Talking Business November 12 2021

Social unrest: Aussie teens jump off Instagram

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 41 in our series for 2021 and today’s date is Friday November 12.

First, I’ll be talking to Damian Morgan and Kiel Glass who founded the start-up SafeStay which which provides safety audit inspections for short stay accommodation in response to the tragedy of short-stay accommodation incidents including fraud, injury and even fatalities. And I’ll be talking to AMP Capital chief economist Shane Oliver about the prospect of the RBA raising interest rates.

But now, let’s talk to Damian Morgan and Kiel Glass

Facebook’s Instagram platform has seen a dramatic slump in use by young Australians, ­according to confidential internal documents. Prepared for Facebook executives, the research dated March 2021 warns of “concerning” and “problematic” declines in the amount of time teenage users in Australia are spending on the photo-sharing platform — down 9% to 36 minutes a day over six months — and how much content they are producing. The research, part of a tranche of documents lodged with the US Securities and Exchange Commission, shows the fall in use was greater in Australia than in other markets including the US, France, Britain and Japan. The amount of content being produced by teenage users in Australia also fell 7%, the data reveals. The disclosure of falling Instagram consumption follows the release of internal research, first published in The Wall Street Journal in September, that concluded the platform exacerbated feelings of anxiety, depression and body image issues for teenage girls. “We make body image ­issues worse for one in three teen girls,” one slide from a 2019 presentation read. The fall in the use of Instagram in Australia and in other major markets comes as Facebook ­grapples with serious problems in attracting and retaining young users on its other platforms. 

General Electric said it would split into three public companies as the storied US industrial conglomerate seeks to simplify its business, pare down debt and breathe life into a battered share price. The split marks the end of the 129-year-old conglomerate that was once the most valuable US corporation and a global symbol of American business power. The Boston-based company said the three businesses would focus on energy, healthcare and aviation. It will combine GE Renewable Energy, GE Power, and GE Digital and spin off the business in early 2024. GE will also separate the healthcare company, in which it expects to retain a stake of 19.9%, in early 2023. Following the split, it will become an aviation company, helmed by GE chief executive Larry Culp.

News Corp Australia has posted a $60.7m loss as the pandemic exacerbates ongoing upheaval throughout the media industry. The company blamed a $167m hit to advertising revenues on regional and community closures or digital transitions. More than 220 Australian newsrooms have shrunk or vanished since the start of the pandemic, while 111 have opened or expanded. News Corp Australia’s financial report for its publishing and printing group revealed the $60.7m loss to Asic this week – less than the $151.4m the year before. Its 2020-21 report shows a $167m decline in advertising revenue, “reflecting the closure or transition to digital of regional and community newspapers”. Those closures, though, were also partly responsible for a drop in expenses of $58m.

Australia’s federal election is most likely to be held in May next year, with the Morrison government preparing to fight the poll on an expected economic bounce-back from COVID-19. The public service in Canberra is undertaking preparatory work for an April budget, with bureaucrats being told to be prepared to cut short their summer holiday plans in January. No final decision had been made on an election date, but the odds were firming for an April budget, followed by a May election. With the Coalition trailing Labor in opinion polls, Prime Minister Scott Morrison wants to make the election a referendum on which side of politics can be trusted to manage the economic recovery from COVID-19. Labor will focus on the slow start to the vaccine rollout, the Prime Minister’s trustworthiness and the Coalition’s lack of conviction for action on climate change. Treasury, the Reserve Bank of Australia and market economists are forecasting strong economic growth from late this year as cashed-up consumers reopen their wallets after lockdowns in NSW, Victoria and the ACT. A booming economy is expected to be fuelled by more than $200 billion of excess household savings, high vaccination rates, an easing of health restrictions, international and state borders reopening and low interest rates. The RBA tips an economic bounce-back, forecasting robust economic growth of 5.5% next year, although it expects wages growth and inflation pressure to remain moderate.

And as part of that, Prime Minister Scott Morrison has rolled out a policy on electric vehicles. Electric vehicles once derided by Scott Morrison as ending the weekend will be the focus of a $500 million strategy projected to create more than 2600 jobs. The prime minister anticipates $250 million in federal “future fuels” funding will be matched by private investment aiming to reshape Australia’s transport sector and put up to 1.7 million electric vehicles on roads by 2030. Investment will focus on public and household electric vehicle charging, as well as electrifying commercial fleets, and heavy and long-distance vehicles. More than 50,000 households and 400 businesses would have access to charging infrastructure, alongside at least 1000 public charging stations. The government also anticipates up to 84% of the population would be able to access fast charging stations. Making sure the electricity grid is ready for widespread EV use is expected to avoid upgrade costs of $224 million this decade. The government strategy does not plan to manufacture EVs in Australia. It rules out consumer subsidies and concessions to help people buy EVs or mandating a phase out of new petrol and diesel-powered vehicles. It has been criticised by electric vehicle manufacturers. It has nothing like Joe    Biden’s EV tax credits that could nudge millions of Americans to swap their 2005 Honda Civic for a brand-new Nissan Leaf. NRMA spokesman Peter Khoury said the two key issues facing Australian consumers were the access to charging infrastructure and the price of vehicles. During the past four years, the organisation has rolled out more than 44 fast-charging stations across regional Australia. Opposition Leader Anthony Albanese said the government had changed its tune on electric cars in the lead-up to an election campaign. He said Australia risked being left behind if it did not do more to increase the number of electric vehicles. Britain, Japan, France and Germany have pledged to ban sales of combustion engines between 2025 and 2030, while Norway leads the world in electric vehicle ownership, driven by a range of incentives such as waiving import tariffs and sales tax as well as registration fees. In 2020, it became the first country where EV sales outstripped petrol, diesel and hybrid vehicle sales combined.

The Morrison government has pledged up to $1 billion more to develop low-emissions technologies via the establishment of a new fund that will give it and private-sector investors an equity stake in start-ups. As part of the government’s plan to reach net zero emissions by 2050,  the Low Emissions Technology Commercialisation Fund, to be administered by the Clean Energy Finance Corporation (CEFC), will focus on developing “emerging technologies” The net zero plan says these emerging technologies, currently fledgling in nature, will be responsible for delivering 15% of the requisite emission reductions by 2050. Such technologies include changes to livestock feed to reduce methane emissions, more efficient glass coatings on solar panels, methods to measure soil carbon, software improvements, lighter and more efficient batteries, and the direct atmospheric capture of carbon dioxide and storage underground. The government will match private investor contributions of up to $500 million with the aim of raising $1 billion. Unlike the CEFC, which is a loan fund, the new low-emissions fund will be an equity vehicle. If established, it will fill a gap in the Australian market, where small technology-focused start-ups are often considered difficult to finance.

The chief executive of electric vehicle charging infrastructure company Evie Networks says a deal with Jack Cowin’s Hungry Jack’s fast food chain is a forerunner of a “paradigm shift” in its early stages where convenient sites in cities will gradually replace a traditional trip to a service station. Chris Mills says convenience is the No.1 priority for electric vehicle owners, most of whom will continue to recharge vehicles at home or in the workplace. Putting fast-charging infrastructure at locations such as quick-service restaurants, libraries or local council hubs, which are part of the normal patterns of daily life, is central to the continued trialling of the best locations. Mills says it’s unshackling people from service stations. The first of the fast-charging units is located at the Hungry Jack’s outlet at Cabramatta in Sydney’s south-west. Mr Mills said a further seven sites in other cities at Hungry Jack’s outlets are in the planning stage.

Commonwealth Bank of Australia has struck a big blow in its bid to take on global big tech, leading a $US100 million ($A134 million) funding round for leading artificial intelligence platform and forming a partnership it says will help it release smarter products and make faster decisions than rivals. is one of the most highly rated AI platforms in Silicon Valley. As well as being a venture capital style investment for CBA, the platform will be used across the bank’s many systems, such as customer rewards, online retail, credit assessment and fraud detection, to let it deliver individually tailored offers and fintech-style services. As well as making its existing apps smarter, CBA is hoping the ability to analyse its vast amounts of data more efficiently, with the platform, will give it a jump-start on its rivals among the big four banks in inventing future products. CBA is the latest in a stream of major global financial institutions to invest in the company, as well as using its technology to develop AI-based products. had a pre-money valuation of $US1.6 billion, and counts Goldman Sachs, Wells Fargo, Capital One and the investment arm of Chinese insurance giant Ping An as investors and customers.

The big four banks will not appear before the Senate inquiry into the effectiveness of the country’s anti-money laundering regime, despite being individually invited to discuss the level of investment needed to avoid systemic breaches of laws to prevent financial crime. Commonwealth Bank, Westpac, ANZ Bank and the National Australia Bank are responsible for reporting the bulk of suspected criminal activity   passing through Australia’s financial system and were each invited by the legal and constitutional affairs committee to participate in public hearings starting Tuesday. The Senate approved a motion by Labor Senator Deborah O’Neill in June to launch a formal inquiry into the effectiveness of laws, regulators and companies tasked with preventing financial crime. The committee has since called on a range of law enforcement, academic and industry participants to participate in two days of public hearings. The banks have declined individual invitations to appear before the committee and will instead be represented by the Australian Banking Association (ABA), a lobby group representing 21 Australian banks. CBA and ANZ declined to comment on the non-attendance. A spokesman for NAB said executives were unable to attend because the hearings coincided with NAB’s full-year results, scheduled for Tuesday, but added the bank is “happy to engage” with the inquiry at another time.

NAB’s cash profit climbed 76.8% to $6.56bn for the 12 months ended September 30 from last year, the bank said on Tuesday in an ASX statement. Excluding lumpy notable items, profit was up 38.6%. The result exceeded expectations with analysts pencilling in an annual NAB profit of $6.45bn, according to Bloomberg estimates. NAB rounds out the profit results for three of the big four that have a September 30 balance date, while Commonwealth Bank ruled off its year on June 30.

BHP, the nation’s largest mining company, is continuing its reduce its exposure to fossil fuels with a deal to sell two Queensland coking coal mines to ASX-listed Stanmore Resources. The deal, under which Stanmore has agreed to pay $US1.2 billion ($A1.6 billion) to acquire BHP’s 80% stake in the BHP-Mitsui Coal joint venture’s Poitrel and South Walker Creek mines in the Bowen Basin, marks the latest step in the company’s push to better-align its portfolio with global decarbonisation efforts. If a deal is completed, BHP’s only remaining coking coal mines would be its higher-quality hard coking coal mines jointly owned with Mitsubishi, which it believes will be increasingly needed to meet the world’s ongoing steel demand, including to build clean-energy infrastructure such as wind turbines. BHP has been actively looking to get out of thermal coal, which is used in power generation and ranks as the world’s biggest source of greenhouse gas emissions. The miner said it remained in the process of looking for a buyer for its last thermal coal mine, at Mt Arthur in the NSW Upper Hunter.

Juggernaut Aussie conglomerate Wesfarmers has announced it will acquire Australian Pharmaceutical Industries Limited (API), the parent company of well-known household brands Priceline and Soul Pattinson Chemists for $763m  The acquisition will grow Wesfarmers’ already impressive list of brands including Bunnings, Kmart and Officeworks. Wesfarmers already owned a 19.3% stake in API, which also owns Clear Skincare, Pharmacist Advice and catalogue program Pharmacy BestBuys. Priceline and Priceline Pharmacy is one of Australia’s biggest pharmaceutical and beauty retailers, boasting more than 420 stores nationwide.

Sydney Airport has agreed to a takeover offer from an IFM-led consortium following weeks of negotiations and due diligence. The offer is worth $8.75 a share and will be done via a scheme of arrangement. The bid values Sydney Airport’s equity at approximately $23.6 billion. The deal faces scrutiny from the Australian Competition and Consumer Commission because IFM Investors holds stakes in nine other Australian airports including Melbourne and Brisbane. The watchdog already started taking submissions on the consortium’s offer from airlines and aviation services companies last month. The mega deal must also gain merger clearance from the European Union and Australia’s Foreign Investment Review Board.

According to Deloitte’s Retailers Christmas Survey 2021, they are putting their faith in the consumer more than any other time in the survey’s 10-year history, as the country emerges from the COVID-induced lockdowns with a spring in its step. The survey report assesses retailer sentiment for the approaching Christmas period, and identifies key trends, expectations and priorities for Australian retailers for 2022. Key survey findings include:

  • 80% of retailers expect to see sales growth in 2021, up 20 percentage points from 2020
  • 52% expect sales to bounce back rapidly post lockdowns
  • 42% believe new product ranges and personalised marketing will be the most important focus areas to boost sales
  • 60% say more than half of their Christmas sales will be digitally enabled in some way
  • 55% are concerned (and 26% very concerned) about receiving sufficient stock for Christmas
  • 72% highlight shipping costs as having a material impact on their input costs
  • Nearly 90% expect trading conditions to improve (or stay the same) over the next 12 months.

And that’s it for this week. And next week, I’ll be talking to Jaen Snyman, Empired practice manager for the modern workplace. We’ll examine how the remote working trend has dramatically accelerated over the past 12 months which means organisations now increasingly take a Cloud First approach to facilitate daily production. And I’ll be talking to CommSec chief economist Craig James about market trends ahead.


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