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 forty-three in our series for 2020 and today’s date is Friday November 27.
And this week, I’ll be talking to Mervin Chiang, head of market development at Procensol Australia. We’ll be talking about what industries are affected by robotics. And I’ll be talking to Callam Pickering from Indeed about the latest wages growth and unemployment figures
But now, let’s talk to Mervin Chiang.

The surging coronavirus is stoking fears of a fresh downturn for the world economy, heaping pressure on central banks and governments to lay aside other concerns and do more to spur demand. Hopes are mounting that Covid-19 vaccines will become available as soon as December but widespread delivery will take months and infections are rising again in many large economies. Authorities are responding with more restrictions to limit the virus’s spread at the price of weaker economic activity. Wall Street economists now say that it wouldn’t take much for the U.S., euro area and Japan to each contract again either this quarter or next, just months after they bounced from the deepest recession in generations. Bloomberg Economics gauges of high-frequency data point to a double-dip downturn. That leaves policy makers hearing calls for more stimulus, even when central banks are already stretched and starting to worry about froth in financial markets. Meantime, politicians from the U.S. to Europe are clashing over just how much they can and should do with fiscal policy.
President-elect Joe Biden has chosen former Federal Reserve Chair Janet Yellen as Treasry secretary, a historic decision that could make her the first woman to lead the department.. Biden has selected a seasoned central banker for the nation’s top economic policy job as the coronavirus pandemic threatens another U.S. downturn. In Yellen, Biden is likely to find support from both Wall Street, which feared a more provocative pick such as Senator Elizabeth Warren, and progressives, who were concerned he might choose someone too friendly to big banks and the wealthy. Yellen, 74, is widely seen as a politically “safe” pick for the role, likely to garner support from Senate Republicans as someone capable of pursuing bipartisan compromise during an otherwise fragile time for the economy. If confirmed by the Senate, Yellen, 74, who as Fed chair and deputy chair steered America through the global financial crisis, will help guide the U.S. economy through a resurgent pandemic that is already causing parts of the nation to resume painful lockdowns. The most immediate challenge would be breaking a logjam on Capitol Hill to deliver economic relief to long and growing unemployment lines. . A graduate of Brown and Yale universities, Yellen was also the first woman to serve as Fed chair after her Senate confirmation in 2014.
. The worldwide airline industry will rack up more than $200 billion of losses this year and next, before finally regaining cash-positive altitude at the end of 2021, the International Air Transport Association has forecast. The industry will make a collective net loss this year of $US118.5 billion ($162 billion) and $US38.7 billion in 2021, IATA said. The 2021 forecast loss is more than twice a previous $US15.8 billion estimate in June.

The Victorian Government will offer stamp duty discounts and spend close to $50 billion on concessions, subsidies and projects in a bid to get hundreds of thousands of people back to work and breathe new life into a state economy battered and bruised by the coronavirus pandemic. Major initiatives include almost $2 billion for school infrastructure and $1.4 billion to redevelop the Southbank arts precinct, including building a new contemporary art gallery The Government has set a goal of creating 200,000 jobs by 2022 and 400,000 by 2025, focusing on those hardest hit by the disruption wrought by COVID-19, including women, young people, older workers and those without formal qualifications. To help it achieve its goal, the Government has committed $250 million to subsidise the wages of at least 10,000 workers. At least $150 million of this will go towards employing women, and $50 million of this will support women over the age of 45, in recognition of the additional challenges they face. The Government will introduce a tax credit to encourage small and medium businesses to rehire staff, restore hours or create new jobs
Treasurer Josh Frydenberg will move to expand the government’s business expense tax break, allowing companies with more than $5 billion in turnover to instantly deduct the cost of new capital investments. Companies that make more than $5 billion in revenue, but less than that amount in Australia, will be eligible. That means employers including Dulux, Boral, Boeing, Brambles, Visy, Lion, Coca-Cola Amatil and GE will be allowed into the scheme, but businesses including BHP, Rio Tinto, Telstra, Wesfarmers, oil companies such as Caltex, energy companies such as AGL, and Insurance Australia Group are excluded. Business groups had told the Coalition a wider version of the $27 billion policy could add more spark to Australia’s post-COVID 19 economic recovery. New legislation for the measure to extend the instant asset write-off, a centrepiece of the October federal budget will introduce an alternative eligibility test. Mr Frydenberg wants to allow firms that are household names and have employed Australian workers for decades into the scheme. The instant 100% write-off for capital expenditure by all but the largest firms is expected to help pull forward some corporate spending and boost cash flow for strong businesses confident enough to invest. Under the change, companies must have less than $5 billion in total statutory and ordinary income in either the 2018-19 or 2019-20 income year, and should have invested more than $100 million in tangible depreciating assets between 2016-17 and 2018-19. Businesses with an aggregated turnover of more than $5 billion because of the income of an overseas parent or associate will now be able to qualify. Non-assessable non-exempt income, such as COVID-19 business support, will be excluded from the new test.
Qantas has resumed 17 flights between Melbourne and Sydney and expects domestic traffic to be back to pre-COVID-19 levels by Christmas. Qantas chief executive Alan Joyce said the airline was seeing “massive demand” already. He said Qantas and Jetstar sold 25,000 seats on the Melbourne to Sydney route in 24 hours. Mr Joyce said he expected to be back to 60% of pre-COVID-19 levels by Christmas and in the new year that would be “closer to 100%”. He said it had been devastating to see 6000 staff leave the company during the pandemic and those numbers could still rise. Mr Joyce said that while masks are not mandatory for passengers, he wears a mask when he flies and they are required for Qantas staff.
Qantas CEO Alan Joyce has told Channel Nine that the airline is likely to ask for proof that travellers have been vaccinated against COVID-19, once a vaccine is rolled out. “We are looking at changing our terms and conditions to say that for international travellers we will require proof of vaccination before you can get on the aircraft,” he said. But Joyce said it was still unclear whether vaccination would be mandated for domestic air travel.

The Transport Workers’ Union has lobbed an 11th-hour bid to stop Qantas outsourcing around 2000 domestic ground handling jobs that include baggage handling, cabin services and catering roles. Qantas wants to cut $100 million per year in staffing costs under an outsourcing drive it announced in mid-August. But under its industrial agreements with the TWU, Qantas is required to consider union proposals to keep the jobs inhouse.
The iconic Grocon building empire remained on the brink over the weekend with talks to determine its future focused on the appointment of administrators. Industry observers said Melbourne-based KordaMentha was most likely to pick up the appointment, but Grocon said it was yet to make a move. Grocon on Friday had indicated that it would put its construction business into administration over the weekend and has not wavered from plans to shift away from legacy building companies founded by Grocon chief Daniel Grollo’s grandfather Luigi 73 years ago. The impending collapse will be one of the highest-profile casualties of the coronavirus crisis, although Grocon had run into trouble on Queensland projects ahead of the pandemic and had shrunk the size of its building business.

A Sydney hedge fund has collapsed after a cyber attack triggered by a fake Zoom invitation saw its trustee and administrator mistakenly approve $8.7 million in fraudulent invoices. The scam, the latest in a series of strikes by offshore criminal gangs against Australian fund managers, has also ensnared ANZ after the bank failed to stop almost $800,000 being withdrawn from an account linked to the cyber criminals. Levitas Capital, which traded the so-called fear index in the US was forced to close due to its largest institutional client, Australian Catholic Super, withdrawing its money after the September cyber attack. NSW police are investigating the matter as digital crime experts report a spike in attacks on hedge funds and private equity firms this year, as informal checks were weakened due to staff working at home as a result of the pandemic. Levitas was one of almost 2000 similar hacks over the past five months, according to federal government figures which show a doubling in this style of attack. The spike in cyber crime has prompted the Australian Federal Police to establish “Operation Dolus” and team up with law-enforcement agencies in Europe, the UK and US to combat what is known as “Business Email Compromise”. The AFP declined to say who it believed was responsible for the surge in attacks, but cyber experts said a trail of digital crumbs led back to Chinese hackers and Middle Eastern crime gangs.

ASX-listed Bega Cheese looks primed to add yoghurt to its portfolio of products after beating out international dairy giant Saputo and Tanarra Capital to the Lion Dairy and Drinks business. The $550 million deal, now in the final stages of negotiations, would be mostly funded by a capital raising of about $400 million, with the balance to be funded by debt. Bega went into a trading halt on Monday pending an announcement about the proposed acquisition and an expected capital raising. Bega, Saputo and Tanarra were all in pursuit of Lion’s dairy and drinks division until Saputo pulled out of the process last Friday. Saputo’s withdrawal opened the door for Bega to enter Lion’s data room over the weekend, giving it access to highly detailed financial information about the business, including significant contracts it has signed. A successful acquisition will see the $1.1 billion company bring a number of major labels -Pura Milk, Dairy Farmers, Yoplait yoghurt, Farmers Union and Daily Juice – into its fold. Bega would also take charge of an extensive national cold chain distribution network with a vast number of fridges in service stations and convenience stores under the deal, and about a dozen manufacturing sites across Australia. A spokesman for the Australian Competition and Consumer Commission said that while no formal review was planned of the Bega bid, it was “carefully considering the concerns now being raised by some industry participants”. While the regulator has not flagged any definitive issues with the deal, the Dairy Farmers Milk Co-operative recently said it held concerns about further consolidation in the dairy industry. If Bega’s bid is successful, Bega would control more than half of the dairy processing plants in New South Wales. Lion is owned by the Japanese brewer and food company Kirin and the business was originally on track to be bought by China Mengniu Dairy for $600 million last November, with the deal getting the tick from the competition regulator . However, that deal was abandoned this year after news emerged that Federal Treasurer Josh Frydenberg had told Mengniu that the deal was contrary to the national interest. The transaction marks the next step in Bega’s expansion strategy, which has seen the small dairy farmer co-op evolve into a diversified food business. The company bought Mondelez Australia (formerly called Kraft Foods Limited) in 2017, giving it access to products such as peanut butter.
Australia’s entire financial sector, including the big four banks, major insurers, fund managers and superannuation funds, are calling for an institutionally embedded collective target of net zero greenhouse gas emissions by 2050. The target, which if achieved would end Australia’s contribution to global warming by the middle of the century, is one of the central goals of the Australian Sustainable Finance Initiative’s completed road map, released on Monday. ASFI was launched in early 2019 with the goal of designing a comprehensive blueprint to reshape the financial system to deal with climate change and other sustainability issues. On Monday it published that road map, describing it as a “plan for aligning Australia’s financial system with a sustainable, resilient and prosperous future for all Australians”. The road map includes 37 recommendations that seek to embed sustainability concerns in corporate, government and regulatory governance structures, build sustainable finance markets and support community resilience through more socially responsible lending practices. Many of the recommendations deal explicitly with climate change, proposing a standardised use of the Taskforce on Climate-Related Financial Disclosures for all ASX-listed businesses and any financial institution with turnover of more than $100 million, regular climate change scenario analysis and stress testing, portfolio holdings disclosure, and common, science-based emissions targets.
Australia’s biggest brick-making company Brickworks says the government stimulus programs have triggered a jump in demand that has delivered strong first-quarter profits locally, but the relentless second wave of COVID-19 infections have cast fresh uncertainty over its US operations. Managing director Lindsay Partridge said profits for the group’s first quarter which began in August in the Australian operations are ”well ahead” of the same time a year ago. The Australian operations are on course for robust trading for the rest of the financial year also, in part because of the wide range of federal and state government stimulus programs. But the situation in the United States, where Brickworks has made three acquisitions in the past two years to build a new avenue of growth, is facing a much tougher time as the US faces a new round of shutdowns and restrictions as COVID-19 infection rates spiral ever higher to beyond 12 million cases.
Demand for homewares and furniture during the pandemic has put a rocket under Harvey Norman’s pre-tax profits, which soared 160% to $341.1 million in the first four months of 2021. The record-breaking profit growth was underpinned by same-store sales growth of 27.5% and total sales growth of 27.5% from company-owned stores overseas and franchised stores in Australia in the four-and-a-half-months to November 21.

Australians are expected to spend less on their family and friends this Christmas, with two-thirds saying they will hold out for sales or special deals before parting with their money, according to new retail figures compiled by Monash University researchers. In a special report by the Australian Consumer and Retail Studies node in the Monash Business School, many Aussies who buy gifts for family and friends expect to purchase less for their immediate family (24%), other relatives (23%) and friends (24%).
This is because shoppers are unsure of whether they will be able to see their family and friends for Christmas this year due to travel and family gathering restrictions caused by the COVID-19 pandemic. Job losses and cuts to household income will also impact shopper spend, with many expected to be more conservative (58%) or holding off buying treasured items until they go on sale or are part of a special deal (66%).

Many small organizations are experiencing the world of e-commerce for the first time this year, having moved online to continue operating the business against the unfolding pandemic. While the move online brings many benefits including a wider reach and increased revenue, it can present security risks that businesses may not be aware of. Web-based attacks remain in the top five cyber threats for businesses year-on-year, second only to malware threats, according to a recent European report. This trend highlights the need for organizations to be proactive, especially SMEs and start-ups. Organizations need to understand the risks and invest in relevant security controls to defend against potential highly sophisticated and targeted cyber-attacks. While many customers have already begun their Christmas browsing, the busiest online shopping days – Black Friday (27 November) and Cyber Monday (30 November) – are fast approaching

And that’s for this week. And next week, I’ll be talking to Andrew Laurie, successful entrepreneur and business coach, who is regularly ranked among the top business coaches in the world. And I’ll be talking to economist Nicholas Gruen about how COVID-19 has affected our clear thinking process as we search for solutions.
In the meantime, you can find me on Twitter at talkingbizz, on Facebook and on 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.