Gold prices have punched through $4000 in the wake of the shutdown and US instability.
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 35 in our series for 2025 and today’s date is Friday October 10.
First, I’ll be talking to Suhini Wijayasinghe, Head of HR Solutions at recruitment firm people2people about how different generations are using AI in job applications, managing 4 different generations in today’s workplace and the importance of flexibility in the workplace.
And I’ll be talking to Indeed economist Callam Pickering about the latest jobs figures. They make grim reading.
But first, let’s talking to Suhini Wijayasinghe
So what’s happening in the news?
Lately, I’ve noticed that the impact of tariffs is starting to show up more clearly in the prices of everyday goods in the U.S. — things like soup cans, dresses, tools, and even car parts are all getting more expensive. While overall inflation isn’t skyrocketing, there’s a definite uptick in the cost of many imported items. It seems like companies that had been holding off on price increases are now passing those added costs on to consumers. A lot of this has to do with depleted inventories and the ongoing pressure from tariffs. Government data backs this up — for example, audio equipment prices rose 14% in just six months, and other categories like dresses and tools also saw noticeable hikes. Experts are saying this marks a shift. Inflation for goods had been pretty flat for a couple of years, but now it’s starting to creep upward. Some businesses tried to dodge tariffs by importing early, while others — like Costco — are getting more strategic. They’re cutting back on certain seasonal imports and instead stocking higher-value, domestically sourced items like backyard sheds. Still, more retailers are starting to be upfront about price hikes. A research group that tracks these trends found that since April, prices have gone up on a range of products — from clothing and shoes to bicycles and dishwashers. Furniture giant Ashley Furniture is even planning to raise prices on most of its products, citing industry-wide cost pressures caused by tariffs. And with new tariffs being introduced — like the 25% one on upholstered furniture taking effect in mid-October — it’s likely that more price increases are coming. AutoZone, for instance, hinted that they expect to raise prices further as the full weight of tariffs hits their supply chain.
The price of gold has reached record heights as the US government shutdown becomes the latest element of economic uncertainty pushing investors to seek safety in the precious metal. At the end of last week, bullion was trading at $US3886 ($A5886) per ounce, after a stand-off over funding in the US Senate triggered a shutdown that sent gold’s spot price to its record high of $US3897 on Thursday. A range of factors has been driving the surge in the gold value, said Shane Oliver, chief economist and head of investment strategy at AMP. One thing at play is that central banks have been increasing their gold holdings recently, “fearful that if they have US dollars, it could work against them”, said Oliver. In particular, BRICS countries – Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates – have reduced their reserves of US dollars. Instability in the US is also bolstering the appeal. This includes a downswing in the US dollar. “Gold is priced in US dollars, so if the dollar goes down, gold goes up,” Oliver said. “Gold is also seen as a hedge against geopolitical tensions, particularly between the US and China, or NATO countries and Russia.” Signs from the Trump administration of “increasing authoritarianism” are also fuelling appetite for gold, Oliver said, as are lingering concerns that inflation, instead of being defeated, is “lying dormant and could bounce back”. He also cited comments from Trump about having greater control of the US Federal Reserve. “That’s a red flag, that’s worrying investors as well,” Oliver said. The recent US government shutdown is another layer of uncertainty. “The shutdown is part of it, in that it feeds into that insecurity,” Oliver said. “Gold is seen as a hard currency in the short term.”
The Reserve Bank of Australia’s latest half-yearly Financial Stability Review warns financial risks to the economy and business are increasing, not receding. “The possibility of a material shock to the international financial system is rising,” it warned. The RBA is comfortable with the health of Australia’s financial system, but warns that three key global vulnerabilities loom large. The first of those is the potential for disruptive major falls in global asset prices, given that share and other asset prices have kept increasing, with investors pricing in perfection and an extremely low risk of anything going wrong. While occurring after the report was finalised, the US government shutdown is seen as another manifestation of these economic and financial risks coming from offshore. So far during this latest shutdown, US share prices have generally increased as traders expect that the shutdown will slow the US economy and lead to further Fed rate cuts. Another key risk cited by the Reserve Bank is the potential for widespread cyber disruptions that could spiral into a broader crisis, especially if they coincide with a period of market stress. The bank is particularly worried about the increasing reliance of large financial institutions — such as banks, superannuation funds, insurers and investment funds — on common tech service providers. “Reliance on a concentrated network of essential service providers, often located offshore and outside the financial regulatory perimeter, increases the risk that technology outages disrupting core activities of a financial institution, or third party, could have system wide effects (e.g. 2024 Crowdstrike incident),” the bank warned. The third major worry for the Reserve Bank remains China’s ailing property sector, and its general economic weakness. “Persistent weakness in the property sector, amid a structural rebalancing in the Chinese economy, remains a vulnerability for real estate companies, local government finances and the wider Chinese financial system,” the RBA cautioned. China’s property price downturn is so far worse than Japan’s infamous crash of the early 1990s, which resulted in the “lost decade” of economic growth or, as it turned out, a lost few decades. However, Australian exporters are far more reliant on Chinese customers than they ever were on Japan during the boom of the 1980s.
Of the nearly 250,000 Australian homes that face a severe-to-extreme flood risk, almost eight in 10 are not insured against floods and seven in 10 are in places where income is below the national average. The alarming statistics – revealed in the Insurance Council’s annual Insurance Catastrophe Resilience Report, to be released on Tuesday – highlight the growing problem of uninsured and underinsured households. The report shows that Australia is second only to the United States for the cost of extreme weather over the past 45 years, and every decade since 1980 has been costlier than the last. This could result in more losses, from more frequent natural disasters, shifting onto public balance sheets. The council has been calling for more government investment to make risky communities more resilient against climate change and to ensure insurance premiums are affordable. The costs to insurance companies of three major weather events over the first six months of 2025 was $2 billion, according to the report: January’s North Queensland floods at $289 million, Tropical Cyclone Alfred in March at $1.43 million, and the NSW Mid North Coast and Hunter floods in May at $248 million. Overall costs would be much higher, as people who are underinsured (opting out of flood cover to make premiums more affordable) or not insured at all are forced to cover their own rebuilding costs, or lean on government grants. Insurance premiums have surged as the costs of extreme weather on insured property swelled to around $22.5 billion over the past five years. This is up 67% on the previous five-year period. Australia is ranked as the second-highest country for economic and insured losses for each person from extreme weather between 1980 and 2020, according to an analysis of comparable developed nations by global reinsurer Munich Re. National average annual home and contents insurance premiums have jumped by 14% in the past 12 months, according to Canstar last month. That comes on top of 16% jumps in 2023 and 2024. In flood zones, many premiums exceed $7000 and, in some cases, $30,000, the Insurance Council says. This results in many residents being underinsured or having no insurance at all.
Australian communications minister Anika Wells is fed up with the Triple Zero outages and the excuses that telcos are coming up with. The bosses of Australia’s three biggest telco companies – Telstra, Optus and TPG Telecom – were summoned to a meeting in Canberra with Communications Minister Anika Wells this week to demand they ensure the integrity of the emergency services network during the summer disaster season. Wells says Australians have a right to feel “white-hot angry with Optus about their “catastrophic failure”. She’s putting telcos on notice! Wells has fast-tracked the legislation to set up a new Triple Zero watchdog in a bid to prevent further outages on Optus’ mobile network, like the one on September 18, which was linked to three deaths when customers were unable to call emergency services. The so-called Triple Zero custodian will be a permanent body to oversee Australia’s emergency services phone calls. Within six months of the laws being enacted, the custodian – via the Australian Communications and Media Authority – will issue “additional performance requirements” for telco groups, the government said. It has not specified what these requirements will be but could take various forms, including benchmarks. The government would also not reveal what penalties, if any, telcos would face if they did not reach the new performance targets. This new law will empower the Triple Zero custodian, a function conducted by a team within the communications department – to request information from telcos in the Australian Communications and Media Authority’s infrastructure, and to demand improvements to the system. The custodian’s oversight role is intended to help force telecommunications companies to comply with their obligations to inform the authorities about outages to the Triple Zero number and conduct forensic examinations to ensure the system functions better. The minister, who last week described herself as “a new minister to the [telecommunications] industry”, has been criticised by opposition politicians for failing to act faster on the legislation needed to underpin the role of the Triple Zero watchdog. Having an independent manager of Triple Zero was first recommended in a March 2024 review after an earlier Optus outage in November 2023. The government said this was a priority and asked the Telecommunications Industry Ombudsman to draft a blueprint on how to do this through a steering committee that brought together government departments, industry, and emergency service representatives. The Ombudsman delivered its report on the role, functions and structure of the custodian concept in November last year, but the government was unable to legislate the role before the election.
The Coalition will take spending cuts to the next election to help deliver lower taxes and smaller deficits than Labor, in a high-risk strategy designed to restore a sense of economic purpose to the Liberal Party after back-to-back election defeats. In an address to the party room, shadow treasurer Ted O’Brien pledged to address key issues in the economy. “Enough is enough,” said O’Brien of government spending which grew at 5.5% last financial year and was the highest level of government spending as a share of the economy since 1986-87, excluding the pandemic. “The Coalition will offer a different approach, hinging on two actions: stop the spending spree, and start growing the pie,” he said. “It’s early days, but we are already working on a plan that offers lower spending, lower taxes and lower debt than Labor, with faster growth to support higher living standards.” O’Brien’s plan, which he said would be led by the private sector, follows on from a keynote economic speech by Opposition Leader Sussan Ley last month in which she called for an end to growing dependency on government assistance and subsidies. She said the post-pandemic mindset was fuelling intergenerational inequity by driving up debt and threatening to render the welfare system unsustainable. However, such an approach will involve means-testing and paring back other forms of assistance, which is politically dangerous in an environment where pollsters say voters no longer care about debt and deficit as they once did. Also, it potentially sets up a collision with the government which has other big spending plans, such as Anthony Albanese’s vision for universal childcare, a proposal that he intends to take to the next election
How things have changed! This time last year, Australian chief executives were heralding the end of the flexible workplace: 82% of them expected white-collar workers to be back in the office five days a week in three years. But the latest KPMG global chief executive survey, released this week, shows just 22% of Australian respondents expect white-collar workers to return full-time in what represents a massive backflip on workplace flexibility. “The numbers confirm what we have long suspected: a return to a fully back-in-the-office workforce in Australia is unlikely,” KPMG Australia boss Andrew Yates said. According to Yates, it may reflect, another year on from the pandemic, a better grasp of priorities by both sides. “Employers understand that the degree of flexibility is what people expect. And I think employees, on the other hand, have also realised the benefits of coming into the office. Interestingly, almost 50% of the Australian CEOs think that three days in the office is where this will land. And I think that’s pretty consistent with my view.”
Commonwealth Bank has shifted its core banking system into data centres managed by Amazon Web Services, in a move the financial services giant’s technology boss says will set it up for a future where lenders are powered by artificial intelligence. The 18-month project, undertaken with little fanfare in comparison with the ANZ Plus and Westpac Unite projects at rival banks, aims to make CBA’s technology faster and safer, and enable new products to be developed more quickly. The landmark migration of the systems that run CBA’s retail, business and institutional banks into the cloud – including all the ledgers recording deposit and loan balances, and the processing of all transactions – is a first for an Australian bank and one of the biggest moves to the cloud by any bank globally. It means at least two-in-five transactions across the Australian economy happen in data centres managed by AWS, the cloud computing subsidiary of Amazon, founded by Jeff Bezos. The transfer from CBA-owned mainframe servers was made nine days ago. The bank worked closely with the Australian Prudential Regulation Authority to make the AWS shift. APRA requires banks to manage risks arising from the use of “material service providers”, including those supplying data centre services. There is a requirement for CBA to keep its banking data in data centres located in Australia. AWS operates multiple data centres in Australia, providing resiliency as they are connected to different power grids and networks, reducing the potential for disruption because there is no central point of failure. CBA previously ran on a single data centre based in Sydney. CBA is planning to move one of its final legacy systems – the one that manages credit cards – into AWS in the next 12 months.
A senior ANZ trader who used a corporate credit card at a brothel on multiple visits was only subjected to a formal warning, evading more serious censure, as the riotous culture of its trading floor was aired in a high-profile wrongful dismissal dispute. The Federal Court in Sydney was told the senior trader, who cannot be named for legal reasons, used an ANZ corporate credit card on three occasions at a brothel in Sydney in 2007. The employee had made several “late-night visits to what’s described as a massage parlour” while entertaining a client, the court was told. But the bank’s then head of people decided not to question him about the identity of the client, because human resources was unsure what to do if he refused to answer. The only punishment he received was a formal written warning and it’s understood he subsequently left the bank.
And that’s it for this week.
And next week, I’ll be talking to Paul Goudie, CEO of Altura Learning. We’ll discuss how Altura Learning has created high quality, media rich learning solutions for those working in or aspiring to work in the residential or home care sector.
And I’ll be talking to EY economist Cherelle Murphy about Australia’s inflation figures and when we can expect the RBA to cut interest rates.
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.
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Looking forward to the next episode of Talking Business next week.
