Unions and industry are expected to play a key role in the review, which has been tasked with finding ways to protect workers from exploitation. Former public service chief Martin Parkinson, University of Adelaide law professor and temporary labour migration expert Joanna Howe, and former Deloitte partner John Azarias will present recommendations from the review to the Albanese government by February, allowing proposals to be considered for the May 2023 budget.
Australia’s number 3 lender Westpac reported a 1.4% drop in annual profit, hurt by pressure on margins from intense competition in home lending in the first half and a charge related to the sale of its life insurance unit.
Medibank won’t pay any ransom to the hacker that stole all its customer data, after revealing almost 500,000 health claims have been accessed. Australia’s largest health insurer says the names, dates of birth, address, phone numbers and email addresses of its 9.7 million former and current customers have been accessed, along with the Medicare and passport numbers of some customers. But Medibank chief executive David Koczkar said the hacker probably wouldn’t give the data back even if they paid a ransom fee and paying up could instead give other criminals an incentive to do the same thing. The hacker accessed health claims of around 160,000 Medibank customers, around 300,000 claims from offshoot ahm customers and around 20,000 international customers. No credit card or banking details were accessed. The insurer, which continues working with the federal government and other agencies, has also launched an external review into the incident.
Australia’s largest private health insurer Medibank Private faces its first class action over the hacking incident that exposed the personal information of 9.7 million current and former customers. It comes as threats have emerged on the dark web to release the customer data. Bannister Law Class Actions and Centennial Lawyers said they have joined forces to investigate the serious data breach of this group which comprises 5.1 million Medibank customers, around 2.8 million customers from the group’s budget ahm business, and around 1.8 million international customers. Other class actions are likely. Maurice Blackburn, which has already launched a class action-style claim against Optus for its recent data breach, has said previously that it is “monitoring” the situation. While both hacks are similar in size, with just under 10 million Optus customers affected, the Medibank incident is far more serious as the private health data of hundreds of thousands of Medibank customers was stolen Criminals claiming to have stolen the personal information of about 10 million Australians from Medibank, including sensitive health data, are claiming that they will release it in the next 24 hours in a post on a website linked to Russia-backed cybercriminal group REvil.
Crown Melbourne has been fined $120 million by the gambling regulator over breaches of its responsible service obligations The Victorian Gambling and Casino Control Commission (VGCCC) imposed the fines after it found the casino failed to prevent gambling harm by allowing customers to gamble for long periods without a break and said customers were sometimes allowed to gamble for more than 24 hours at a time. It also found the casino failed to comply with a statutory declaration to stop patrons using plastic picks and other devices to simulate “automatic play” on pokie machines. . The regulator says Crown is “on probation”, with a decision pending about whether Crown is suitable to continue to hold its licence
Star Entertainment will fight a second class action in the Victorian Supreme Court with Maurice Blackburn filing a shareholder claim against the casino giant. It follows the lead of Slater & Gordon, which filed a similar class action in March that alleged the company misled the market, breached continuous obligation laws and wiped billions of dollars from the company’s value. Maurice Blackburn’s claims are largely the same, relating to representations made by the company between March 2016 and March 2022 that the firm alleges were misleading or deceptive.
Snowy Hydro’s giant expansion is a year behind schedule and the official budget has jumped by $800m to $5.9bn, the latest crunch for an energy project deemed critical to replace coal in the power grid. Roger Whitby, Snowy’s acting chief executive, told a parliamentary hearing on Monday that the government-owned energy operator remained hopeful of reducing the delay but the setback could imperil the target of first power by mid-2025 and delivering the facility by early 2026. Any delay will also add to risks after the grid operator warned of worsening forecast reliability in NSW in 2026 and 2027 should it not hit the original deadline. The budget has jumped to $5.9bn from the original $5.1bn forecast, according to Mr Whitby. It is unclear whether the higher cost reflects a $400m contingency and $100m in environmental offsets, or whether it factors in any exposure after the builders filed claims for more than $2.2 billion in cost overruns. The details – disclosed at a Senate committee hearing – followed an admission from Snowy chairman David Knox that Energy Minister Chris Bowen had raised concerns about the tone and communication style of ousted chief executive Paul Broad amid tensions over a plan to transform its Hunter Valley gas plant into a green hydrogen facility. Mr Whitby told the Senate hearing the company could not yet estimate the Snowy Hydro 2.0 project’s final budget and completion date with any certainty, but confirmed the Covid-19 pandemic had put its contractors – the Future Generation Joint Venture, including Italy’s Webuild and struggling West Australian contractor Clough – badly behind schedule.
National Australia Bank has been chastised by the Federal Court and corporate regulator for not fixing a problem that resulted in customers being overcharged fees for more than two years after it had been made aware of it. NAB’s misconduct was “unconscionable” and a breach of its Australian financial services licensee duties to act fairly and honestly, the Federal Court said on Monday. The Australian Securities and Investments Commission sued NAB in February 2021, alleging it had overcharged 4874 personal banking and 913 business banking customers a total of $365,454 in “periodic payment fees” over four years. (These were $1.80 for periodic payments to other NAB accounts and $5.30 for payments to accounts at another bank.) Overall, the offences took place over a longer period of time and resulted in overcharging in the multiple millions of dollars. Over 12 years, 1.6 million transactions were hit with the wrong fees; NAB has paid around $8.3 million in remediation to affected customers. Federal Court judge Roger Derrington said the bank displayed “serious apathy” towards customers’ continuing lack of knowledge, and acted in its own self-interest by continuing to operate a system it knew was wrongfully deducting the fees from early 2017.
Those hoping to get a new iPhone for Christmas will likely be left disappointed as Apple reveals it is experiencing production disruptions. Tightening Covid-19 restrictions are impacting output at Apple‘s main assembling facility in Zhengzhou, China. “The facility is currently operating at significantly reduced capacity,” the tech giant said in a statement. “Customers will experience longer wait times to receive their new products.” The world’s largest iPhone factory, owned by Foxconn, was locked down for a week on November 2, setting back production of the tech product. The wait time for a new iPhone 14 or iPhone 14 max is currently four-five weeks, according to Apple‘s website, with click-and-collect options unavailable for most stores. China is taking a “dynamic-clearing” approach to kerb rising Covid-19 case numbers, with restrictions including lockdowns, quarantining and rigorous testing. The country is reporting higher numbers of new infections, with a significant portion of those in Zhengzhou, where major plants are located. China recorded its highest daily tally of new cases in six months on Sunday, with 5,643 new infections.
And that’s it for this week. And next week, I’ll be talking to James Bowe, Co-founder of new Aussie fintech provider OwnHome which helps Australians buy their own property in this tough market. And I’ll be talking to AMP Capital chief economist Shane Oliver about the market and economic outlook for 2023.
In the meantime you can catch me on Facebook, Twitter, Instagram, LinkedIn and YouTube. And if you want leave a comment. For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business on the Apple podcast store or on my website leongettler.com.
Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week.