News Corp CEO Robert Thomson warns AI will create a “tsunami” of job losses at publishers.
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 or at Banking Day.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com.
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 33 in our series for 2023 and today’s date is Friday September 15.
First, I’ll be talking Belinda Sinclair, Head of Sales & Agent Partnerships at Domain who is responsible for all revenue across Domain Residential Business, Product acquisition and who is the Single point of contact/ relationship for customers (Residential agents)
And I’ll be talking to RMIT professor Sinclair Davidson about the intergenerational report.
But first, let’s talk to Belinda Sinclair.
So what’s happening in the news? The US and EU have backed the development of a new ship and rail corridor connecting India to the Middle East and the Mediterranean Sea in a challenge to China’s economic clout in the region. The plan was launched on the sidelines of the G20 summit in New Delhi on the weekend, through a memorandum of understanding agreed by leaders including US President Joe Biden, Indian Prime Minister Narendra Modi and Saudi Crown Prince Mohammed bin Salman, who all shook hands at the end of the event. The proposed corridor would stretch across the Arabian Sea from India to the United Arab Emirates, then cross Saudi Arabia, Jordan and Israel before linking up to Europe. Talks about such a project, which would also include a new undersea cable and energy transport infrastructure, have been going on behind the scenes between the countries involved for months, but they will now proceed on a more formal basis. No binding financial commitments were made, but the parties agreed to come up with an “action plan” over the next 60 days. For the US, the project could act as a counter to Beijing’s growing influence in the region, at a time when Washington’s traditional Arab partners, including the UAE and Saudi Arabia, are deepening ties with China, India and other Asian powers.
The worst budget pain is yet to come for many households around the country, and many economists are not expecting interest rates to move from their current 12-year high for nearly a year. In Reserve Bank governor Philip Lowe’s final meeting, the bank’s board decided to leave the official cash rate at 4.1% for the third consecutive month as economic data shows inflation is still high but falling. Most economists expect incoming Reserve Bank governor Michele Bullock to keep interest rates at 4.1% for the near future, but some expect the first cuts to be early next year while others believe it could be more than 12 months before homeowners see any reprieve. Independent economist Chris Richardson said many Australians are yet to feel the worst of the economic pain. “I think overall pain gets worse from here,” he said. He noted the unemployment rate is expected to rise from its current rate of 3.7% to 4.4% by the end of next year, and those people who lose work will be the most badly affected. Households still on ultra-low fixed-rate mortgage terms will take a financial hit when they roll onto higher variable rates in coming months, and the third most affected are those who received the federal government’s low and middle-income tax offset last year — known as the lamington — who will not get that cash injection this year now that program has ended. “I think it’s the correct policy to have done away with the lamington, but that is a lot of money, — $11 or $12 billion — that was in pockets last year, in July, August, September, not in pockets this year,” Richardson said. Richardson does not expect interest rate cuts to start until at least the end of next year, and one major reason for that is the economic stimulus coming on July 1, 2024 when the stage 3 tax come into effect. Those cuts will boost the take-home pay of all workers earning over $40,000 a year but will predominantly benefit those earning more than $180,000. “We’re 12 months and maybe more away [from rate cuts],” he said.
One of Queensland’s most iconic tourism assets, Hamilton Island, could hit the market with an asking price of around $1bn, seven years after its purchaser Bob Oatley passed away. The family is best known for their extensive history in the winemaking industry and for winning the Sydney to Hobart yacht race nine times. But its investment in Hamilton Island – which is expected to be worth about $1 billion – appears to have been fruitful. In a statement late Sunday night the billionaire Oatley family said that while it had been a proud steward of Hamilton Island for 20 years and has invested significant time, affection and resources to deliver its vision for a world class tourism destination on the Great Barrier Reef, it was now looking to the future. “(We) have put in place a new leadership and approach and (are) conducting a review with the assistance of (our) advisors, to explore opportunities for growth and future prosperity,” a spokesman for Hamilton Island said. “At this stage this review is ongoing and no decisions have been made. We do not intend to comment further until any recommendations have been considered.” However, informed sources say that the Whitsundays Island had been quietly shopped around the market quite recently, following a strong domestic holiday season. Other Queensland islands such as South Molle Island were also on the block. Since Mr Oatley acquired Hamilton Island in 2003 for around $200m – the acquisition price was never revealed – the Oatley family have spent hundreds of millions of dollars upgrading its tourism infrastructure, including reconnecting power from the mainland after it was accidentally cut. The Oatleys developed the luxury resort qualia, which opened in 2006, and also built the Hamilton Island Yacht Club and Villas, as well as spending $45m on the Hamilton Island Golf Club. Unlike other Queensland tourism resorts, Hamilton Island is attractive to investors because it sports an international runway.
Five hundred health professionals have demanded industry superannuation fund HESTA publicly denounce Woodside’s sanctioning of the Trion oil field development and commit to a timeframe for divesting from the oil giant over greenwashing concerns. In a letter to HESTA chief executive Debbie Blakey, the doctors, nurses and allied health workers accused the fund of failing to “live up to its claims of climate leadership”, calling for action within a fortnight. The super fund put Woodside and Santos 12 months ago on its “watchlist” – meaning they needed to show they were improving their emissions reduction or risk divestment. But members said HESTA had since failed to escalate its concerns effectively with the companies. Woodside’s Trion decision in June was “an egregious step in the wrong direction” and showed the company was “moving in the opposite direction” to emissions reduction, members wrote, meaning HESTA’s engagement approach had failed. The letter comes as super fund members get more active in pushing super funds for climate action. HESTA is already facing a legal claim from a member that its lack of pressure on fossil fuel giants Woodside and Santos to clean up their acts amounts to greenwashing, and it and 19 other funds received legal letters in April from members concerned with their investments in Santos’ $5.8 billion Barossa gas project. The consumer and investments watchdogs are also cracking down on greenwashing – companies lying about how environmentally friendly their investments, products or practices are – and super funds specifically are in their sights. The Australian Securities and Investments Commission is suing Mercer, Active Super and Vanguard in separate greenwashing cases over their investment selection and has warned it is investigating several more super funds and trustees. . HESTA, like many funds, justifies its holdings in fossil fuel companies despite its own green commitments by promising to be active investors and push these outfits towards a faster energy transition, but members wrote this was failing with Woodside. “Woodside’s decision to go ahead with Trion shows it has failed to heed HESTA’s requests for 1.5 degrees alignment and increased pressure. The fund must now implement its escalation framework to the fullest extent,” the members wrote. With the “assess, monitor and vote” steps of HESTA’s engagement framework exhausted, they wrote, it “must now consider divestment as there has been no evidence of change from Woodside”.
One of Rupert Murdoch’s top lieutenants has warned that AI threatens a “tsunami” of job losses in the media and could crush readers under a weight of “maggot-ridden mind mould”. News Corporation chief executive Robert Thomson told a conference in San Francisco that the rapid rise of artificial intelligence was “epochal”. Thomson said that AI will lead to a “tsunami” of job losses. “From 2008 to 2020, 57% of newsroom jobs in the United States have been lost,” he said. “We’re facing another wave, in this case, a tsunami potentially of job losses because of the impact of AI. And these are not just jobs lost, but its insight lost. And so it’s important that all media companies understand the impact, but also, it’s incumbent on the big AI players to understand their impact.” While warnings about AI job losses are not limited to newsrooms, Thomson warned that there was a greater societal risk: that we will become deluged by a stream of AI-generated “rubbish”. “People have to understand that AI is essentially retrospective. It’s about permutations of pre-existing content. And the danger is, it’s rubbish in, rubbish out, and in this case, rubbish all about,” Thomson said. “Instead of elevating and enhancing, what you might find is that you have this ever shrinking cycle of sanity surrounded by a reservoir of rubbish. That instead of the insight that AI can potentially bring, it will evolve into essentially a maggot-ridden mind mould.” Concerns about technology are not new. Rupert Murdoch has spent much of the last decade and a half at war with Google. claiming the internet giant has been ripping off his content. The Australian media tycoon has called the search engine a “parasite” and “kleptomaniac”, accusing it of stealing work from a newspaper empire that includes The Times, The Sun, The Wall Street Journal and the New York Post.
Gina Rinehart has not ruled out launching a bid to rival Albemarle’s $6.6 billion takeover tilt at Liontown Resources after confirming she now holds a strategic stake in the West Australian lithium prize. Mrs Rinehart’s Hancock Prospecting revealed late on Monday that it has a 7.72% stake in Liontown, and intends to have a say in the future of one of the world’s biggest lithium projects. The private company controlled by Australia’s richest person indicated it may seek a seat on the Liontown board and provide mining firepower to Liontown’s flagship Kathleen Valley lithium project. Mrs Rinehart also signalled her interest in moving downstream in lithium, and a willingness to work with other Liontown investors – chiefly Albemarle – on that front. Hancock’s disclosure came hours after Liontown announced it allowed New York-listed Albemarle into its data room to undertake exclusive due diligence for four weeks. West Perth-headquartered Hancock said there were still risks associated with bringing Kathleen Valley into production. In a $300 million sharemarket raid, Hancock boosted its stake from 4.9% to nearly 8% last week. The stock closed at $3.01 on Monday, just above the Albemarle offer pitched at $3 a share. The move on Liontown represents Mrs Rinehart’s biggest foray into lithium so far. She is a long-time shareholder in Vulcan Energy and investor in Delta Lithium on top of a lithium exploration venture in WA involving the Indian government. Liontown has offtake agreements in place until 2030 for the bulk of the spodumene it plans to start producing at Kathleen Valley within the next 12 months. Albemarle intends to honour those offtake deals – with Ford, Tesla and LG Energy Solution – if its takeover bid is successful.
The Albanese government looks set to pass its signature housing policy through parliament this week after offering a $1 billion sweetener to the Greens, as the minor party dropped its key demand for a residential rent freeze. But the breakthrough – with the new funding handed to the National Housing and Investment Finance Corporation for spending this financial year – could exacerbate supply chain and capacity constraints, according to economists. Describing the plan as “a drop in the ocean” for much-need new supply, AMP Capital chief economist Shane Oliver warned a huge pipeline of works already existed. “The main problem is shortfalls of materials and particular shortages of workers,” he said. “Right now we’re having trouble trying to build something like 165,000 dwellings a year. The reality is we need at least 220,000 to keep up with underlying demand. It’s all pie in the sky if we don’t have the means to build them.” The deal announced by Greens leader Adam Bandt and housing spokesman Max Chandler-Mather will give Labor immediate Senate support for the $10 billion Housing Australia Future Fund bill. It ends months of delay and comes after the government earlier promised an extra $2 billion in immediate funding to the states for public housing in June. The stalemate had even prompted Prime Minister Anthony Albanese to threaten early double dissolution The Greens said they would still push for a nationally co-ordinated rent freeze. Their size on the Senate crossbench means they could threaten speedy passage of Petroleum Resources Rent Tax changes and plans to wind back tax concessions for people with more than $3 million in superannuation. The Greens say that latter change must come with rules to require super contributions on paid parental leave. The rent freeze plan is opposed by all state and territory governments. Both sides claimed Monday’s deal as a win, and the bill is set to fly through the upper house with support from crossbenchers including David Pocock and Jacqui Lambie.
The country’s biggest superannuation fund has acquired a minority stake in Vantage, joining global alternative investment manager DigitalBridge, which remains the majority shareholder. Vantage’s portfolio of hyperscale data centre campuses includes facilities across Europe and in South Africa. The company recently outlined plans to enter the London market with 75 megawatts of capacity across two campuses. AustralianSuper’s big push into data centres – expanding a $40 billion infrastructure portfolio – comes as the takeup of AI drives massive growth in data centre development and an exponential increase in the size of these centres.
Australia’s biggest health company CSL is aiming to crack the $US21.6bn ($A33.54bn) asthma market, developing a drug to stop inflammation in the lungs that triggers the chronic respiratory condition. The therapy is set to highlight CSL, the third biggest company on the ASX behind BHP and Commonwealth Bank, in the minds of consumers, given more than 10 per cent of Australia’s population, or 2.7 million people, suffer from asthma. Crucially, the drug, called trabikibart or CSL311, could shift people away from long-term use of traditional steroid therapies usually administered with an inhaler, and prevent side effects which can range from impaired growth in children to cataracts. Chief scientific officer Andrew Nash said the aim was to deliver more personalised treatment for those with severe uncontrolled asthma than more conventional therapies. The asthma treatment is a recombinant antibody that blocks a family of receptors, halting the inflammatory response in the lungs that causes severe asthma attacks. This compares with current antibody therapies for asthma which target just one receptor. It is expected it will take another five years for the asthma drug to be publicly available. It must pass three phases of clinical trials and gain regulatory approval before it an be sold for widespread use. It was developed in partnership with SA Pathology’s Centre for Cancer Biology, which has been working with CSL for the past 20 years. CSL, which has a market value of almost $130bn, flagged the therapy in 2019 but it hasn’t been able to start a phase one clinical trial until now, after the pandemic delayed the recruitment of patients for the study. The company, which was established 100 years ago as the government-owned Commonwealth Serum Laboratory before it was floated on the ASX in the 1990s, spends about $1bn on research and development each year, fuelling a global suite of lifesaving drugs and vaccines.
And that’s it for this week. And next week, I’ll be talking to Ivan Curic, Head of Commercial, Developers and Agency, Domain Group
And I’ll be talking to Indeed economist Callam Pickering about the latest jobs figures.
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Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week
