Monday’s Facebook, WhatsApp & Instagram outage could have wiped nearly $US7 billionfrom Zuckerberg’s personal wealth.
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast app, 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.
This is episode number 36 in our series for 2021 and today’s date is Friday October 8.
First, I’ll be talking to Justin Hanka, a director at Shape Capital, the company behind Mindbio Therapeutics an exciting Melbourne business doing pioneering work on psychedelic LSD microdosing research. And I’ll be talking to CommSec Chief economist Craig James about market trends in the week ahead.
But now, let’s talk to Justin Hanka.
Mark Zuckerberg’s personal wealth has fallen by nearly $US7 billion ($9.6 billion) in a few hours, knocking him down a notch on the list of the world’s richest people, after a whistleblower came forward and outages took Facebook’s flagship products of Facebook, Instagram and WhatsApp offline. A selloff sent the social-media giant’s stock plummeting about 5% on Monday US time, adding to a drop of about 15% since mid-September. Facebook blamed a “faulty configuration change” for a nearly six-hour outage on Monday (Tuesday AEDT) that prevented the company’s 3.5 billion users from accessing its social media and messaging services such as WhatsApp, Instagram and Messenger. The company in a late Monday blog post did not specify who executed the configuration change and whether it was planned.
Donald Trump is suing to get his Twitter account restored, claiming the tech giant caved in to pressure from his rivals. The former US president asked a federal judge in Florida to request Twitter restore his account – which was removed nearly 10 months ago. Mr Trump has now filed a request for a preliminary injunction against Twitter in the US District Court for the Southern District of Florida. He claims that the tech giant was “coerced” by members of Congress to suspend his Twitter account. And his lawyers say that Twitter is censoring the former president and violating his First Amendment rights. Twitter “exercises a degree of power and control over political discourse in this country that is immeasurable, historically unprecedented, and profoundly dangerous to open democratic debate,” Mr Trump’s lawyers said in the filing. Mr Trump – who boasted 88 million followers during his time in charge – was indefinitely suspended from Twitter in January, following the shocking US Capitol riot that left five dead. The social media platform said Mr Trump violated the platform’s policy barring “glorification of violence”.
Abuse toward retail staff has skyrocketed in Sydney during the COVID-19 pandemic, new government data has revealed. Verbal abuse, threats and violence has intensified by almost 80% in some suburbs of Sydney during the last financial year, according to data collected by the McKell Institute from Bureau of Crime Statistics and Research. The research suggests that the abuse has been the worst in areas in south-western Sydney such as Campbelltown, which were under the strictest lockdown laws in the country, adding immense pressure to communities. Stalking, harassment and intimidation at retail and wholesale outlets rose by 24% in Fairfield, 44% in the CBD and up to 78% in Campbelltown, according to the data.
Treasurer Josh Frydenberg was warned by the ATO last July that 1000 JobKeeper applicants with more than $250 million in turnover had booked revenue “significantly divergent” from forecasts of a downturn, while many were “amending” prior period sales figures to potentially gain eligibility to the program. Just three months into the $90 billion wage subsidy program, the Australian Taxation Office also told Treasury it had found dozens of multinational organisations, known as significant global entities with more than $1 billion in yearly global revenue, that had won payments by using a 30% decline in turnover test, rather than the required 50% threshold. A ministerial submission on July 30 from ATO deputy commissioner James O’Halloran is the first indication the agency was actively scrutinising possible “turnover manipulation” involving large corporations.
The Reserve Bank of Australia left interest rates unchanged at 0.1% and retained its weekly $4 billion bond buying program that will remain until at least February, according to its latest monetary policy statement.
QR code technology will form the backbone of Victoria’s mandatory vaccination scheme for venues opening to increased numbers of patrons once the state reaches its 70% full-dose target about October 26. Premier Daniel Andrews said further details of the scheme – which will require patrons to prove their vaccination status to enter a range of hospitality venues and businesses – would be announced in coming weeks after results from regional trials are known. Trials will be rolled out from October 11 in the Bass Coast, Greater Bendigo, Pyrenees, Warrnambool, Buloke and East Gippsland municipalities, across hospitality, hairdressing, beauty services and tourism businesses, plus events including race meetings, community celebrations and concerts. The results of those trials will help guide the emerging “vaccinated economy” across the rest of Victoria.
Thousands of people in electorates across Melbourne and western Sydney will be driven back into poverty with the end of special COVID-related disaster payments, and new analysis warns it could stifle the nation’s recovery out of lockdown. Data compiled by the University of NSW shows seats such as Blaxland, Watson and Werriwa in Sydney, and Calwell, Lalor and Holt in Melbourne, have experienced huge increases in people whose financial support will drop dramatically as the disaster payments finish. The weekly payments provide $450 for those who have lost fewer than 20 hours of work a week and $750 for those who have lost more. Those on income support who work up to eight hours receive an extra $200 a week. Once a state or territory reaches 70% full vaccination, people will have to reapply each week that a Commonwealth hotspot declaration remains in place to confirm they can continue to receive the payment. At 80% full vaccination, the payment will be reduced over two weeks. In the first week, a flat $450 will be paid to anyone who has lost more than eight hours of work while those on income support who have been working will get $100. Payments to NSW residents could start falling from October 11 and in Victoria in the second half of the month, with the government arguing that as the economy is reopened, employment will recover. Combined with assistance to businesses, which is also being phased out in line with vaccination targets, the federal government estimates it will spend $20 billion responding to the Delta outbreak. The University of NSW research, conducted with the Australian Council of Social Service, shows the change in the number of people on JobSeeker and other welfare since September 2019. Between then and October last year, the number of people receiving support climbed by more than 900,000 to 2.2 million. In addition to JobSeeker, most of these people were receiving the $550-a-fortnight supplement. A year on, there are still almost 1.7 million people on assistance. An estimated 160,000 of these people will lose the $200 a week. The report found the end to the extra payment would have a major impact on some of the poorest parts of the country.
. Higher sales from at-home food consumption are likely to counter the impact of shorter trading hours and store closures as Woolworths, Coles and Metcash’s independent supermarkets battle to keep stores adequately staffed amid Melbourne’s burgeoning delta outbreak. Coles, which has about 1000 staff in Victoria isolating, reduced trading hours at 18 stores in Victoria over the weekend. Woolworths, which also has about 1000 staff in isolation, closed two stores, at Watergardens South and Altona North, and operated reduced trading hours at 21 stores. Analysts said the impact on sales of store closures and reduced trading hours was likely to be offset by heightened demand for fresh food and grocery staples as Melbourne residents remained in lockdown until around October 26. JP Morgan analysts Bryan Raymond and Chris McKegg expect same-store sales growth in supermarkets to rebound in the September and December quarters because of increased at-home consumption during lockdown.
The tax office says it will analyse a trove of secret documents released by the International Consortium of Investigative Journalists that allegedly show the secret tax affairs of the super wealthy and famous to see if it can identify any possible Australian links. The consortium of journalists made up of 600 reporters from 117 countries including Australia, on Monday released a trove of private financial documents that it said exposed the offshore business structures being used by scores of billionaires as well as royal families and the elite to hide their affairs from tax authorities. The data leak is the most recent of many projects by the ICIJ based on documents sourced from firms that specialise in setting up complex offshore business structures for wealthy clients. Local news outlets the Australian Financial Reviews, the ABC and Guardian Australia are all members of the consortium. The leak, dubbed the “Pandora Papers” by the consortium, came from 14 separate entities around the world, including Asiaciti, a company established by Sydney accountant Graeme Briggs, according to the ICIJ journalists. There is no suggestion that Mr Briggs was involved in any wrongdoing. The ICIJ said the files revealed secret offshore holdings of more than 130 billionaires including 46 Russian oligarchs. The files also revealed the 14 firms served bankers, large political donors, arms dealers, international criminals and pop stars, including Elton John and Ringo Starr. The documents also details of the affairs of the rich and famous including details of how a Russian woman who reportedly had a child with Russian President Vladimir Putin purchased a luxury home in Monaco. In a statement on Monday morning following the release of the documents, the ATO said it would be “analysing the information to identify any possible Australian links”.
Deloitte Australia will require all employees be vaccinated to enter company offices by the start of next year, becoming the first of the big four professional services firms to implement a partial vaccine mandate. On Monday Deloitte Australia CEO Adam Powick told the firm’s partners, employees, contractors and suppliers that proof of vaccination will be required to enter company premises and attend company events. Under the new policy, all partners, employees and contractors will be required to declare their vaccination status to the firm. However, it is understood the policy is not necessarily permanent and may no longer be needed as the health and safety impacts of Covid-19 in a highly vaccinated nation become clearer.
Lockdown restrictions are driving spending on home appliances, which is translating to brands in the category splashing more on advertising, a report from media agency Zenith says. In Australia, Zenith predicts that advertising spending by home appliance brands will rise from $US260 million ($358 million) in 2020 to $US318 million this year, an amount that is also more than the $US303 million spent by the category in 2019. And it will not stop there; by 2023, spending on advertising by home appliance brands is predicted to reach $US337 million. The investment in advertising spending is a result of consumers investing in their homes, using money normally spent on socialising or on holidays on large and small appliances such as cookers, washing machines, dishwashers and air conditioning units. Zenith expects consumers to continue to devote more of their time and budgets to the home than before the COVID-19 pandemic, even as restrictions ease, forecasting 6% annual growth in home appliance ad spend in 2022 and 2023. Zenith Australia’s client Bosch, owned by BSH Home Appliances Australia, said it spent more this year for brand awareness campaigns across TV, outdoor billboards and digital advertising compared with previous years.
Nick Scali will almost double its store footprint after acquiring sofa retailer Plush from Freedom Furniture owner Greenlit Brands for $103 million. Plush has 46 stores and an online store and sells sofas and accessories, cushions and rugs. The acquisition will lift Nick Scali’s store portfolio in Australia and New Zealand to 108. Like Nick Scali, Plush has been a big beneficiary of the boom in spending on furniture and homewares during the pandemic. Plush’s sales rose to $160 million in 2021, from $111 million in 2020, and underlying earnings before interest, tax, depreciation and amortisation reached $27 million, up from $10 million. Nick Scali expects the deal to boost earnings per share in the first full year of ownership before synergy benefits are realised.
Australia’s largest pizza chain is using machine learning and data modelling in Microsoft’s Azure cloud service to create a digital twin of one of its stores. Microsoft has signed the three-year strategic technology and services agreement with Domino’s Pizza Enterprises which will use Azure to help accelerate the company’s modernisation and expansion plans.Microsoft says that despite the constraints of the global pandemic Domino’s continues to grow rapidly and in the last financial year it served 281 million pizzas, opened 285 new stores around the world, and recorded US$3.7 billion worth of network sales, and this financial year it expects to open a further 500 stores.Its latest wave of digital modernisation sees Domino’s transitioning workloads and data collections from on-premise servers, and optimising its ordering and fulfilment systems – which will in turn enhance the customer experience and build loyalty. Australia’s largest pizza chain will use machine learning and data modelling in Microsoft’s Azure cloud service to create an experimental “digital twin” of one of its company-owned stores in Queensland, in the hope of designing a kitchen that allows a pizza or side order to be made with fewer steps, shaving precious seconds off the time it takes to get the fast food out the door. If the digital twin experiment works, the methodology will be replicated in stores around the country, and in other countries where the Australian company holds master franchise rights whenever a store is being refurbished or built. The Australian company, Domino’s Pizza Enterprises, is the world’s largest international franchisee of the American brand, and now has more than 2800 stores in 10 markets, including Japan, France and Taiwan.
Coronavirus cases at the Port of Melbourne have combined with rolling strikes and huge congestion at the docks to threaten imports and exports in the lead-up to Christmas. Patrick Terminals has been forced to isolate up to 20% of its Melbourne workforce over the weekend due to one COVID-19 case, just as the Maritime Union of Australia kicked off a month of 12-hour stoppages at the stevedore on Monday, three days a week, every week. In a sign the dock strikes could have significant ramifications for Christmas orders, other major stevedores, who are also dealing with their own COVID-19 cases, have said they have limited or no capacity to take on vessels affected by the Patrick stoppages.
Big Australian greenhouse gas polluters have pledged to hit net zero emissions by 2050, with the nation’s cement and concrete industry and a major aluminium producer taking action to meet green goals ahead of the looming Glasgow climate summit. Australia’s largest building materials players including Boral, AdBri, Cement Australia and Hanson plan to deliver net zero carbon cement and concrete to Australian society by 2050 while the owner of Victoria’s huge Portland aluminium smelter has also committed to meet the same green goal. A more ambitious move has also been laid out by billionaire Andrew Forrest’s Fortescue Metals Group which doubled down on its bet it can make hydrogen a key export commodity, staking ambitious plans to decarbonise its iron ore operations on the technology. It wants to cut its Scope 3 emissions – those attributable to customers for its products – to net zero by 2040. The targets underscore a sweeping move by Australian businesses to curb greenhouse gas emissions with the cement and metals industries both under pressure to lighten their environmental load given they are major carbon emitters.
And that’s it for this week. And next week, I’ll be talking to Tom Cornell, the Head of Assessments (APAC) at HireVue about how Aussies can prepare for The Great Resignation where employees are moving away from jobs where they feel unappreciated and are instead moving toward new priorities and goals, from more money to greater control over their time in the COVID-era. And I’ll be talking to economist Sinclair Davidson whether Australia can bounce back.
In the meantime you can catch me on Facebook, Twitter and LinkedIn. And if you want leave a comment.
Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week