Jeff Bezos plans to give away most of his $124 billion fortune to charity. Find out who gets the cash.
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 42 in our series for 2022 and today’s date is Friday November 18.
First, 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.
But now, let’s talk to James Bowe.
Jeff Bezos, the founder of Amazon, said that he would give away most of his money to charity, making him the latest billionaire to pledge to donate his vast fortune during his lifetime. Mr. Bezos is worth $124 billion, making him the world’s fourth-richest person, according to Bloomberg. In an interview with CNN released on Monday, Mr. Bezos, appearing with his girlfriend, Lauren Sanchez, said they were making preparations “to be able to give away this money.” He said that he wanted to give in a way that maximized the impact of the donations. “It’s really hard,” he said. “And there are a bunch of ways, I think, that you could do ineffective things,” he said. It was the first time that Mr. Bezos announced that he, like several other billionaires, would give away the bulk of his wealth. In 2020, Mr. Bezos pledged to give $10 billion to combat climate change as part of an initiative called the Bezos Earth Fund. Previously, his largest donation was a $2 billion gift to help homeless families and start preschools. On Saturday, the couple announced a $100 million grant for the singer and philanthropist Dolly Parton to direct to her chosen charitable causes, as part of an annual gift called the Bezos Award for Courage and Civility. Mr. Bezos has been criticized for not signing the Givng Pledge a commitment by many of the wealthiest Americans to give away at least half their fortunes, started in 2010 by Bill and Melinda Gates, Warren Buffett and others. (Mr. Bezos did not address the Giving Pledge in the CNN interview.) Mr. Bezos’ ex-wife, the author and philanthropist Mackenzie Scott, in 2019 signed the pledge after their divorce. Ms. Scott, who is estimated by Bloomberg to be worth $24 billion, has donated more than $12 billion to causes ranging from education to mental health. Ms. Scott, who recently filed for divorce from her second husband, had given to more than 1,200 groups as of March.
Twitter has reinstated “official” badges for high-profile accounts to combat a growing problem of users impersonating major brands. The grey badge reappeared below the profiles of businesses and major media outlets Friday. The identification marker was rolled out earlier this week before being scrapped. Twitter is struggling with impostor accounts since the company allowed paying subscribers to get verified blue check marks. One account claiming to be Nintendo Inc. posted an image of Super Mario holding up a middle finger, while another posing as pharma giant Eli Lilly & Co. tweeted that insulin was now free — forcing the company to issue an apology. A purported Tesla Inc. account joked about the carmaker’s safety record. “To combat impersonation, we’ve added an ‘Official’ label to some accounts,” Twitter Support tweeted on Friday. The world’s wealthiest man, who acquired Twitter last month for $44 billion, is facing a slew of challenges as top advertisers pull back from the platform amid concern over the company’s ability to tackle impostors and hate speech. Musk, who has also saw resignations among his leadership team, said this week in his first address to employees that the company could face bankruptcy.
Elon Musk’s efforts to reassure businesses that Twitter is safe for their brands have suffered another setback after one of the world’s largest advertising agencies advised clients to suspend their spending. Omnicom, an American marketing conglomerate with more than 5000 corporate clients, warned of the risk to companies’ public profiles on the social network. They should halt activity there “in the short term”. It recommended changes to Twitter after Musk’s $44bn ($A65.7bn) takeover have caused problems for companies. Twitter was forced to pause a scheme in which users were given “verified” status for a fee of $8 a month after fake accounts took advantage. Musk, 51, said at the weekend that Twitter’s subscription service would “probably” return at the end of the week. The platform has been experimenting with an “official” mark for paying advertisers. In a memo entitled “Twitter – continued brand safety concerns”, obtained by The Verge technology website, Omnicom described “evidence that the risk to our clients’ brand safety has risen sharply to a level most would find unacceptable”. The company, which has clients including Apple and McDonald’s, advised “pausing activity” on Twitter until it could “prove it has reintroduced safeguards to an acceptable level and has regained control of its environment”.
Thousands of contract positions have been slashed at Twitter as Elon Musk continues his aggressive firing spree. Twitter’s new owner Elon Musk is further gutting the teams that battle misinformation on the social media platform as outsourced moderators learned over the weekend they were fired. The lay-offs happened not long after November 4, when Twitter fired around half its full-time workforce by email. Twitter’s head of content moderation has since resigned from the company. .Twitter and other big social media firms have relied heavily on contractors to track hate and other harmful content. According to CNBC, 4400 out of 5500 Twitter contractors have been impacted by job cuts, with staff reportedly not given advance notice. Employees also told the publication the tech giant’s internal communications team have also all been let go recently. CNBC also reported that the terminated contractors – based across the world – only discovered they had been let go after losing access to Slack and other work platforms over the weekend. The latest round of terminations comes hot on the heels of Elon Musk;s decision to sack around half of Twitter’s workforce soon after taking over the company on October 28, after shelling out a staggering $US44 billion.
Digital asset exchanges are rushing to reassure clients that their funds are safe as the collapse of Sam Bankman-Fried’s FTX crypto exchange ricochets through the industry. Binance, the world’s biggest crypto trading venue, as well as smaller rivals including Crypto.com, OKX and Derebit have vowed to publish proof that they hold sufficient reserves to match their liabilities to customers. Coinbase, the US-listed exchange, has also sought to distance itself from the crisis that has engulfed FTX, the digital asset venue founded by Sam Bankman-Fried. The sudden collapse last week of FTX and Bankman-Fried’s trading shop Alameda Research, once viewed as pillars of the industry, has severely eroded confidence in the digital asset market. FTX had less than $1bn in easily sellable assets against $9bn in liabilities before it went bankrupt on Friday, the Financial Times reported on Saturday. Tether’s eponymous US dollar stablecoin — the largest in the industry — has faced approximately $3bn in redemptions in the past four days, according to data provider CoinMarketCap, underscoring how traders are yanking funds out of the digital asset market. Meanwhile, balances of ether, the second-biggest cryptocurrency, have dropped 7% in the past fortnight to 22.9mn across major crypto exchanges, including FTX, according to data from blockchain analytics platform Nansen. At current exchange rates, that points to a fall of about $2bn, which suggests some investors are pulling their coins from centralised venues in favour of storing them using their own systems.
Commonwealth Bank says lending growth, especially to businesses, helped lift its first-quarter cash profit by 2% to $2.5 billion.
Billionaire Mike Cannon-Brookes has scored a resounding victory at AGL’s annual general meeting (AGM), with all four of his independent director candidates appointed to the energy giant’s board. The result heaps pressure on the current chair and board members who opposed the election of three of the four. Current AGL chair Patricia McKenzie acknowledged the election of all four candidates nominated by Mr Cannon-Brookes’s investment company Grok Ventures, despite the current board urging shareholders only to vote for one — Mark Twidell — while rejecting Kerry Schott, Christine Holman and John Pollaers. Grok Ventures also welcomed the re-election of former Clean Energy Council chair Miles George to the AGL board, after his initial appointment a couple of months ago.
If investment firm Deutsche Bank’s forecasts hold true, Australia will enter a recession next year. However, the bank has not worked with the accepted definition of “technical recession” to produce its forecast. A recession is traditionally defined as two consecutive quarters of negative economic growth (GDP). Instead, Deutsche Bank looked at where it believes the unemployment rate is heading. It expects Australia’s unemployment rate will spike higher next year, as the economy slows. “We expect Australia’s unemployment rate to end 2023 at 4.5%, that is, one percentage point higher than the current unemployment rate at 3.5%” Deutsche Bank chief economist Phil O’Donoghoe said.
A deal put in place to placate Western Australia when its share of GST revenue was tumbling is on track to cost the nation’s taxpayers 10 times more than originally forecast, helping drive up federal government debt and interest payments to record levels. Pulled together by then-treasurer Scott Morrison in 2018 before being put through parliament by his successor, Josh Frydenberg, the deal that was originally expected to cost $2.3 billion is now on track to cost more than $24 billion. Morrison struck the deal at a time WA’s share of the tax pool had fallen to an all-time low of 30 cents for every dollar of GST raised within the state. Its iron ore royalties were effectively being redistributed among the other states and territories based on a Commonwealth Grants Commission formula that takes into account each state’s revenue sources and expenses. Under Morrison’s deal, from 2022-23 WA must receive a minimum of 70 cents in the dollar before increasing to 75 cents in 2024-25. When the policy was put in place, it was expected iron ore prices would fall and WA’s share of the GST pool would therefore rise. Instead, prices have soared. The Morrison government ensured other states and territories wouldn’t be worse off, which requires the top-up funding for the deal to come from outside the $82.5 billion GST pool. It was originally forecast to cost federal taxpayers $2.3 billion over three years, including just $293 million in 2021-22, but the surge in iron ore prices has meant more top-ups and for longer.
Business groups have sounded the alarm that this year’s climate summit could water down the world’s commitment to keep global warming below the potential catastrophe threshold of 1.5 degrees. As the rubber hits the road this week on negotiations for a concrete outcome from the two-week COP27 climate summit, business leaders have now joined climate activists in voicing concern. A group of more than 200 corporate executives and companies, including Amazon, IKEA, Microsoft, Nestlé and Unilever, have issued a statement demanding that the 190-plus countries at the negotiating table stick to the 2015 Paris Agreement’s 1.5-degree target. Climate activists have been warning about the possibility of “backsliding” on the Paris Agreement and the 2021 Glasgow Pact. On Saturday, the COP27 host and president, Egypt, admitted there was some substance to their fears
Brookfield has pledged a $20bn injection to fuel Origin Energy’s green ambitions after pouncing on the power giant with an $18bn takeover offer, winning an early nod from the board and backing from several high-profile shareholders. After teaming up with Mike Cannon-Brookes in two unsuccessful takeover offers for AGL Energy earlier this year, Canadian private equity giant Brookfield Asset Management has switched focus to rival operator Origin, combining with US partner EIG for a “knockout” $9-a-share bid. The deal, the third offer since talks started in August, includes a plan for Brookfield to invest an extra $20bn in Origin through to 2030 to build new renewable supplies and back-up energy capacity. Origin’s board has entered into an exclusive agreement with the pair and intends to recommend the deal to shareholders, should a binding offer be tabled after eight weeks of due diligence.
Although the end of Neighbours after almost 37 years on Channel Ten made it even harder to find Australian dramas on commercial TV, the country’s pay TV and streaming services have stepped in to become the dominant force in producing Australian scripted drama. The big jump in pay TV and subscription streaming services spending on Australian drama – up almost fourfold to $445 million in fiscal 2022 – has happened as the government examines whether to force the international streamers to allocate a certain amount of money for local content. Unlike free-to-air broadcasters and pay TV operators, international streaming services like Netflix, Amazon Prime Video, and Disney+ are not obliged to produce local shows. The shift will be on show on Tuesday when Foxtel debuts the new season of Upright, a drama starring Tim Minchin, while Nine-owned Stan will release Poker Face, a movie directed and starring Russell Crowe, on November 22. The spending by streaming services is almost double the $208 million shelled out by free-to-air broadcasters last financial year, according to a report by Screen Australia. That is a little below the five-year average spend of $227 million and the number of series produced fell for a third consecutive year.
Another 500 Medibank health records have been posted online, this time related to mental health and other illnesses, as more customers express anger at the insurer’s handling of the most invasive data breach in Australia’s history. The latest file takes the number of health records released online to 1243 and the hackers said they would pause for Medibank’s annual meeting on Wednesday and resume posting on Friday. The company said it was now “in the process of contacting customers” including those 500 record holders caught up in the latest data dump, related to a range of different mental health concerns and other illnesses. The insurer is urging its customers to reach out for support as it is “in the process of contacting” them, but many remain unaware that their data appears on the dark web.
A class-action lawsuit over Medibank’s huge data breach could find itself in front of the High Court arguing that Australians have the right to sue for invasion of privacy, a lawyer behind the legal action said. The lawsuit has already gathered the names of more than 15,000 current and former Medibank customers looking to sue their health insurer for exposing their personal details, and it’s expected to be filed “within a week”, said George Newhouse, the principal solicitor of Centennial Lawyers, one of two law firms behind the multi-billion dollar class action. It follows a cybersecurity attack discovered on October 12, in which a Russian crime gang spent roughly a month inside Medibank Private’s computer systems, mapping the systems and downloading sensitive identification data and health records of 9.7 million Medibank, ahm and international customers. Some of that data was exposed on the internet last week, after Medibank refused to pay the $US9.7 million ($14.5 million) ransom the criminals were demanding in exchange for deleting the data and for producing a “post-incident” report that would have shown Medibank how its system was compromised. Arguing that Australians have a right to sue for invasion of privacy is just one of several legal strategies being contemplated for the class action, Mr Newhouse said. Other options include suing for breach of contract, arguing that Medibank breached the terms of its privacy policy when it failed to keep customer data safe, and suing for breach of the Australian Consumer Law, Mr Newhouse said. He said a successful lawsuit that argued people have the right to sue for breach of privacy would set an important and much-needed precedent in Australia, and the question of whether such a right exists may ultimately need to be settled by the High Court. Such a right would allow individuals to take legal action against anyone breaching their privacy, raising the stakes for Australian businesses and encouraging them to do more to protect the data they hold, proponents of the right to sue for privacy invasion say. As part of its review of Australia’s Privacy Act, the Attorney-General’s Department is investigating whether “a statutory tort for serious invasions of privacy should be introduced into Australian law”, filling what the Australian Law Reform Commission has identified as “an increasingly conspicuous gap in Australian law, helping to protect the privacy of Australians”. Having the question settled through law reform would be helpful, Mr Newhouse said.
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Hundreds of thousands of ANZ, Commonwealth Bank and Westpac customers will be entitled to a share of $100 million in compensation after being sold dud insurance policies, following the settlement of three class actions arranged by law firm Slater & Gordon. ANZ and CBA confirmed on Monday, in releases to the ASX, they had settled the legal actions, after Westpac said the same in its full-year results last week. None of the banks admitted any legal liability in settlement deeds that are expected to be approved by the Federal Court early next year. The cases alleged the banks sold loan protection insurance to customers who were ineligible for coverage. This was due to various medical conditions or customers not being in employment, invalidating the terms of polices. The banks sold “consumer credit insurance” (CCI) policies, also known as “add-on insurance”, from 2010 but stopped doing so when problems with them came into focus during the Hayne royal commission. The Australian Securities and Investments Commission also targeted junk consumer credit insurance in a series of reports then regulatory actions, which have resulted in an additional $270 million being paid in remediation across the sector. ASIC brought a legal action against Westpac relating to some CCI policies with the Federal Court making findings against the bank earlier this year. Slater & Gordon settled a similar case against National Australia Bank in 2019 for $49.5 million. That related to NAB and MLC policies sold to 50,000 customers. The final number of customers holding dodgy policies at the other three banks is not known but is expected to run into the hundreds of thousands, according to documents with the court.
And that’s it for this week. And next week, I’ll be talking to Chris Hutchins, the CEO of the Profectus Group and he’ll be talking about how Profectus helps organisations with compliance and recovery issues with its Rebate Deal Management system (which keeps everything in one place and makes every transaction/deal/agreement easily referenceable) and its Audit system which tracks down any instances of overcharging (or if they’ve undercharged) and helps orgs make claims on those shortfalls. And I’ll be talking to economist Nicholas Gruen about citizens’ juries.
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.
