Rate cut hopes crushed. With inflation set to hit 3.7% in 2026, relief is some way off.
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.
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.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 39 in our series for 2025 and today’s date is Friday November 7.
First, I’ll be talking to I’ll be talking Peter Kokkinos, VP & Managing Director, Asia Pacific at Udemy, a platform for skill development. We’ll talk about the growth of artificial intelligence and why companies should learn how to use it.
And I’ll be talking to independent economist Saul Eslake about the uncertainty of the new economic era.
But first let’s talk to Peter Kokkinos
So what’s happening in the news?
So — after months of icy relations, Chinese leader Xi Jinping and President Donald Trump finally sat down face to face at a South Korean airbase this week. The meeting lasted less than two hours, but the fallout’s already clear: China walked away with most of what it wanted. Now, no, they didn’t sign some big sweeping trade deal. What they did agree to was more like a truce. Think of it as a “pause” on the trade war while both sides try to work toward something bigger. Here’s what went down: Xi secured a 10% cut to the new 30% tariffs Trump had slapped on Chinese goods this year. In exchange, China promised to ramp up efforts to curb fentanyl exports to the US — that’s been a major flashpoint politically for Trump. Beijing also got Washington to hold off on a rule that would’ve massively expanded the number of Chinese companies banned from buying sensitive US technology. That’s a big one — analysts say it could’ve affected as many as 20,000 firms. And to sweeten the deal, China agreed to buy more American soybeans and farm products — though, fun fact, even with those new commitments, they’ll still be buying less than they did before the trade war kicked off. Both sides also paused a few other retaliatory measures — things like port fees and extra tariffs — basically agreeing to cool things down for a while. Now, on paper, it looks like a reasonable exchange. Trump can say he’s protecting American jobs and getting tough on drugs, and Xi gets tariff relief and more control over the tech narrative. But zoom out, and the takeaway’s pretty clear: Beijing’s strategy of playing the long game with Trump seems to be working. Chinese state media is loving it — posts are popping up online saying things like “China really nailed this tariff war” and “Trump’s cleaning up his own mess.” Still, there are some limits here. Even with this new truce, Chinese exporters are still facing tariffs that average around 50% — one of the highest rates ever imposed by the US. And Beijing’s still locked out of top-end American chips — which matters a lot in the race for AI dominance. So, short version? Xi’s team won this round, but the bigger game — the one over tech, data, and global dominance — is still very much on.
Donald Trump has weighed in on the latest royal controversy, saying he feels “very badly” for the royal family after King Charles stripped Prince Andrew of his titles over his ties to Jeffrey Epstein. Andrew — now going by Andrew Mountbatten Windsor — is also being moved out of his longtime home at the Royal Lodge on the Windsor estate. The move follows growing concern inside the royal household about the damage from his ongoing connection to Epstein, the convicted sex offender. Trump, who’s had his own past links to Epstein, spoke to reporters aboard Air Force One, calling it “a tragic situation” and saying “it’s too bad — I feel badly for the family.” He’s long spoken warmly of the royals — remember that state visit back in September where he praised King Charles and the “special relationship” between the US and the UK? But the Epstein issue just won’t go away — for Andrew or for Trump. Images of Trump and Epstein together were even projected onto Windsor Castle during that visit, with a soundtrack questioning their relationship. It’s a scandal that continues to cast a long shadow.
No surprises out of the Reserve Bank of Australia this week. The RBA has decided to keep its key interest rate right where it is — at 3.6%. No shock there — that move was widely expected. But what did catch people’s attention was the tone. The central bank’s message was a bit firmer this time, warning that inflationary pressures are proving stickier than they’d like. All nine board members voted unanimously to hold steady, saying that future rate moves will depend entirely on the data coming in over the next few months. Now, here’s the backdrop: consumer prices came in hotter than expected last quarter, and the job market’s still tight. Both are signs that inflation could hang around longer than hoped. RBA Governor Michele Bullock said the rate-cutting cycle might be just about done. The bank now expects inflation to stay above its 2 to 3% target range until at least the second half of next year. Bullock admitted the RBA was caught off guard by the jump in underlying inflation — up to 3% in the September quarter — and she made it clear that bringing inflation back under control is now a bigger priority than protecting jobs. Here’s how she put it: “It’s possible that there are no more rate cuts. It’s possible there’s some more. But as I said earlier, we didn’t go as high, so we might not have to come down as far.” She did stress that the board still cares about employment — that’s part of their mandate — but right now, the bigger concern is making sure inflation gets sustainably back in the band. Bullock’s hoping some of the recent price spikes — things like travel, fuel and council rates — are temporary. But she warned that other pressures, like the cost of building new homes and eating out, seem a lot more persistent. The RBA now expects headline inflation to peak at around 3.7% by June 2026, especially once government energy rebates start to roll off. Underlying inflation isn’t expected to get back near the midpoint of the target range — around 2.6% — until mid-2027. That means real wages will likely go backwards through 2026, before picking up again the following year. Bullock described the current 3.6% cash rate as “pretty close to neutral” — in other words, not really pushing the economy forward, but not holding it back too much either. “We may be a little bit restrictive. We may not. So there may be a slight decrease, there may not.” And that’s why most economists — from Goldman Sachs to the Commonwealth Bank — now think the RBA’s easing cycle is basically over. The consensus view? No rate cuts until around May 2026. So we’re still a fair way off. The central bank’s latest forecasts back that up. They see core inflation staying above target through mid-2026, while the labour market remains steady — no major spike in unemployment on the horizon. Their models still pencil in one rate cut sometime next year, maybe in the second quarter, but even they admit the data’s getting harder to read. In fact, the RBA said the stronger-than-expected inflation report from the third quarter “suggests there could be a little more underlying inflationary pressure than we previously thought.” Translation: the economy’s still running a bit hotter than they assumed. So, no fireworks from the RBA this time — but the message is clear: Inflation’s still stubborn, and the Bank’s in no rush to start cutting.
And things are getting messy inside the Coalition again — and, surprise surprise, it’s over climate policy. The Nationals have decided they’re officially dumping the net zero by 2050 goal. Yep, that’s the same target they signed up to just a few years ago. Nationals leader David Littleproud called it a “line in the sand,” but honestly, it’s more like a line through the Coalition, because this move risks splitting them apart. Here’s what the new policy does: It basically says Australia shouldn’t try to get ahead of the pack on emissions reductions. Instead, we should only cut emissions in proportion to what other countries have achieved. The Nats are arguing that we’re already doing more than our share — Australia’s emissions are down 24% since 2005, compared with the OECD average of 14%. So they want targets tied to that average, not to ambitious long-term goals. If their policy were applied right now, Labor’s 2035 target — a 62% to 70% cut — would be slashed to around 30% to 40%. And it would scrap things like the safeguard mechanism, vehicle efficiency standards, and renewable energy certificate schemes. Instead, they want to bring back Tony Abbott’s old Direct Action plan — where the government literally pays polluters to reduce emissions. You can imagine how this is going down with the Liberals. Sussan Ley is poised to abandon the Liberal Party’s allegiance to net zero emissions by 2050 and save her leadership from conservatives, including her rival Angus Taylor backed by the Nationals. As Ley agreed to finalise the Liberal Party’s policy position by the end of November when parliament sits for the last time this year, the overwhelming mood now is to walk away from net zero. But moderate MPs are worried it’ll make it impossible to win back urban seats. Others, though, agree the climate targets have gone too far. Barnaby Joyce, for one, says even this isn’t enough to bring him back into the party fold. And over in government, Labor’s Murray Watt didn’t hold back — saying the Liberals have basically handed the keys to their climate policy “to the likes of Matt Canavan and the ghost of Barnaby Joyce.” Now, realistically, the Coalition’s not getting anywhere near power for at least a few years — so in some ways, this is all theoretical. But symbolically? It’s huge. There is still a group of moderate Libs who want to stick to net Zero. Sussan Ley is at risk of joining Alexander Downer and Brendan Nelson as one of the Liberal Party’s short-lived leaders. She’s tough, but it’s hard to fight numbers. And if the Nats and the Libs can’t agree on climate, they’re not really a coalition — they’re a marriage heading for divorce.
Speaking of climate — insurance giant IAG just dropped a pretty sobering report on how fast the weather’s changing, and what it means for all of us. It’s called Severe Weather in a Changing Climate, and it basically says: buckle up, because we’re in for more wild weather — and it’s heading further south. Hailstorms, tropical cyclones, flash flooding — all expected to hit more often, and in places that used to be relatively safe. We’ve already seen the preview: massive hailstorms in Queensland two weekends in a row, costing hundreds of millions. Cyclone Alfred near Brisbane earlier this year caused over $2.6 billion in combined damage. IAG’s head of natural perils — yes, that’s an actual job title — Peter Chan, put it nicely: “The atmosphere is like a sponge — and a warmer world makes it a bigger sponge.” Meaning it holds more water, and when it releases, we get heavier downpours. The report says cyclones are likely to form further south, storms are getting stronger, and slow-moving systems are dumping more rain — all of which means higher insurance claims, and higher premiums. And that’s already happening: premiums are up 14% this year, after jumping 16% in both 2023 and 2024. IAG’s basically saying: this isn’t sustainable. We need to start building smarter — stronger codes, smarter planning, better coordination between governments. And for the highest-risk areas? They’re calling for relocation and property buyback schemes. It’s not just about saving money — it’s about avoiding repeated disaster.
Things aren’t looking great for Optus or its CEO, Stephen Rue. He’s facing fresh calls to resign after a fiery Senate hearing into that massive 14-hour Triple Zero outage back in September — an outage that’s been linked to three deaths. During the hearing, Rue apologised, saying he was “deeply sorry” for what happened, but stopped short of stepping down. He also pointed some of the blame at Nokia, which manages parts of Optus’ network. What really angered senators, though, was the timeline. It turns out Optus executives told their parent company, Singtel, about the deaths hours before they told Australian regulators or the government. That delay — almost seven hours — has sparked outrage. Greens Senator Sarah Hanson-Young, who’s leading the inquiry, accused Optus of putting its “corporate ducks in order” instead of public safety. And consumer groups say this is yet another example of private companies putting shareholders first. The regulator, ACMA, says the responsibility to report outages lies squarely with telcos — meaning, ultimately, this one’s on Optus.
So, here’s an interesting one — the federal government’s rolling out a new energy scheme that could give millions of Aussies up to three hours of free electricity a day. Sounds pretty good, right? Here’s how it works: Right now, we’re generating heaps of solar power in the middle of the day — more than the grid can handle. The problem is, most people aren’t home then, and we don’t have enough batteries to store all that extra energy. So a lot of it just… goes to waste. The government’s plan is to change that. The idea is to offer a “free electricity window” — basically encouraging people to run their air con, washing machines, dishwashers, whatever — during the day when the grid’s overflowing with solar power. But there are a few catches. Not everyone will be able to get it. The scheme’s called Solar Sharer, and it’s set to roll out in July 2026 — but only in New South Wales, South Australia, and south-east Queensland. That’s because it’s tied to something called the Default Market Offer, or the DMO — that’s the maximum price energy companies are allowed to charge customers in those regions. Other states have their own rules set by different regulators, so they’re not part of this one. And even though it’s all about solar energy, you don’t actually need to have solar panels to get the deal. You’ll just need to sign up with an energy provider that offers the Solar Sharer plan — it won’t be automatic. Oh, and one more thing — you’ll need to have a smart meter. Plus, you’ll only really save money if you can shift your electricity use into those free-power hours. So, while it’s a clever idea to make better use of all that spare solar energy, some experts are warning it could push up prices at other times of day.
So, Australia Post is shaking things up again. The postal giant’s teamed up with Bain & Company — yep, the global consulting firm — to take a hard look at its operations. Why? Well, because the way we use the mail is changing fast. Think about it — when was the last time you sent a letter? Exactly. Letter volumes have dropped dramatically, while parcels are booming thanks to all that online shopping we do. Now, despite that big shift, Australia Post actually swung back into the black this year — posting an $18.8 million pre-tax profit after losing almost $90 million the year before. That turnaround came from a mix of things: higher stamp prices, and the decision to deliver letters every second day instead of daily. But the timing here is interesting. This Bain appointment comes as chairwoman Siobhan McKenna — who’s been a key figure and a former News Corp exec — is getting ready to wrap up her three-year term. Australia Post hasn’t shared exactly what Bain’s role will be or how long they’ll be working together. They’ve just said, basically, that sometimes you need outside experts to help steer big transformations — which, fair enough. And this isn’t the first time they’ve brought in consultants. Back in 2018, PwC warned that the letters business was “high risk” and heavily dependent on just a handful of big customers — many of whom were already trying to ditch paper altogether. PwC even suggested cutting letter delivery to once a week, but that idea was knocked back. Then in 2019, Boston Consulting Group got involved — they were paid just over $1.3 million for a few months of work. Their report looked at the long-term sustainability of the service and even floated the idea of privatising the parcels business. That one ruffled a few feathers — it led to tension between the Morrison government and then-CEO Christine Holgate, and even came up in a parliamentary inquiry later on. Fast forward to 2023 — the Albanese government stepped in with some rule changes meant to “modernise” postal services. That included reducing how often letters go out and letting postal workers carry more parcels on their rounds — up to 20% more, in fact. So, between falling letter use, rising parcel demand, and political pressure to keep post offices open, Australia Post’s got a lot to juggle. The big question now is: will Bain help them finally find a balance — or just become the latest in a long line of consultants to take a crack at it?
And finally, housing — because who isn’t talking about it right now? Westpac’s new CEO, Anthony Miller, says Australia needs to build more homes that actually match what average people can afford — around that $500,000 mark. He explained that with an average salary of about $90,000, most Australians can borrow roughly five to six times their income — giving them borrowing power of around $450,000 to $550,000. But when the median house price in cities like Sydney has hit over $1.6 million, that’s just not realistic. Miller says governments need to cut red tape and speed up approvals, because the cost of taxes, materials, and building rules are all adding pressure. He even pointed out that a third of the cost of building a home in Western Sydney can come from government fees and levies. And one possible solution? Building more in regional areas, where the median house price is closer to $550,000. As Miller put it — if we want the “average Australian” to actually own a home, we need to start building homes they can actually buy.
So, to sum up this week: Xi and Trump finally thawed the ice with a quick face-to-face that left Beijing holding most of the cards. The Royals are in damage-control mode again — and even Trump’s weighing in. The RBA’s holding steady at 3.6%, warning inflation’s not done with us yet. The Coalition’s tearing itself apart over net zero, while IAG’s warning the weather’s getting wilder — and pricier. Optus is still under fire after that fatal outage, and Canberra’s new “Solar Sharer” plan could mean free electricity for some — if you use it smartly. Australia Post’s bringing in Bain for another rethink of its future, and Westpac’s new boss is spelling it out: if we want Australians to own homes, we’ve got to start building ones they can actually afford.
And next week, I’ll be talking to Mark Woodland, co-founder and CEO of health start-up Kismet, which creates an ecosystem to make health care easier for families.
And I’ll be talking to Rabobank economist Teeuwe Mevissen about what this Trump-Xi Jinping deal really means.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
If you like Talking Business, please leave us a review with Apple podcasts. Thank you in advance.
In the meantime you can find me on Facebook, Twitter or X as it’s now known, Instagram, LinkedIn and YouTube.
If you want to contact me, email me at leon@leongettler.com. I answer all emails.
Also in my spare time, I have a copywriting business. If anyone needs newsletters, blogs, articles or advertorial, email me.
Looking forward to the next episode of Talking Business next week.
