News Corp’s new push for net-zero by 2050 isn’t a departure from their war against climate change. It’s just a 2 week campaign excluding The Australian.
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 32 in our series for 2021 and today’s date is Friday September 10.
First, I’ll be talking to Karen Vivarelli, successful local business woman and virtual assistant, who is coaching others on how to thrive working for yourself at home, and who has been named a finalist for the 2021 AusMumpreneur Awards. And I’ll be talking to economist Saul Eslake about how Australia will fare in this recession.
But now, let’s talk to Karen Vivarelli.
News Corp’s Australian outlets are set to launch a campaign urging “the world’s leading economies” to embrace a target of net zero emissions by 2050; to be fronted by columnist Joe Hildebrand. Far from being a shift from the company’s traditional opposition to climate action, this campaign is further proof that Rupert Murdoch’s empire is not really committed to the change. The details of the campaign show it is even smaller than it first appears. It’s just a two-week campaign in October by News Corp papers and Sky News next month to nudge Australia towards a carbon-neutral economy ahead of the UN’s climate change conference in November, despite NewsCorp having attacked multiple Federal government efforts to act on climate change since 2007, The Australian will be excluded from the campaign, and “dissenting voices” — a euphemism for the staunchest climate change denialists who inhabit many of its top perches — will be expected to “reframe” their arguments. The story, which appeared in the Sydney Morning Herald on Monday was timed to come out on the morning of News Corp’s appearance in front of a Senate committee.
Consumer confidence dropped 1.8% last week as COVID-19 caseloads remained elevated in NSW and Victoria, according to the ANZ-Roy Morgan survey.
The Reserve Bank of Australia maintained official interest rates at their record low level of 0.1% and said it will push on with its plan to gradually reduce the size of its quantitative easing program, pinning its hopes on a strong economic recovery once COVID-19 lockdowns come to an end.
And Reserve Bank Governor Philip Lowe is betting the economy will “bounce back” once 80% of Australians are fully vaccinated so long as governments stick to their pledge to reopen the economy. Dr Lowe believes the current sharp economic downturn will be “temporary” from the NSW and Victorian lockdowns, which will only “delay”, “not derail” the recovery. He says the economy will be growing again in the December quarter and is expected to be back around its pre-delta path in the second half of next year, One factor that gives the RBA boss confidence is that most businesses are hanging on to staff during the current lockdowns. It was only two months ago that firms were complaining about skills shortages and being unable to hire enough workers. Even though the $88 billion JobKeeper wage subsidy no longer exists, Lowe will be comforted by a pre-delta tight labour market encouraging firms to maintain links with staff during current lockdowns. The RBA is also relying on past lockdown experiences in Australia and overseas where most people have gotten out and spent strongly when their home detentions end.
Telstra is proposing a mandate requiring about a third of its workforce to be fully vaccinated, and has kicked-off a one week consultation period with staff, unions and partners ahead of what will be one of corporate Australia’s largest mandatory vaccination drives. Telstra is now the fourth company to mandate Covid-19 vaccinations, joining SPC – the first business to force employees to get the jab – Qantas and Australia’s second-biggest private hospital operator, Healthscope.Telstra will consult staff about a new policy that will require workers who have regular in-person customer interactions to be fully vaccinated against COVID-19 by mid-November. The policy would affect about 8,300 workers. Chief executive Andy Penn said it was “critical” that staff get inoculated against the virus because so many Telstra technicians work with vulnerable communities or enter the home of customers. The mandate will also extend to workers in Telstra’s retail stores, but not staff that can work from home. But the telco is facing potential legal challenges after Penn said in a letter to employees that those who refuse the vaccine may be forced into ‘‘medical retirement’’.
Major supermarket chains have launched a hiring blitz to bolster staff levels at distribution centres and stores decimated by the fast-growing delta outbreak in NSW and Victoria. Woolworths, Coles and Aldi have received another reprieve from public health orders requiring staff from 12 COVID-19 hot-spots in Sydney to be vaccinated before they can work outside their local government area, but staff shortages have led to mounting out-of-stock signs at supermarkets across NSW. Last week, more than 6500 distribution centre and store staff employed by Woolworths, Coles and Aldi were forced to isolate, exacerbating transport disruptions and contributing to growing gaps on supermarket shelves. Woolworths’ chief executive Brad Banducci said last week that more than 3300 staff were in isolation, including 500 in distribution centres, while Coles’ chief operations officer, Matthew Swindells, estimated that 1800 staff in NSW and 1200 in Victoria were isolating. Many of those staff have completed their isolation or have tested negative and returned to work, but retailers are busily recruiting new staff to bolster the ranks and provide flexibility for when more employers are inevitably forced to isolate.
Financial intelligence regulator AUSTRAC has assessed the four major banks as the highest risk for vulnerability and criminal exploitation of any banking institutions in Australia in a series of risk assessments published on Monday. The feared financial regulator says the criminal environment facing the banks is complex and extensive, exposing them to criminal behaviours ranging from tax evasion and drug trafficking to predicate offences (offences that are part of other offences) such as bribery and modern slavery. AUSTRAC released four reports assessing the money laundering and terrorism financing risks facing the majors, smaller domestic banks, foreign subsidiary banks and foreign bank branches. The regulator said criminals were looking to exploit everything from foreign students and night deposit boxes to mobile apps and real estate transactions, and it was on high alert for their next moves. AUSTRAC said the level of risk in each sub-sector was largely proportional to its size, with the big four responsible for 47 million customers, 73% of all assets and about three-quarters of all suspicious matter reports.
Support among Australia’s superannuation funds for environmental, social and governance proposals has increased over the past four years, as the number of shareholder resolutions put forward at annual general meetings continues to rise. Australia’s top 50 super funds voted in favour of various ESG shareholder proposals in 42% of instances last financial year, according to new research from the Australasian Centre for Corporate Responsibility. Although that was down from 43% a year earlier, it was significantly up on the 34% figure reached in 2017. There has been a rapid increase in the number of issues being put to shareholders, which hit 32 resolutions last year, roughly triple the number of proposals in 2017. While the overall rate of support for ESG resolutions held largely steady over the past 12 months, there was an underlying rise in the number of resolutions being supported by union-and-employee-backed industry funds over that period. Just a handful of funds was responsible for this push: VicSuper, Cbus, Macquarie, UniSuper, Qantas Super, CareSuper, Energy Super and AustralianSuper. However, public sector funds remained most likely to vote in favour of ESG proposals, while corporate funds were the least supportive. The funds most supportive of ESG proposals over the past four years were Local Government Super (supporting 76% of proposals), HESTA (65%), Cbus (63%), Macquarie (62%), NGS Super (58%), Mercer (54%) and Qantas Super (50%). The country’s biggest fund, AustralianSuper, voted in favour of ESG proposals 51% of the time.
Climate change has been branded the biggest challenge of our times and for chief executives, articulating exactly what they are doing about it is just as challenging, according to a new survey. ESG (environmental, social and governance) issues are dominating most of the headspace of corporate leaders, according to KPMG’s latest global survey of CEOs. According to KPMG’s survey, 42% of the world’s CEOs, and 36% of Australia’s bosses, “admitted they were struggling to articulate a compelling ESG story to their stakeholders”. As investors nip at the heels, 70% of Australian CEOs say they are facing greater demand for ESG reporting and transparency. The KPMG survey – of 1300 CEOs across 12 countries – found 84% of Australian chief executives and 75% of their global counterpart say the UN Climate Change Conference in November must “inject necessary urgency into the climate debate”, underscoring that demand to demonstrate green credentials. Furthermore, 77% of bosses want another stimulus package from the government to “turbo charge business climate change investments”.
Corporate net zero emissions commitments are on pace to hit a record level in Australia this year, after a wave of announcements through earnings season reinforced the momentum from companies keeping pace with rivals, and placating investors placing a premium on sustainability. The 34 companies in the S&P/ASX 300 that pledged to net zero emissions since the start of the year to the end of August compares to 38 overall last year, according to Macquarie Group data, putting 2021 on track to be a banner year for corporate decarbonisation. Nearly a third of Australia’s 300 largest listed companies have now committed to net zero emissions, with the large caps leading the charge. Now, 54% of the S&P/ASX 100 have declared their intent, or 38% of the S&P/ASX 200 – a number that stood at less than 10% in March last year. The fresh urgency across corporate Australia follows renewed momentum among politicians and investors as research points to a quickening pace in global warming.
The loss of the fast-approaching September school holidays will wipe a further $6.9 billion off the tourism industry’s slate, taking its losses from school holidays alone to $21.3 billion since December 2020. With most of the nation either in lockdown and/or immobilised by border restrictions – and Sydney and Melbourne set to be in lockdown through the September break, which starts from September 18 for public schools in most states – tour operators are gearing up for yet another holiday flop. Many operators are facing the “triple tourism hit”: consecutive school holidays crushed since December last year, the corporate market missing in action from the cities for adrenalin and team-building tours, and foreign cruise lines out of play for almost 18 months. Financial modelling commissioned by the Tourism and Transport Forum (TTF) from Stafford Strategy shows the September holidays normally generate $7.7 billion over the 14-day period. This year it is estimated to yield only $770 million, 10% of the 2019 value. The modelling predicts visitation to be down by 90% nationwide, with NSW hurting most, losing $2.3 billion, followed by Victoria down $1.9 billion and Queensland down $1.6 billion. The figures assume regional Victoria remains open to those Australians permitted to travel, as does Queensland, Western Australia, South Australia, the Northern Territory, Tasmania and the ACT. Tourism supported 1.125 million direct and indirect jobs in 2019. That figure is now down to 665,000 tourism jobs, and expected to drop to 515,000 jobs by the end of this month – representing a loss of 610,000 tourism jobs since the pandemic began. Before the pandemic, an average wedding party booking was for 80 to 120 people; now it is from 50 to 70 guests.
Consumers have been warned to brace for the highest food and grocery price increases in more than 10 years as suppliers seek to recoup higher costs for commodities, packaging and freight. Investment bank Barrenjoey says major suppliers have flagged “mid- to high-single-digit” price increases – the highest since 2009 – as well as fewer promotions, less discounting and a step-up in “shrinkflation” as they passed on higher costs for key inputs such as wheat, sugar, edible oils, meat, eggs, dairy foods, aluminium and freight. Danone, for example, expects input costs to rise 8 to 9% in the December half, General Mill’s expects costs to rise 7% in 2022 and Unilever is preparing for inflation to be in the high teens. Coles and Woolworths have recently indicated they are likely to pass higher prices on to consumers rather than rejecting or absorbing them.
And that’s it for this week. And next week, I’ll be talking to with Joseph Vartuli, CreditorWatch’s CTO connecting over 50,000 Australian businesses with sophisticated credit risk management tools to navigate the economic turbulence of 2021, by assessing the ability of their creditors to pay what they owe. And I’ll be talking to IFM Investors economist Alex Joiner about the state of the economy.
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