RBA deputy governor Andrew Hauser says another rate rise could be coming when the board meets September 28-29.
Welcome to Talking Business, a podcast produced in Melbourne Australia, built on the traditional lands of the Kulin Nation. 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 businessacumen.biz
I am Leon Gettler. My job is 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 32 in our series for 2026 and today’s date is Friday September 11
First, I’ll be talking to performance expert Andrew Horsfield who draws on two decades working with leaders across business, education and elite sport to reveal how high performers navigate what he calls “the messy middle”, the space between where you are and where you want to be, when progress feels out of your control. He talks about his Lab, a private community of people from different roles, industries and life stages who come together to connect, interact and be inspired.
And I’ll be talking to independent economist Saui Eslake about the state of the Australian economy, inflation and the prospect of another RBA rate hike.
But first, let’s talk to Andrew Horsfield
So what’s happening in the news?
Trump is all-in on AI data centres — he’s basically telling towns that oppose them they want to be “backwards and poor.” But here’s the problem: around 70% of Americans don’t want these things built near them, and Democrats are running hard with it in midterm ads, tying data centre s to power bills and cost of living. Even Republicans are peeling off — Texas Governor Greg Abbott put a moratorium on new builds, and GOP Senate candidates in Michigan and Ohio are calling for pauses too. Strategists have literally warned the White House they’re losing this fight, telling them to talk up AI’s upside (cancer research, tutoring, etc.) instead of scolding voters. Trump’s response so far: double down. Even Sam Altman admitted the industry has “done a terrible job” explaining any of this to the public.
RBA deputy governor Andrew Hauser dropped some hints this week that another rate rise could be coming when the board meets September 28-29. He’s just back from a trip to Texas where he saw the AI boom up close, and it’s left him more worried, not less. His take: AI is great for productivity long-term, but right now the data centre construction boom is adding to inflation pressure, not easing it. The numbers back him up. Inflation came in hotter than expected recently, with the RBA’s preferred measure — trimmed mean inflation — sitting at 3.6%, well above the 2-3% target. GDP growth also beat forecasts. Bond markets now think there’s a 60% chance of a rate hike at the September meeting, taking the cash rate to 4.6% by November. Politically this is awkward timing for the Albanese government — cost-of-living anger is already fuelling a swing toward Pauline Hanson’s One Nation, and another hike won’t help.
Here’s the bigger structural story: HSBC’s Paul Bloxham reckons Australia’s “speed limit” for non-inflationary growth might now be as low as 1.3% a year — less than half the pre-pandemic average of 2.9%. Productivity actually fell 0.2% over the past year. Problem is, the economy’s growing at 2.1%, well above that speed limit, which is exactly why inflation isn’t coming down. Adding to the gloomy picture: NAB’s business survey showed conditions turned negative in August for the first time in six years — businesses are eating higher costs without passing them on, and it’s starting to bite on hiring and investment. Bottom line from the economists: both Treasury’s and the RBA’s own productivity forecasts look too rosy given this data, which strengthens the case for the RBA needing to hike again — possibly more than once — before year end.
So here’s the story dominating property circles right now: Labor’s changes to negative gearing and capital gains tax are triggering what some big players are calling an historic shift — money moving out of houses and into commercial property. We’re talking potentially hundreds of billions of dollars. Tim Church from Morgan Stanley put it bluntly: houses are basically Australia’s household ATM. When prices go up, people feel rich — they renovate, they buy cars, they go on holiday. Reverse that, and the whole economy feels it. He reckons prices could fall as much as 15% from the peak. And it’s already happening. Sydney’s average home value has dropped almost $100,000 since February. Every capital city fell last month. Three rate rises this year, fears of another one, plus the tax changes — that’s the trifecta driving it down. Housing Minister Clare O’Neil isn’t panicking though. Her line: don’t obsess over one month of data — prices are still up 400% since 2000. But even she admits falling values are “unsettling” for people whose home is their biggest asset. CBA has revised its forecast too — now saying the downturn is “larger and faster” than expected, tipping a 10% national fall, 13% in Sydney, extending into next April. Now here’s the twist — David Harrison from Charter Hall says this could actually be good for commercial real estate. He thinks the correction might go even deeper than predicted, because it forces investors to rethink where $3.6 trillion sitting in residential property should actually go. His words: “seismic changes.” Problem is, commercial property — offices, retail, industrial — is already short on supply. Scentre’s Elliott Rusanow says their shopping centres are basically full — 99.8% occupancy across 42 centres. So if capital floods in looking for yield, there’s nowhere for it to go, which likely means rents go up. Bottom line: falling house prices squeeze consumer spending, but they might supercharge commercial property investment — right as that market runs out of room.
Another story, straight from a Senate inquiry into intergenerational housing inequity. NAB’s chief economist Sally Auld dropped a pretty sobering line: even with prices falling, Australia’s affordability crisis won’t be solved. She’s forecasting only a modest 5-7% national price drop this year — and says fixing affordability properly will take “the better part of a generation.” Why? Because this isn’t really about short-term price wobbles. Westpac’s Luci Ellis — a former RBA deputy — traced it back decades: inflation targeting from the ’90s, plus banking deregulation, meant lower interest rates for longer, which meant people could borrow more relative to their income. That’s structurally pushed prices up against wages for 30 years. Add migration into the mix — Australia relies on skilled migrants, but that adds pressure on a housing supply system that’s already struggling to keep up. There’s also a builder’s-side problem: construction costs are up almost 30% in five years, according to the Insurance Council. So even when projects get approved, they don’t always get built — the numbers just don’t stack up for developers anymore. Rising costs, falling prices, squeezed margins — nobody wants to build into that. Greens Senator Barbara Pocock also flagged something worth noting: the huge shrinkage of public housing stock over the decades, meaning the entry-level rental and ownership market has become brutally tight — especially rough on families, with kids in rental households now moving house on average six times before they turn 14.
Shifting from finance to something with real economic and human stakes: bushfire season. Fire chiefs are warning this summer could be one of the worst on record, thanks to a double-whammy: a supersized El Niño, and something called “flash droughts.” Normal droughts build slowly — think of them like an oven, slowly baking the landscape dry. Flash droughts are different — more like a giant hairdryer, ripping moisture out of soil and vegetation in days rather than weeks. Europe just saw this play out, with heatwaves triggering fires that forced 300,000 people to evacuate. Research from UNSW shows that when a standard drought overlaps with a flash drought, fires get 65% bigger, spread 35% faster, and burn 19% longer than normal. Former fire commissioner Greg Mullins says his “oh sh*t moment” was back in 2013, when flash-drought conditions caused major property losses in NSW earlier in the season than anyone had ever seen. And the underlying driver — this El Niño — is shaping up to be one of the strongest ever measured, with ocean temperatures well above anything on record. The UN’s Secretary-General didn’t mince words, warning the planet is heading into “uncharted waters.” For business owners — especially in insurance, agriculture, tourism and regional retail — this isn’t just a weather story. It’s a risk-planning one.
Economists are flagging what one called a “perfect storm”: governments are drowning in debt at the same time tech companies are sucking up trillions in investment for AI infrastructure. Bond investors are demanding higher returns to hold government debt, so rates on government bonds are spiking worldwide — 30-year highs in Japan, 20-year highs in the US, decade-plus highs in Australia. That means bigger interest bills for governments (less money for services), pricier corporate borrowing, and banks nudging up fixed mortgage rates. Add in Trump publicly threatening to cut off trade with countries unless the Fed slashes rates, plus oil spiking from the Iran conflict, and you’ve got a genuinely messy setup — though not everyone’s panicking; one economist called the rate rises “orderly” rather than crisis-level.
Big shift here: in August, battery-electric cars actually outsold both petrol and diesel vehicles in Australia for the first time — about a quarter of all new car sales. Add in plug-in hybrids and battery-powered vehicles are more than a third of the market. Why now? High petrol prices (thanks partly to the Iran conflict squeezing oil supply) plus a wave of cheaper Chinese EVs like BYD. The catch: charging infrastructure is scrambling to keep up, especially for regional road trips — “range anxiety” is turning into “charging anxiety.” Toyota’s still the top-selling brand overall, but BYD and Tesla both posted huge growth.
The government’s about to unveil a “digital duty of care” law that would fine tech companies over $100 million for feeding harmful content to young people via algorithms, and would require platforms to let users switch to a plain chronological feed instead. Predictably, it’s been branded as censorship by tech figures and some Coalition MPs, while others (Greens, sexual-consent advocates) say it doesn’t go far enough and want algorithms made opt-in by default. It’ll have separate rules for under-18s covering things like content around disordered eating or grooming, and will also apply to AI chatbots and gaming platforms, not just social media.
Quick corporate schadenfreude note — KPMG cut roughly 400+ jobs after its audit-misconduct scandal, but botched the payroll on the way out, leaving redundant staff waiting on legally-required final payouts (which, under recent Australian court rulings, are supposed to land on the actual last day of employment — not “sometime later”). Awkward, given KPMG’s own consultants advise other companies on how to handle exactly this.
And this story just keeps growing. ASIC has now revealed that the big four accounting firms — KPMG, PwC, EY and Deloitte — have collectively received 551 whistleblower complaints about alleged audit misconduct since mid-2023. This all traces back to that audit leaks scandal — remember, confidential Lendlease board papers ended up being used to help win audit tender bids for Westpac and Dexus. That’s what triggered ASIC to start digging into what the big four do with whistleblower complaints internally. Now, ASIC’s chair Sarah Court was quick to hose down expectations a bit — she stressed 551 complaints doesn’t mean 551 serious scandals. It’s a mix, and they’re still working through which ones warrant further investigation or enforcement action. When Senator Barbara Pocock tried to get a breakdown — like, is that roughly 130-something complaints per firm? — ASIC actually asked to take that part of the conversation off-camera. The KPMG angle is particularly pointed. Senator Pocock didn’t hold back, essentially saying: KPMG leadership has spent hours telling this committee they’ve “turned over a new leaf,” new culture, trust us — and yet here we are with hundreds of complaints on the table. Her line was basically — new leadership needs to show outcomes, not just talk. And there’s a real sting for KPMG specifically: ASIC is now investigating whether the firm’s 2025 Transparency Report contained false or misleading statements — because that report apparently claimed there were no whistleblower complaints related to audit quality. That’s… obviously in tension with what’s now come out. ASIC’s also broadened its net — they’re looking at individual KPMG corporate entities to see if any director conduct needs scrutiny, not just the partnership structure as a whole. And almost as a footnote in the same hearing — ASIC also announced a separate investigation into super trustee Diversa, over whether it inappropriately charged fees to victims of the First Guardian collapse. That’s the fund where around $300 million of retirees’ money went in before it collapsed.
And that’s it for this week.
And next week, I’ll be talking to Jen Richardson from 123 Financial Group on PayDay Super and what the change means in practice for small business owners and their cash flow.
And I’ll be talking to RMIT professor Sinclair Davidson about Australia’s poor productivity levels.
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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