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, subscribeto 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 42 in our series for 2024 and today’s date is Friday November 15 .
First I’ll be talking to Andrew Job who developed Plotlogic, a tech outfit that helps customers, including BHP, Vale, South32 and leading lithium company Pilbara Minerals, to precisely understand the location and material properties of every rock in their mine in real-time, increasing output and reducing waste and environmental impact.
And I’ll be talking to EY economist Cherelle Murphy about Australia’s latest inflation and the response of the RBA.
But first, let’s talk to Andrew Job
So what’s happening the news?
A Wall Street strategist has warned that Trump’s proposed trade war raises the chances of a US recession to 75%, In a Friday note, Peter Berezin, the chief global strategist for BCA Research, increased the probability of an economic recession to 75% from 65%, citing the risk of a new trade war under Trump. “The prospect of a new trade war more than offsets the other pro-business parts of Trump’s agenda. With the labor market already weakening going into the election, the odds of a recession have risen,” Berezin said. On the campaign trail, Trump proposed implementing universal tariffs of 10-20% on goods imported into the country and a 60% tariff on goods from China. Berezin said those tariffs would likely depress corporate investment and lower real household disposable income for consumers, representing a double economic whammy. Berezin cited a study from the Budget Lab at Yale that estimates Trump’s proposed tariffs could reduce real disposable income for the median US household by $1,900-$7,600. Some have argued that Trump’s tariff proposals are empty threats meant to to get leverage when negotiating with other countries, but Berezin isn’t so sure. “Whether Trump carries out these threats is open for debate. The consensus view among market participants is that, for the most part, he will not. Once again, I suspect the consensus is too optimistic,” Berezin said. Berezin is also worried about a potential surge in interest rates since Trump’s election win, arguing that they’re at “restrictive levels” that would put downward pressure on economic growth.
Trump’s coming return to the White House has significantly upended the outlook for the US Treasury market, where October’s losses had already wiped out much of this year’s gains. Less than two months after the Federal Reserve started pulling interest rates back from a more than two-decade high, the likelihood that Trump will cut taxes and throw up large tariffs is threatening to rekindle inflation by raising import costs and pouring stimulus on an already strong economy. His fiscal plans — unless offset by massive spending cuts — would also send the federal budget deficit surging. There remains considerable uncertainty about the precise policies Trump will enact. Rick Rieder, BlackRock’s chief investment officer for global fixed income, has been telling investors they shouldn’t expect bond prices to rise from here. He said the recent backup is a chance to lock in elevated yields on short-term bonds, but he remains cautious about longer-term debt given the current uncertainty.
Donald Trump has ruled out naming Mike Pompeo, the former secretary of state and supporter of AUKUS, to his second administration, as he moves to build out his cabinet after winning the US presidential election against Kamala Harris. Trump announced that he would not be including Pompeo in the government in a post on Truth Social on Saturday. He also said that Nikki Haley, the former US ambassador to the UN who challenged him for the White House, would not be joining. Both Pompeo and Haley have been critical of Trump before backing him for president in the general election, and his announcement highlights how he is planning to staff his administration with loyalists who have not crossed him recently. Pompeo was seen as a top contender for defence secretary in Trump’s second administration, having already served as CIA director as well as secretary of state. Pompeo has been a staunch advocate for US aid to Ukraine as it battles the Russian invasion, putting him at odds with Trump and his allies who have been sceptical of helping Kyiv. He has criticised Trump in the past for his profligate spending policies and his mishandling of classified documents. Pompeo warned that Republicans needed to be beware of “those with fragile egos who refuse to acknowledge reality” — which was widely viewed as a swipe at Trump. But this year Pompeo said he would be open to serving in the administration if asked. Haley was much less likely to join Trump for his second term after heavily attacking him during the Republican primary, and criticising his campaign in the final weeks of the race.
A US-China economic split under Donald Trump would undermine Labor’s plan to ramp up the export of green metals and hydrogen due to interruptions in global trade, according to Treasurer Jim Chalmers. Australia was more exposed to a global trade war than other countries because trade was worth about 50% of Australia’s economy, compared with trade in goods and services accounting for about 25% of the US economy, he added. “Nobody wins from a trade war, but we have more at stake than most,” Dr Chalmers told the Australian Institute of International Affairs conference on Monday night. US president-elect Donald Trump has threatened to impose tariffs of 10-20% on all imports into the country and a 60% tariff on Chinese goods. Treasurer Jim Chalmers warned that Australia will suffer from lower economic growth and higher prices because of Trump’s policies, making Labor’s bid for re-election even harder in a contest that will be dominated by the cost of living. Revealing details of Treasury analysis of the economic impact of Trump’s return to the White House, Dr Chalmers said Australia won’t escape the impact of a US-China trade war if the president-elect goes ahead with his threat to slug hefty tariffs on Chinese goods. Economists have estimated Trump’s policies could shave as much as 1.5% off the size of the Australian economy. With Australians due to go to the polls by May at the latest, it hasn’t been lost on either side of politics that Americans’ discontent over stubbornly high prices was a key factor in Trump’s election. Dr Chalmers said Australia’s floating exchange rate and independent central bank would help mitigate against some of the effects of a trade war. He warned the global impact would be much more substantial. “The timing of this, and the responses and ramifications that might follow … are difficult to predict. But we wouldn’t be immune from escalating trade tensions that might ensue.” It remains to be seen if Trump’s stated agenda is more an ambit claim heading into negotiations with China, or whether a Republican-led Congress would moderate some of his excesses. Economists believe that any slowdown in the Chinese economy because of US tariffs would hurt Chinese demands for Australian goods and services. Dr Chalmers’ warnings of the economic turbulence a Trump presidency signifies for Australia echo similar sentiments expressed by Treasury Secretary Steven Kennedy, Reserve Bank of Australia Governor Michele Bullock, and two of the country’s top bank bosses last week. ANZ chief executive Shayne Elliot said Trump’s inflationary policies could mean any cut to Australian interest rates wouldn’t come until later next year and would be less frequent than previously expected.
Australian packaging billionaire Anthony Pratt has confirmed on LinkedIn that he is moving permanently to the US after receiving a green card last month, “Honoured to be granted my Green Card for permanent USA residency last month,” he said in his post and cited several reasons for the move, including the fact his family are all US citizens and his significant business interests in the US. “Over the past 30 years, we have invested to build 70 factories in America, creating 12,000 well-paying American manufacturing jobs.” Mr The announcement comes after Australia’s richest woman, Gina Rinehart of Hancock Prospecting, lauded Mr Trump’s policies and travelled to the US to show her support for the US president-elect. Pratt’s privately held Pratt Industries is one of the fastest-growing players in America’s $US35 billion ($53 billion) packaging sector. What he didn’t say was that he was moving permanently to the US because of his close personal relationship with president-elect Donald Trump, starting with his claim of winning $450,000 by betting $100,000 on Trump to win the 2016 election. Trump is very much like Pratt’s late father Richard, the billionaire founder of Visy. Read into that what you will. Pratt is a long-time Trump believer. This year, a CNN report aired allegations of Pratt trying to buy access to Trump. In a draft copy of a speech Pratt delivered to a Jewish group in late 2019, he describes how he “became a member of the Mar-a- Lago resort” as a “strategic” play to secure access to Trump.
Victims of work-related sexual harassment do not have the option of reporting incidents anonymously at more than three in ten medium and large companies, discouraging affected employees from coming forward and seeking support. New research from the Workplace Gender Equality Agency indicates that almost all employers have a formal policy on work-related sexual harassment and discrimination, as well as comprehensive processes through which employees can disclose incidents. But 32% of companies with 100 or more employees are yet to set up anonymous reporting channels that allow employees to keep their identities hidden, fuelling the underreporting of work-related sexual harassment and restricting employers’ ability to eliminate it. The data comes from WGEA’s soon-to-be-published annual employer census, based on responses from more than 7000 medium and large employers covering more than 5 million employees. This year’s census was the first in which WGEA asked employers how they were preventing and responding to work-related sexual harassment, after the landmark Respect@Work Report recommended the agency collect more data to understand the progress employers were making to eliminate discrimination and harassment in the workplace. While 85% of chief executives were highly engaged in reviewing, approving and communicating harassment policies, the same could not be said for 45% of company boards. “There’s a bigger role for boards to [play] in terms of … setting that tone right from the top,” WGEA chief executive Mary Wooldridge said. Employers have been legally required to stop sexual harassment and discrimination before it happens since a new “positive duty” was introduced in December 2022. Ms Wooldridge said while the new data in this year’s census showed “a lot of work was underway” to eliminate work-related sexual harassment, it also revealed many employers were failing to meet the commission’s seven standards. “There’s still clearly quite a lot of work to do,” she said. For example, sex discrimination commissioner Anna Cody said it was “concerning” that only 51% of employers had reviewed their sexual harassment policy with workers and unions, which was required under the positive duty.
A senior Nine news executive engaged lawyers within 24 hours of her sudden exit from the media giant last week, amid concerns that the staff clean-out – prompted by the devastating findings of the independent review of the company’s workplace culture – could be met with a wave of legal claims. It is understood Nine’s Brisbane news director Amanda Paterson contacted high-profile employment and media lawyer John Laxon on Friday, after she was called into a meeting on Thursday at the station’s Mount Coot-Tha headquarters and immediately dismissed. Paterson’s departure comes as several senior employees at Nine continue to be investigated over complaints of alleged misconduct that were revealed last month with the release of the cultural review. There is some concern within the company that if “due process” wasn’t strictly followed in relation to the legitimacy of the allegations raised in the workplace review, the situation could become a “legal nightmare”. However, there has also been pressure on management to act quickly, amid frustration among staff that the company has been slow to “weed out” the known perpetrators of unacceptable workplace behaviour. Paterson, who has worked at Nine for 31 years, was a close associate of disgraced news boss Darren Wick, who left the company in March after a female employee lodged a complaint of serious misconduct against him.
Consumer advocacy group Choice has wildly overstated the difference in prices between the big supermarkets and discount retailer Aldi, analysis by a Wall Street investment bank has found. JPMorgan’s price check of some 100 home brand products across the big supermarket groups found the difference between Woolworths and Coles, and Aldi, was 8% and 9% respectively, well below the figures published by Choice in a survey commissioned by the federal government. Choice had put the Woolworths price as 35% more expensive and the Coles price 30% higher. The latest Choice report used a basket of 14 commonly bought grocery items like milk, bread, sugar, pasta and fresh fruit and vegetables to conclude that Coles and Woolworths were about a third more expensive than Aldi. The survey included IGA for the first time, and found it much more expensive. The cost of everyday groceries has become a significant political issue. Both Labor and the Coalition have sought to pressure big supermarkets into dropping prices, with Peter Dutton suggesting the government should be able to break up retailers. The Choice funding is part of a string of measures unveiled by the Albanese government as it attempts to convince voters that it is trying to reduce the cost of groceries and keep big supermarkets in check. But JPMorgan analyst Bryan Raymond claimed Choice’s findings did not stack up. The consumer advocacy group does not say which products it is comparing, although it mixes home brand and branded items. As a discount retailer, Aldi sells few products that are not its own brands and keeps costs lower by stocking a far smaller range than its bigger rivals. “To effectively compare prices, you need the right weighing of the products, you need unit price comparisons to adjust for differences in pack size, you cannot compare private label products across tiers or to branded products, and you need a much larger sample size,” said Mr Raymond of the Choice surveys. “Short-term prices on promotion can skew prices.”
And that’s it for this week. And next week, I’ll be talking to Andy Cunningham, the Senior Regional Director, Australia & New Zealand at Autodesk about the digital maturity of Australian Design and Make companies.
And I’ll be talking to Indeed economist Callam Pickering about Australia’s latest jobs figures.
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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Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week.
