An analysis of what Trump’s victory means for the US and global economies.
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 or at Banking Day.
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 41 in our series for 2024 and today’s date is Friday November 8.
And this week, I’ll be talking to Amsterdam based Stephanie Walker, a product owner at NMS Productions or New Media Services which operates Global Corporate Outsourcing and Custom Business Solutions, manages Communications and Content of Consumers through SMS, IM, Email and Voice Solutions using cloud based LOOP Platforms. Stephanie, who originally comes from Melbourne, will talk about how she uses Neo Coach team, an unparalleled AI-driven coaching platform designed to provide cost-effective, time-saving, and highly personalized support to individuals dealing with workplace stress and anxiety.
And I’ll be talking to economist Saul Eslake about Australia’s latest inflation figures.
But first, let’s talk to Stephanie Walker.
So what’s happening in the news?
For the rest of the world, the shorthand of the US presidential race we’ve just seen was Kamala Harris representing continuity and Donald Trump chaos. In the lead up to this week’s election, Bloomberg News canvassed the mood across the time zones and the prevailing sentiment from the Group of Seven establishment to the aspiring powers of the Global South is one of caution and pragmatism. The world was fixated on the result of Tuesday’s vote — even if Washington doesn’t call all the shots any more, it still calls plenty. America’s vibrant economy remains the world’s biggest and its politicians — especially Trump — have shown they’re ready to weaponize it. So there was widespread fear of getting caught in the crosshairs if the new president Donald Trump decides to ramp up a trade war with China. Many partners have tariff-escalation plans in the drawer, ready to be pulled out. The prospect of rising protectionism has central bankers and economists worried that US moves to close its market could fuel broader trade wars that will slow global growth and raise inflation. Harris supported a Biden administration decision to extend Trump-era tariffs on China and had backed tens of billions in subsidies for clean-energy, infrastructure and high-technology investment in the US. She had embraced some trade deals but as a senator opposed others and had sought to build in protections for workers and the environment. Trump called for sweeping tariffs of up to 20% on imports, as well as levies as high as 60% on trade with China as a means to stimulate investment in the US, though he’s said some of the figures may be negotiating tactics. Trump had argued that the current international trading system is rigged against the interests of the US and promised a rebalancing when he won. Trump’s first term brought 25% tariffs on hundreds of billions in US-China trade. That generated a lot of news headlines, but not much impact on the macro data. For his second term, his promise of 60% tariffs on China and 20% on everyone else would change the game. If Trump delivers on his campaign pledges now that he’s president and the rest of the world retaliates, the Bloomberg Economics model shows the US share of global goods trade would crater to 9% by 2028 from the current 21%. For China, almost 90% of exports to the US would be wiped out. For Mexico and Canada, which count the US as their dominant trade partner, the drop is more than 50%. Still, a deeper realization is also taking hold in key capitals: America’s brief heyday as the world’s lone superpower is history. It doesn’t matter that Trump won. That’s because there’s a growing sense of the US as an aging superpower, one that must pick its battles more carefully in a world where the number of conflicts competing for its attention is on the rise. That’s true for Trump’s ‘America first’. One British diplomat observed that the Roman Empire didn’t suddenly end. Instead, it managed a long decline.
The Reserve Bank of Australia has held interest rates steady. While headline inflation of 2.8% will “remain lower for a time”, according to the bank, underlying inflation – which is not expected to ease to 3% until mid-2025 – “remains too high”. This means that other central banks are cutting rates but the RBA won’t be joining them any time soon. At its second last meeting of the year, the bank kept the official cash rate at 4.35%, marking 12 months since it last lifted it. Financial markets and economists had expected the bank to hold steady, with no movement expected until at least February. “We are not, at the moment, in a position where we can sustainably say inflation is going to be back in the target band, and we want to be more convinced of that,” RBA Governor Michele Bullock said. “We don’t want to say we’re ruling one out or the other out because we honestly, at the moment, just want to make sure that we have got inflation continuing to come down. The forecasts have it coming down. But as I’ve said, the forecast, the further out you go, the more uncertain they get.” RBA governor Michele Bullock has urged federal and state governments not to stoke inflation with big-spending election promises and warned another interest rate rise was still a possibility as the central bank conceded it had underestimated public spending on services such as the National Disability Insurance Scheme. A string of big spending announcements including in the lead-up to the Queensland election last month have pushed government spending to a record share of the economy. At the same time, Australia has recorded the highest underlying inflation rate of any advanced economy, according to RBA analysis released in its quarterly forecast update on Tuesday. “This last part of the job of getting inflation down is not easy or straightforward,” Ms Bullock said.
Mineral Resources managing director Chris Ellison will be kicked out of the company he founded after a damning investigation into his role in a tax evasion scheme and other dubious business dealings. The board-ordered investigation found the mining billionaire had at times failed to act with integrity and that financial benefits had flowed from MinRes to related parties, including his daughter. The board also found Mr Ellison had directed company employees to work on his boat and properties, as well as manage his personal finances. MinRes said Mr Ellison would remain managing director pending an orderly leadership transition in the next 12–18 months. However, it is unclear if he and other board members can survive that long given the extent of the governance issues exposed by the investigation and with the ASX and Australian Investment and Securities Commission already on the case.
Coalition transport spokeswoman Bridget McKenzie failed to declare more than a dozen free Qantas and Virgin flight upgrades since joining parliament in 2011, in a serious breach of disclosure rules. Pressure has been mounting on Senator McKenzie since it was revealed she had written to Qantas, Virgin and Regional Express to check if she had received upgrades that had not been disclosed on her register of interests. Qantas and Virgin had responded to the letter, and had revealed more than a dozen domestic and international business class flight upgrades. Senator McKenzie had not updated her register of interests after receiving the two responses because she was still waiting on a response from Regional Express. The furore over upgrades for politicians and free flights for political parties has dominated the news over the past fortnight and resulted in a series of claims and counterclaims about inappropriate use from all sides of politics. Labor will seek to make the upgrades an integrity issue after pressure on Prime Minister Anthony Albanese over his personal travel spread beyond the government. Opposition Leader Peter Dutton himself has faced questions about requesting the use of mining billionaire Gina Rinehart’s jet to fly from Queensland to Sydney in 2022. After days of questioning, Mr Dutton conceded that his staff asked for the free use of the billionaire’s jet, claiming it was the cheapest option for taxpayers. The chain of events began with claims in former Financial Review columnist Joes Aston’s book The Chairman’s Lounge, that Mr Albanese “liaised” with former Qantas boss Alan Joyce about his personal travel and received “guaranteed” upgrades only Mr Joyce could provide. After going back through records since he was first elected in 1996, Mr Albanese rejected the claim. But when asked about a Qantas flight on his register of interests on Sunday, Education Minister Jason Clare said he had sought a free business class upgrade on a personal trip to Singapore in 2019. Mr Albanese also failed to disclose thousands of dollars in flight upgrades to his former wife, NSW politician Carmel Tebbutt, by Qantas and its partner airline, Emirates. The official rules state upgrades for spouses and children should be notified. The saga has raised questions about how airlines and other regulated companies curry favour in Canberra. They’re not stupid. It’s good business for them.
Prime Minister Anthony Albanese has fired the starting gun for the federal election, outlining a cradle-to-the grave policy agenda leaning heavily on education and health. Revealing what is likely to be the government’s election slogan of “Building Australia’s Future”, Albanese used a campaign-like rally in Adelaide to make a third major education promise in three days, committing to 100,000 ongoing fee-free TAFE places a year. The TAFE commitment follows promises to overhaul the university sector by increasing the income threshold for HELP loan repayments and wiping $16 billion from outstanding student debts. All would start after the next election. Within the government, expectations are either for Albanese to go to the polls in March – which could be called in early February – or in May. In front of party faithful in Adelaide. Albanese said the 100,000 fee-free TAFE places, to start from 2027, would be an ongoing commitment by Labor to underpin the economy over coming decades. Senior Liberal frontbencher Simon Birmingham accused the government of trying to spend its way back into power. “This is simply a cash splash from Anthony Albanese – an attempt at trying to corner or hoodwink an electorate ahead of an election from a government who has ultimately overseen the inflationary environment that has put so much pressure on young Australians and ultimately all Australian households feeling that inflationary pressure,” he told Sky News. Albanese used the address to unveil the government’s planned slogan, “Building Australia’s Future”. It follows the 2022 election at which Labor asked people to “Vote for a Better Future”. In a clear allusion to the coming election, Albanese said the government would next year ask voters for the opportunity to “continue to serve the greatest country in the world – and the chance to make it greater still”. That would be achieved, he said, by “building on the strong foundations we have made, building together, building to last, our Labor government building Australia’s future”. The economy and cost-of-living issues will be a dominant part of the campaign. The government is under pressure on a range of fronts, from the levels of inflation and interest rates to house prices and rents. Albanese said it was the government’s management of the economy that had brought inflation down from more than 6% in early 2022 to under 3% in the most recent consumer price report. He said real wages were rising, more than a million jobs had been created since Labor took office, the government had delivered back-to-back budget surpluses and the gender pay gap had narrowed. “
Australian Federal Police officers have raided the Sydney office of audit and consulting giant PwC Australia as they prepare for days of searches through the firm’s systems as part of a probe into its misuse of confidential government documents. Plain clothes detectives entered the firm’s Barangaroo headquarters early on Monday, with PwC chief executive Kevin Burrowes saying the AFP would be combing through records for several days. The move comes as the AFP prepares to appear before Senate estimates next week, with police known to be examining Pwc’s international links to the tax scandal. In an email to partners on Monday, Mr Burrowes said the AFP arrival was “an expected development in relation to an investigation … commenced in 2023 into the historical tax matter and individuals who have left our firm”. “We have been working with the AFP to facilitate its attendance, and we will continue to co-operate with its investigation,” he said. “Despite the potential for distraction, let’s all encourage our teams to continue business as usual and remain focused on their important work with our clients and in the community.” The escalation of the police probe comes as parliament prepares to hand down a report into the audit and accounting sector in light of the scandal surrounding PwC, with Greens senator Barbara Pocock saying the firm had lost its “social licence”. PwC has been in the public glare for more than a year, after the firm was revealed to have used confidential government tax briefings provided as part of a private consultation round to construct new strategies for clients. The firm’s former head of international tax, Peter Collins, was banned by the Tax Practitioners Board over the scandal, while PwC was slapped with a good behaviour bond. Mr Collins shared confidential government information with partners in the firm, with emails tabled to a Senate inquiry showing staff around the world were included in emails gloating about the briefings. But the exposure of the firm’s failures triggered a second wave of outcry, with Treasury referring PwC and Mr Collins to the AFP for investigation over allegations they disclosed official secrets. At least nine partners have exited PwC in connection to the tax scandal, with four currently subject to the AFP probe. The AFP said its PwC investigations, dubbed Operation Alesia, was examining “an allegation involving the disclosure of confidential information by a former partner of PricewaterhouseCoopers”. Operation Alesia is examining whether former PwC partners breached Section 70 or Section 90 of the Crimes Act, which relate to the disclosure of information and official secrets. At the time, the AFP said it had designated the matter a “priority” and a “sensitive” investigation. The AFP will appear at Senate estimates on Tuesday next week.
And that’s it for this week. And next week, 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.
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.
