1 00:00:03,840 --> 00:00:08,940 Michael Thompson: BHP says it underpaid workers more than 430 million dollars. 2 00:00:09,300 --> 00:00:13,469 Michael Thompson: Victoria Cross recipient, Ben Robert Smith, loses a landmark defamation 3 00:00:13,469 --> 00:00:16,649 Michael Thompson: case with the judge finding he committed serious war crimes, 4 00:00:16,650 --> 00:00:20,040 Michael Thompson: including murder, and why people are moving around the country 5 00:00:20,070 --> 00:00:24,450 Michael Thompson: more than ever. It's Friday the 2nd of June, 2023. Welcome 6 00:00:24,450 --> 00:00:27,870 Michael Thompson: to Fear and Greed, Australia's most popular business podcast. I'm 7 00:00:27,870 --> 00:00:30,090 Michael Thompson: Michael Thompson and good morning, Sean Aylmer. 8 00:00:30,389 --> 00:00:31,440 Sean Aylmer: Good morning, Michael. 9 00:00:31,710 --> 00:00:34,379 Michael Thompson: Sean, after the show, you are speaking today with Tim 10 00:00:34,379 --> 00:00:36,570 Michael Thompson: Lawless, head of research at CoreLogic. 11 00:00:37,109 --> 00:00:40,409 Sean Aylmer: Yes. With those figures coming out this week about what's 12 00:00:40,409 --> 00:00:43,769 Sean Aylmer: happening in the housing market and particularly the boom in 13 00:00:43,769 --> 00:00:47,219 Sean Aylmer: house prices, Sydney primarily, but Melbourne as well. In fact 14 00:00:47,219 --> 00:00:50,219 Sean Aylmer: all capital cities rose. We talk to Tim about what's 15 00:00:50,219 --> 00:00:54,810 Sean Aylmer: going on, why that's the case, and most importantly whether 16 00:00:55,020 --> 00:00:57,480 Sean Aylmer: it will continue. Now, Tim is certainly one of the 17 00:00:57,480 --> 00:01:00,390 Sean Aylmer: preeminent judges of what's going on in the housing market, 18 00:01:00,390 --> 00:01:02,610 Sean Aylmer: so it is well worth a listen if you're interested 19 00:01:02,849 --> 00:01:03,540 Sean Aylmer: in housing. 20 00:01:03,840 --> 00:01:06,330 Michael Thompson: Yeah, absolutely. Well worth sticking around for. It's coming up 21 00:01:06,330 --> 00:01:07,739 Michael Thompson: a little bit later on, but the main story this 22 00:01:07,740 --> 00:01:12,870 Michael Thompson: morning, Sean, BHP says about 28 and a half thousand 23 00:01:12,870 --> 00:01:17,520 Michael Thompson: past and present employees have been underpaid 430 million dollars 24 00:01:17,880 --> 00:01:22,348 Michael Thompson: after conceding that it had wrongly deducted annual leave from 25 00:01:22,349 --> 00:01:25,078 Michael Thompson: staff entitlements for more than a decade. 26 00:01:25,440 --> 00:01:28,589 Sean Aylmer: Yes. The company reported itself to the Fair Work Ombudsman 27 00:01:28,590 --> 00:01:31,259 Sean Aylmer: and said the issue related to the accounting treatment of 28 00:01:31,260 --> 00:01:37,260 Sean Aylmer: public holidays, which had been miscalculated since 2010. Thirteen years. 29 00:01:37,260 --> 00:01:40,559 Sean Aylmer: That's a long time. Many reports say that BHP Systems 30 00:01:40,559 --> 00:01:43,769 Sean Aylmer: didn't update sufficiently to account for new legislation at the 31 00:01:43,770 --> 00:01:46,379 Sean Aylmer: time. It's a bit of a flashpoint issue at the 32 00:01:46,379 --> 00:01:51,210 Sean Aylmer: moment because BHP has created an in- house contracting team 33 00:01:51,360 --> 00:01:56,189 Sean Aylmer: called Operations Services. Most Operations Services staff are based in 34 00:01:56,190 --> 00:01:58,619 Sean Aylmer: the Queensland coal fields, and they earn wages that are 35 00:01:58,620 --> 00:02:02,040 Sean Aylmer: lower than those earned by workers at the same mine 36 00:02:02,130 --> 00:02:05,670 Sean Aylmer: who are covered by a different enterprise agreement. That's the 37 00:02:05,670 --> 00:02:09,089 Sean Aylmer: sort of arrangement that the Albanese governments, same job, same 38 00:02:09,090 --> 00:02:13,830 Sean Aylmer: pay legislation, is looking to abolish. That legislation is still 39 00:02:13,830 --> 00:02:17,820 Sean Aylmer: being negotiated and when things like this happen, BHP yesterday, 40 00:02:18,360 --> 00:02:21,660 Sean Aylmer: it gives the government more ammunition to push what it 41 00:02:21,660 --> 00:02:25,019 Sean Aylmer: wants. Yesterday, Employment Minister Tony Burke, jumped on the BHP 42 00:02:25,050 --> 00:02:27,570 Sean Aylmer: news to push for the legislation. 43 00:02:28,800 --> 00:02:33,120 Michael Thompson: Sean, underpayment is becoming a really serious issue because we've 44 00:02:33,120 --> 00:02:35,250 Michael Thompson: talked about this on a number of occasions now. There's 45 00:02:35,250 --> 00:02:36,900 Michael Thompson: been a bunch of recent examples. 46 00:02:37,080 --> 00:02:39,120 Sean Aylmer: Sure has. The banks have been caught up in this, 47 00:02:39,120 --> 00:02:41,429 Sean Aylmer: for example, the retailers have been caught up in it. 48 00:02:42,270 --> 00:02:45,900 Sean Aylmer: Mostly, they don't deliberately try and underpay, it's just that 49 00:02:45,900 --> 00:02:51,270 Sean Aylmer: the legislation is so complex and the need for good 50 00:02:51,270 --> 00:02:54,689 Sean Aylmer: systems so important that they just don't get it right. 51 00:02:54,690 --> 00:02:57,660 Sean Aylmer: Now, that's not necessarily an excuse for BHP. It's got 52 00:02:57,660 --> 00:02:59,430 Sean Aylmer: a lot of money behind it. It should be getting 53 00:02:59,430 --> 00:03:03,780 Sean Aylmer: this right. Mass underpayment by major corporates has soared during 54 00:03:03,780 --> 00:03:07,320 Sean Aylmer: the past four years, particularly the Fair Work Ombudsman recovered 55 00:03:07,590 --> 00:03:12,059 Sean Aylmer: a record 532 million dollars in back pay in the 56 00:03:12,059 --> 00:03:15,659 Sean Aylmer: last financial year. More than half of that came from 57 00:03:15,660 --> 00:03:19,830 Sean Aylmer: big companies that were forced to back pay 279 million 58 00:03:19,830 --> 00:03:24,418 Sean Aylmer: dollars to about 267,000 employees. So as you say, Michael, 59 00:03:24,450 --> 00:03:27,150 Sean Aylmer: it's a very serious issue and it's a growing issue. 60 00:03:28,050 --> 00:03:29,849 Michael Thompson: A question that you might not know the answer to, 61 00:03:29,849 --> 00:03:32,640 Michael Thompson: Sean, how do these things get discovered? Would it be 62 00:03:33,299 --> 00:03:36,389 Michael Thompson: a combination of internal audits or is it people just 63 00:03:37,080 --> 00:03:39,870 Michael Thompson: checking their pay slips and going, something doesn't feel right here? 64 00:03:40,290 --> 00:03:42,840 Sean Aylmer: Mostly it's internal audits because this one, for example, has 65 00:03:42,840 --> 00:03:45,780 Sean Aylmer: been going on for 13 years, so people get very used 66 00:03:45,780 --> 00:03:48,480 Sean Aylmer: to it. There might be, in this instance I gather, 67 00:03:48,480 --> 00:03:50,190 Sean Aylmer: I can't say this a hundred percent, there was a 68 00:03:50,190 --> 00:03:55,710 Sean Aylmer: change in legislation around annual leave and how people were 69 00:03:55,710 --> 00:03:58,650 Sean Aylmer: rewarded for that. They obviously didn't change their systems to 70 00:03:58,650 --> 00:04:00,570 Sean Aylmer: take into account. No one noticed that at the time, 71 00:04:00,750 --> 00:04:03,599 Sean Aylmer: and then at some point it's been audited and people 72 00:04:03,599 --> 00:04:06,389 Sean Aylmer: realize what's been going on. Generally, the companies don't do 73 00:04:06,389 --> 00:04:10,770 Sean Aylmer: it intentionally. In fact, almost never do it intentionally, though 74 00:04:10,770 --> 00:04:12,329 Sean Aylmer: I'm not sure that's an excuse. 75 00:04:12,809 --> 00:04:15,540 Michael Thompson: Now, and it also seems like there's not a huge 76 00:04:15,540 --> 00:04:20,040 Michael Thompson: amount of public criticism necessarily of companies that do this 77 00:04:20,040 --> 00:04:23,820 Michael Thompson: because it feels like any one of us could be 78 00:04:23,820 --> 00:04:27,599 Michael Thompson: next. Any company could be the next one to realize 79 00:04:27,599 --> 00:04:29,129 Michael Thompson: that actually there is a problem in the way that 80 00:04:29,129 --> 00:04:30,059 Michael Thompson: we've been paying people. 81 00:04:30,450 --> 00:04:32,760 Sean Aylmer: Yeah, absolutely. I mean, the retailers for years have complained 82 00:04:32,760 --> 00:04:36,000 Sean Aylmer: about the number of different awards across states. It is 83 00:04:36,060 --> 00:04:40,410 Sean Aylmer: a real problem. Obviously, the union movement gets very upset 84 00:04:40,410 --> 00:04:42,748 Sean Aylmer: when it's uncovered, and they have every right to do 85 00:04:42,750 --> 00:04:44,759 Sean Aylmer: that because these companies are very large and they should 86 00:04:44,759 --> 00:04:46,020 Sean Aylmer: actually be able to get this right. 87 00:04:46,859 --> 00:04:49,650 Michael Thompson: And of course today the Fair Work Commission will hand 88 00:04:49,650 --> 00:04:52,470 Michael Thompson: down its annual minimum and award wage decision. 89 00:04:52,800 --> 00:04:55,710 Sean Aylmer: Yes, very, very big announcement. There's been plenty of argy- 90 00:04:55,710 --> 00:04:58,950 Sean Aylmer: bargy around this. A large rise will influence the Reserve 91 00:04:58,950 --> 00:05:01,590 Sean Aylmer: Bank towards lifting interest rates when it meets next week. 92 00:05:01,799 --> 00:05:05,789 Sean Aylmer: Wages without productivity growth remains one of Reserve Bank Governor, 93 00:05:05,789 --> 00:05:09,810 Sean Aylmer: Philip Lowe's, chief concerns. Now, Federal Treasury has assumed a 94 00:05:09,810 --> 00:05:13,678 Sean Aylmer: 7% lift in the minimum wage. Probably more important is 95 00:05:13,680 --> 00:05:17,070 Sean Aylmer: the award wage part of it. That's expected to rise 96 00:05:17,070 --> 00:05:21,509 Sean Aylmer: somewhere between 4% and 7%. Be very, very interesting to 97 00:05:21,509 --> 00:05:23,099 Sean Aylmer: see how that one turns out. 98 00:05:23,430 --> 00:05:25,860 Michael Thompson: Yeah, it certainly will, and we'll hear your take on it 99 00:05:25,860 --> 00:05:28,740 Michael Thompson: this afternoon in the afternoon report. How did local markets 100 00:05:28,740 --> 00:05:29,670 Michael Thompson: perform yesterday, Sean? 101 00:05:29,670 --> 00:05:36,719 Sean Aylmer: The S&P/ASX 200 closed up 0. 3% to 7, 111 points. Healthcare 102 00:05:36,719 --> 00:05:39,719 Sean Aylmer: and tech stocks did best. Consumer staples and telco companies 103 00:05:39,719 --> 00:05:42,599 Sean Aylmer: also outperformed. All those sectors are defensive. They tend to 104 00:05:42,630 --> 00:05:45,360 Sean Aylmer: do better when times are tough. That pretty much illustrates 105 00:05:45,360 --> 00:05:47,250 Sean Aylmer: the mood in the market at the moment. Among the 106 00:05:47,250 --> 00:05:51,060 Sean Aylmer: large caps, CSL, Fortescu Metals and Woolies all jumped by around 1. 107 00:05:51,060 --> 00:05:55,859 Sean Aylmer: 2%. Transurban was off 1. 3%. Woodside Energy, ANZ and 108 00:05:55,860 --> 00:05:59,219 Sean Aylmer: Westpac all underperformed. Worth having a quick look at Paladin 109 00:05:59,219 --> 00:06:02,640 Sean Aylmer: Energy, its share price jumped 11% yesterday after it said 110 00:06:02,640 --> 00:06:06,930 Sean Aylmer: it wasn't aware of any imminent Namibian legislation that would 111 00:06:06,930 --> 00:06:10,889 Sean Aylmer: affect its 75% owned mine. Remember earlier in the week, 112 00:06:10,889 --> 00:06:13,799 Sean Aylmer: a Namibian government minister said the country should get equity 113 00:06:13,799 --> 00:06:17,130 Sean Aylmer: in all mines in the country for free. That sent 114 00:06:17,190 --> 00:06:21,330 Sean Aylmer: Paladin's share price down 20%. It regained half of that 115 00:06:21,330 --> 00:06:23,760 Sean Aylmer: yesterday. It was the best of the top 200. Some 116 00:06:23,760 --> 00:06:26,879 Sean Aylmer: of the gold stocks also outperformed yesterday. Market leader, Newcrest 117 00:06:26,880 --> 00:06:29,940 Sean Aylmer: Mining, finished up 2. 7% while Northern Star was 3. 118 00:06:29,940 --> 00:06:31,110 Sean Aylmer: 2% higher. 119 00:06:31,469 --> 00:06:34,800 Michael Thompson: Did you expect to be talking about Namibia this much, 120 00:06:34,889 --> 00:06:35,640 Michael Thompson: Sean, this week? 121 00:06:35,640 --> 00:06:38,490 Sean Aylmer: No, and it's a very hard word to say, Namibia. 122 00:06:38,550 --> 00:06:41,370 Michael Thompson: I know it's really, really hard. It looks so easy, 123 00:06:41,370 --> 00:06:42,988 Michael Thompson: doesn't it? And then you say it and you're like, 124 00:06:42,990 --> 00:06:44,219 Michael Thompson: nope, stumbled over that one. 125 00:06:44,550 --> 00:06:48,569 Sean Aylmer: So I think we have Anglicized versions of country names 126 00:06:48,990 --> 00:06:51,928 Sean Aylmer: and I think Namibia is the hardest of the lot. I'm 127 00:06:51,928 --> 00:06:56,070 Sean Aylmer: sure in the local language I'd have no chance of 128 00:06:56,070 --> 00:06:59,700 Sean Aylmer: saying a bunch of countries names, but at least in the Anglo side 129 00:06:59,700 --> 00:07:03,419 Sean Aylmer: of things, Namibia. Find a more difficult one than that one. 130 00:07:03,809 --> 00:07:06,270 Michael Thompson: Okay, challenge accepted. I will do that and I'll come 131 00:07:06,270 --> 00:07:09,510 Michael Thompson: back to you. In the meantime, international markets, what's going on? 132 00:07:10,139 --> 00:07:13,110 Sean Aylmer: Big development yesterday, fears of the US defaulting on five 133 00:07:13,110 --> 00:07:18,240 Sean Aylmer: June were alleviated, not dismissed, alleviated, yesterday morning, Australian time, 134 00:07:18,480 --> 00:07:20,820 Sean Aylmer: after the House of Representatives in the US passed a 135 00:07:20,820 --> 00:07:24,179 Sean Aylmer: bill to raise the debt ceiling. It's a major victory 136 00:07:24,179 --> 00:07:27,299 Sean Aylmer: for Republican Speaker of the House, Kevin McCarthy, and it 137 00:07:27,299 --> 00:07:31,650 Sean Aylmer: now goes to the Senate. Now the house voted 314 to 117 in favor of 138 00:07:31,650 --> 00:07:37,440 Sean Aylmer: the bill, but US politics is convoluted. No such thing 139 00:07:37,440 --> 00:07:40,320 Sean Aylmer: as voting along party lines as occurs here in Australia. 140 00:07:40,500 --> 00:07:44,849 Sean Aylmer: So the yes vote, those 314 yes votes included 165 141 00:07:44,849 --> 00:07:50,730 Sean Aylmer: Democrats and 149 Republicans, while there were representatives from both 142 00:07:50,730 --> 00:07:55,620 Sean Aylmer: sides who voted against it. So it's like a Southern 143 00:07:55,620 --> 00:08:01,469 Sean Aylmer: Democrat may well be more right wing than a northern 144 00:08:01,530 --> 00:08:03,119 Sean Aylmer: Republican. I think I got that right. 145 00:08:03,570 --> 00:08:06,960 Michael Thompson: Can you imagine being the one doing the numbers? Trying 146 00:08:06,960 --> 00:08:08,640 Michael Thompson: to figure out who's going to vote. I mean I've 147 00:08:08,640 --> 00:08:10,680 Michael Thompson: watched the West Wing, so I know how this kind 148 00:08:10,680 --> 00:08:10,891 Michael Thompson: of thing works. 149 00:08:10,891 --> 00:08:11,010 Sean Aylmer: We know how it works. 150 00:08:11,010 --> 00:08:13,830 Michael Thompson: You have people tallying, going, yeah, we've got the numbers to 151 00:08:13,830 --> 00:08:16,650 Michael Thompson: get this through. How on earth would you figure out 152 00:08:16,650 --> 00:08:18,000 Michael Thompson: where everyone stands on that? 153 00:08:18,240 --> 00:08:20,130 Sean Aylmer: I do not know. I do not know. It's quite 154 00:08:20,130 --> 00:08:24,179 Sean Aylmer: incredible. Anyway, it goes to the Senate first and then 155 00:08:24,180 --> 00:08:26,610 Sean Aylmer: it goes to the President, Joe Biden, for his signature, 156 00:08:26,670 --> 00:08:29,610 Sean Aylmer: assuming it gets through the Senate. That news was calming 157 00:08:29,610 --> 00:08:32,910 Sean Aylmer: for markets. Otherwise, oil prices are down again. Gold has 158 00:08:32,910 --> 00:08:35,880 Sean Aylmer: risen in recent sessions and the Aussie dollar is trading 159 00:08:35,880 --> 00:08:37,950 Sean Aylmer: just over 65 US cents. 160 00:08:38,400 --> 00:08:39,809 Michael Thompson: All right, we'll be back in a moment with the 161 00:08:39,809 --> 00:08:49,920 Michael Thompson: rest of the day's business news. Sean, after 110 days 162 00:08:49,920 --> 00:08:55,020 Michael Thompson: in court, 41 witnesses and around 25 million in legal 163 00:08:55,020 --> 00:08:58,979 Michael Thompson: fees, Justice Anthony Besanko has found that The Age, the 164 00:08:58,980 --> 00:09:02,130 Michael Thompson: Sydney Morning Herald and the Canberra Times have proven some 165 00:09:02,130 --> 00:09:06,210 Michael Thompson: allegations of war crimes against Victoria Cross recipient, Ben Robert Smith. 166 00:09:06,600 --> 00:09:09,569 Sean Aylmer: It's probably the biggest defamation trial ever in Australia, and 167 00:09:09,570 --> 00:09:14,160 Sean Aylmer: Justice Besanko found the news outlets had established the substantial 168 00:09:14,160 --> 00:09:17,400 Sean Aylmer: truth of the key allegation in the case, that Robert 169 00:09:17,400 --> 00:09:21,390 Sean Aylmer: Smith was involved in the unlawful killing of unarmed Afghan 170 00:09:21,480 --> 00:09:25,530 Sean Aylmer: prisoners. Justice Besanko ruled that Mr. Robert Smith had committed 171 00:09:25,530 --> 00:09:28,620 Sean Aylmer: murders of civilians, including a farmer kicked off a cliff 172 00:09:28,860 --> 00:09:32,069 Sean Aylmer: in the village of Darwin, and a one- legged man 173 00:09:32,070 --> 00:09:35,309 Sean Aylmer: dragged from a tunnel at the compound known as Whiskey 174 00:09:35,340 --> 00:09:39,179 Sean Aylmer: 108. The finding pretty much ends Mr. Robert Smith's treasured 175 00:09:39,179 --> 00:09:43,708 Sean Aylmer: reputation as an Australian war hero. Robert Smith claimed that 176 00:09:43,710 --> 00:09:46,679 Sean Aylmer: the articles wrongly accused him of war crimes in Afghanistan 177 00:09:46,679 --> 00:09:49,500 Sean Aylmer: and domestic violence at home. The newspapers stood by the 178 00:09:49,500 --> 00:09:54,090 Sean Aylmer: articles, calling 26 witnesses, including former special air services soldiers 179 00:09:54,330 --> 00:09:57,450 Sean Aylmer: and three Afghan locals to give evidence that the information 180 00:09:57,450 --> 00:10:00,718 Sean Aylmer: it reported is true. I think it's a very sad 181 00:10:00,720 --> 00:10:02,218 Sean Aylmer: story at the end of the day, Michael. 182 00:10:02,400 --> 00:10:06,240 Michael Thompson: Yeah, it certainly is an extraordinary one all round. Sean, business 183 00:10:06,240 --> 00:10:09,958 Michael Thompson: investment, which is a key component of economic growth, rose 184 00:10:09,960 --> 00:10:13,920 Michael Thompson: 2.4% during the march quarter with spending on equipment and 185 00:10:13,920 --> 00:10:15,090 Michael Thompson: machinery soaring. 186 00:10:15,510 --> 00:10:18,059 Sean Aylmer: Okay, time for an economics lesson, Michael. I reckon you 187 00:10:18,059 --> 00:10:19,108 Sean Aylmer: really want one, don't you? 188 00:10:20,190 --> 00:10:23,700 Michael Thompson: Yes. No, actually I do. I enjoy your economics lessons. 189 00:10:25,469 --> 00:10:27,150 Sean Aylmer: Righto. If you think about the economy, you have consumption. 190 00:10:27,630 --> 00:10:31,228 Michael Thompson: See, whenever you say consumption, I think of tuberculosis. 191 00:10:31,679 --> 00:10:36,270 Sean Aylmer: Right. That's a really bad start in terms of being 192 00:10:36,360 --> 00:10:37,410 Sean Aylmer: a economics lesson. 193 00:10:37,500 --> 00:10:39,689 Michael Thompson: Okay. All right, so all right, so if we just 194 00:10:39,690 --> 00:10:43,920 Michael Thompson: kind of rewind. I need to separate consumption and TB 195 00:10:43,920 --> 00:10:46,200 Michael Thompson: in my head and just, okay, I'm focused. 196 00:10:46,350 --> 00:10:48,029 Sean Aylmer: That's a very old fashioned term. 197 00:10:48,119 --> 00:10:49,620 Michael Thompson: I know, and I don't know why. 198 00:10:49,679 --> 00:10:52,800 Sean Aylmer: My grandmother would've said that. Would've said you had consumption. 199 00:10:52,860 --> 00:10:55,828 Michael Thompson: TB has not been called consumption for so long, but 200 00:10:55,830 --> 00:10:58,650 Michael Thompson: for some reason every time you say it, there's this 201 00:10:58,650 --> 00:11:00,718 Michael Thompson: word association in my head and go, oh yeah, Sean's 202 00:11:00,719 --> 00:11:03,810 Michael Thompson: talking about TB. He's not. He's talking about the economy. 203 00:11:03,839 --> 00:11:04,350 Michael Thompson: Please go on. 204 00:11:04,350 --> 00:11:06,988 Sean Aylmer: That's right. Okay, so you have consumption. Retail spending's a big 205 00:11:06,990 --> 00:11:10,230 Sean Aylmer: part of that. It's trending lower. You also have government 206 00:11:10,230 --> 00:11:16,080 Sean Aylmer: spending that's mildly expansionary, and then you have investment. Thing 207 00:11:16,080 --> 00:11:19,949 Sean Aylmer: about investment, it is much more volatile than the others. So 208 00:11:19,950 --> 00:11:24,480 Sean Aylmer: as a result, when the economy surges or contracts, often 209 00:11:24,480 --> 00:11:26,820 Sean Aylmer: it's because of business investment. That's why we watch it 210 00:11:26,820 --> 00:11:29,790 Sean Aylmer: so closely. Figures from the Bureau of Statistics show that 211 00:11:29,790 --> 00:11:32,760 Sean Aylmer: business investment is up 6. 3% compared to a year 212 00:11:32,760 --> 00:11:36,420 Sean Aylmer: ago, which is actually pretty good. The bureau also asks 213 00:11:36,420 --> 00:11:39,479 Sean Aylmer: businesses how much they're going to invest, and that's the 214 00:11:39,480 --> 00:11:43,320 Sean Aylmer: one economists like to keep a close watch on. Yesterday's 215 00:11:43,320 --> 00:11:47,429 Sean Aylmer: data suggests investment is moderating and certainly will in the 216 00:11:47,429 --> 00:11:50,639 Sean Aylmer: second half of this year. Put all that together. What's 217 00:11:50,639 --> 00:11:53,400 Sean Aylmer: it mean? The economy is definitely slowing, Michael. 218 00:11:54,150 --> 00:11:57,750 Michael Thompson: Sean, just one term that I need clarification on. Having 219 00:11:58,109 --> 00:12:02,040 Michael Thompson: already cleared up the confusion around consumption. When you say 220 00:12:02,040 --> 00:12:05,070 Michael Thompson: mildly expansionary, what does that exactly mean? 221 00:12:05,400 --> 00:12:07,890 Sean Aylmer: Well, it's putting into the economy more than it's taking 222 00:12:07,920 --> 00:12:11,520 Sean Aylmer: out. So Phil Lowe, the Reserve Bank governor, actually this 223 00:12:11,520 --> 00:12:15,960 Sean Aylmer: week, when asked specifically whether last week's budget was adding 224 00:12:15,960 --> 00:12:18,540 Sean Aylmer: to growth or detracting from growth, and you can detract 225 00:12:18,779 --> 00:12:22,050 Sean Aylmer: from growth by taking taxes from people. If you have 226 00:12:22,050 --> 00:12:24,630 Sean Aylmer: a really high tax take that might be contractionary, if 227 00:12:24,630 --> 00:12:27,929 Sean Aylmer: you're spending lots. So during Covid, it was certainly expansionary with 228 00:12:27,929 --> 00:12:30,420 Sean Aylmer: JobKeeper and things like that. He was asked what it 229 00:12:30,420 --> 00:12:35,250 Sean Aylmer: was and he said " mildly expansionary". So mildly putting growth into 230 00:12:35,250 --> 00:12:35,790 Sean Aylmer: the economy. 231 00:12:36,179 --> 00:12:38,130 Michael Thompson: Okay. God, I learn some stuff on this show. 232 00:12:39,690 --> 00:12:40,410 Sean Aylmer: Do you retain it? 233 00:12:41,190 --> 00:12:45,540 Michael Thompson: I do. I welcome any pop quiz from you. 234 00:12:45,870 --> 00:12:45,900 Sean Aylmer: Righto. 235 00:12:45,929 --> 00:12:46,800 Michael Thompson: At any time. 236 00:12:46,950 --> 00:12:46,980 Sean Aylmer: Righto. 237 00:12:47,340 --> 00:12:50,730 Michael Thompson: They are big words and I don't know whether I'm going 238 00:12:50,730 --> 00:12:52,859 Michael Thompson: to be able to back it up. Now, last week, 239 00:12:52,920 --> 00:12:56,250 Michael Thompson: Commonwealth Bank Boss, Matt Common, mandated that staff come into 240 00:12:56,250 --> 00:13:00,960 Michael Thompson: the office at least 50% of the time. Yesterday it became 241 00:13:00,960 --> 00:13:06,270 Michael Thompson: clear how many people will be affected when Mr. Common 242 00:13:06,270 --> 00:13:10,589 Michael Thompson: said thousands of bank employees are currently coming into the 243 00:13:10,590 --> 00:13:12,360 Michael Thompson: office less than one day a week. 244 00:13:13,470 --> 00:13:16,530 Sean Aylmer: No wonder he mandated it. Wow. So the bank has around 50, 245 00:13:16,530 --> 00:13:20,608 Sean Aylmer: 000 employees and management want them to spend more time 246 00:13:20,610 --> 00:13:23,759 Sean Aylmer: in the office. Common's argument, as he explained on Sydney 247 00:13:23,759 --> 00:13:27,960 Sean Aylmer: Radio Station 2GB yesterday, is that certain types of work 248 00:13:27,960 --> 00:13:31,679 Sean Aylmer: are done more effectively in person. There's greater opportunities for 249 00:13:31,679 --> 00:13:34,200 Sean Aylmer: mentoring and people who are new to the bank are 250 00:13:34,200 --> 00:13:37,890 Sean Aylmer: more successful when they spend more time in the office. 251 00:13:38,250 --> 00:13:42,328 Sean Aylmer: The main reasons given by Commonwealth Bank staff for not coming 252 00:13:42,330 --> 00:13:46,440 Sean Aylmer: into the office are parental duties and the cost of 253 00:13:46,440 --> 00:13:50,280 Sean Aylmer: getting into the office, commuting costs. Anyway, Matt Common wants them back 254 00:13:50,280 --> 00:13:51,810 Sean Aylmer: in there at least 50% of the time. 255 00:13:52,770 --> 00:13:56,699 Michael Thompson: Sean, Trade Minister, Don Farrell says the government will reopen 256 00:13:56,700 --> 00:14:00,150 Michael Thompson: its complaint to the World Trade Organization over China's sanctions 257 00:14:00,150 --> 00:14:03,750 Michael Thompson: on barley if the restrictions are not fully revoked. 258 00:14:04,080 --> 00:14:07,170 Sean Aylmer: Farrell said the Albanese government wants China to comply with 259 00:14:07,170 --> 00:14:09,990 Sean Aylmer: the provisions and the free trade agreement that both countries 260 00:14:09,990 --> 00:14:13,110 Sean Aylmer: have signed. He went on, " If we find ourselves in 261 00:14:13,110 --> 00:14:15,630 Sean Aylmer: a situation where having shown an act of goodwill to 262 00:14:15,630 --> 00:14:19,290 Sean Aylmer: suspend our WTO application and we don't get the result 263 00:14:19,290 --> 00:14:21,389 Sean Aylmer: we want, we have made it clear to the Chinese 264 00:14:21,389 --> 00:14:25,589 Sean Aylmer: government that we will resume that application". Farrell described discussions 265 00:14:25,590 --> 00:14:28,500 Sean Aylmer: with his Chinese counterpart in Detroit last week as warm 266 00:14:28,740 --> 00:14:32,040 Sean Aylmer: and he's hopeful China will make a positive decision after 267 00:14:32,040 --> 00:14:35,219 Sean Aylmer: its review into Australian barley imports. He also said that 268 00:14:35,219 --> 00:14:38,279 Sean Aylmer: the Albanese government is about more trade, not less trade, 269 00:14:38,520 --> 00:14:41,219 Sean Aylmer: and China is our biggest test to stability. 270 00:14:41,820 --> 00:14:45,360 Michael Thompson: The federal government has announced an eight week public consultation 271 00:14:45,360 --> 00:14:49,500 Michael Thompson: period to consider AI regulation. That's its first step in 272 00:14:49,500 --> 00:14:53,460 Michael Thompson: overseeing the growing field since the release of ChatGPT in 273 00:14:53,460 --> 00:14:55,799 Michael Thompson: November last year. It feels like it's been around for 274 00:14:55,799 --> 00:14:58,170 Michael Thompson: a lot longer than that just because so much has 275 00:14:58,170 --> 00:14:59,160 Michael Thompson: happened in that time. 276 00:14:59,309 --> 00:15:02,790 Sean Aylmer: So much and an eight week consultation period. I mean, 277 00:15:03,120 --> 00:15:05,880 Sean Aylmer: it's quite the task really given most of us have 278 00:15:06,180 --> 00:15:09,630 Sean Aylmer: absolutely no clue how AI is going to change the world. 279 00:15:11,040 --> 00:15:14,009 Michael Thompson: So it's essentially an eight week public consultation period that 280 00:15:14,009 --> 00:15:16,920 Michael Thompson: will spend most of its time peering into crystal balls. 281 00:15:18,029 --> 00:15:21,090 Sean Aylmer: Yeah, yeah. I mean, and that's probably being generous. So yesterday 282 00:15:21,090 --> 00:15:25,320 Sean Aylmer: Science Minister, Ed Husic, said Australians need modern laws for 283 00:15:25,320 --> 00:15:29,280 Sean Aylmer: modern technology and he wants experts and the community to 284 00:15:29,280 --> 00:15:33,630 Sean Aylmer: come forward to contribute to what that actually means. Good 285 00:15:33,630 --> 00:15:35,639 Sean Aylmer: intentions there, but I don't think any of us know 286 00:15:35,639 --> 00:15:39,210 Sean Aylmer: what it means. Husic put the potential economic contribution of 287 00:15:39,210 --> 00:15:44,610 Sean Aylmer: AI at between one and $ 4 trillion and the community 288 00:15:44,670 --> 00:15:49,139 Sean Aylmer: needs assurance around how the technology is applied. Look, I 289 00:15:49,139 --> 00:15:50,880 Sean Aylmer: don't think we've got any chance of regulating it at 290 00:15:50,880 --> 00:15:54,089 Sean Aylmer: the moment, but plaudits for actually starting the process. 291 00:15:54,240 --> 00:15:57,900 Michael Thompson: Yeah, it's a good thing to get on board with 292 00:15:57,960 --> 00:16:01,979 Michael Thompson: now rather than trying to stuff the AI genie back 293 00:16:01,980 --> 00:16:02,879 Michael Thompson: into the bottle, huh? 294 00:16:02,940 --> 00:16:06,450 Sean Aylmer: Yes, it would work its way out. You just say, 295 00:16:06,750 --> 00:16:08,880 Sean Aylmer: AI Genie work out how to get out of the bottle. 296 00:16:08,940 --> 00:16:11,999 Michael Thompson: And away you go. Gosh, we're going down some odd 297 00:16:12,000 --> 00:16:15,479 Michael Thompson: places today, Sean. People are moving between capital cities and 298 00:16:15,480 --> 00:16:18,750 Michael Thompson: regions at the highest rate in five years, driven by 299 00:16:18,750 --> 00:16:20,790 Michael Thompson: employment opportunities and industry growth. 300 00:16:21,300 --> 00:16:23,969 Sean Aylmer: More people in the major cities of Sydney and Melbourne 301 00:16:23,969 --> 00:16:26,729 Sean Aylmer: are heading for a life in regional areas, while the 302 00:16:26,730 --> 00:16:29,730 Sean Aylmer: number of people moving from regional areas to the cities 303 00:16:29,730 --> 00:16:33,420 Sean Aylmer: is also at its highest since 2018. The Regional Movers 304 00:16:33,420 --> 00:16:36,450 Sean Aylmer: Index is a partnership between Commonwealth Bank and the Regional 305 00:16:36,600 --> 00:16:39,479 Sean Aylmer: Australia Institute. It looks at trends in people moving around 306 00:16:39,480 --> 00:16:42,509 Sean Aylmer: the country. While people are moving away from Sydney and 307 00:16:42,509 --> 00:16:46,949 Sean Aylmer: Melbourne, Perth and Brisbane are the popular capital city destinations, 308 00:16:46,949 --> 00:16:50,580 Sean Aylmer: at least. Across the board though regional Victoria and tropical 309 00:16:50,580 --> 00:16:54,570 Sean Aylmer: Queensland are the key destinations for Capital City movers. They 310 00:16:54,570 --> 00:16:59,940 Sean Aylmer: account for about 43 and 29% share of net outflows. In contrast, 311 00:16:59,940 --> 00:17:02,369 Sean Aylmer: the number of people moving to regional New South Wales 312 00:17:02,370 --> 00:17:03,210 Sean Aylmer: actually fell. 313 00:17:03,630 --> 00:17:05,908 Michael Thompson: Okay. One last one before we get to international news. 314 00:17:05,910 --> 00:17:09,810 Michael Thompson: If you've ever been frustrated by surge pricing implemented by 315 00:17:10,109 --> 00:17:12,898 Michael Thompson: Uber and others, there's a little bit of good news 316 00:17:12,900 --> 00:17:14,190 Michael Thompson: out of New South Wales, Sean? 317 00:17:14,460 --> 00:17:17,280 Sean Aylmer: Yes. So Uber prices during what they call black swan 318 00:17:17,280 --> 00:17:23,400 Sean Aylmer: events and public transport outages will be artificially suppressed under 319 00:17:23,400 --> 00:17:26,400 Sean Aylmer: an agreement struck by the New South Wales government. According 320 00:17:26,400 --> 00:17:30,000 Sean Aylmer: to The Australian, after successive disruptions to Sydney's rail network 321 00:17:30,000 --> 00:17:34,168 Sean Aylmer: saw Uber prices reach ridiculous heights under the company surge 322 00:17:34,170 --> 00:17:37,320 Sean Aylmer: model. The state government has reached an agreement to limit 323 00:17:37,500 --> 00:17:41,160 Sean Aylmer: prices skyrocketing in the affected areas. In the instance of 324 00:17:41,160 --> 00:17:45,450 Sean Aylmer: public transport network failures, price surging will be capped at 325 00:17:45,450 --> 00:17:49,619 Sean Aylmer: two times prices. In black swan events, terrorist attacks, natural 326 00:17:49,619 --> 00:17:52,740 Sean Aylmer: disasters, stuff like that, price surging would actually remain at 327 00:17:52,740 --> 00:17:56,609 Sean Aylmer: normal rates. Okay, it's not much, but it is a 328 00:17:56,609 --> 00:17:57,330 Sean Aylmer: start, Michael. 329 00:17:57,330 --> 00:17:59,100 Michael Thompson: It is a start. It's progress. 330 00:17:59,369 --> 00:18:00,300 Sean Aylmer: It is progress. 331 00:18:00,720 --> 00:18:03,658 Michael Thompson: All right. International news time now and the Earth has 332 00:18:03,660 --> 00:18:07,260 Michael Thompson: already passed safe limits for humans as temperatures rise, water 333 00:18:07,260 --> 00:18:10,859 Michael Thompson: system disruption and destruction of natural habitats have reached out 334 00:18:10,859 --> 00:18:11,580 Michael Thompson: of boundaries. 335 00:18:12,660 --> 00:18:13,771 Sean Aylmer: Not a good news story, this one. 336 00:18:13,771 --> 00:18:15,661 Michael Thompson: No. It doesn't actually sound very positive, does it? 337 00:18:15,661 --> 00:18:18,329 Sean Aylmer: No, no. Look, a study by a group of the 338 00:18:18,330 --> 00:18:23,070 Sean Aylmer: world's foremost scientists published in the journal Nature, identified eight 339 00:18:23,280 --> 00:18:30,450 Sean Aylmer: earth system boundaries, things like climate, biodiversity, water, ecosystems, land 340 00:18:30,450 --> 00:18:33,749 Sean Aylmer: use, the effects of fertilizers and aerosols, and how they 341 00:18:33,750 --> 00:18:37,740 Sean Aylmer: affect life, according to the Financial Times. Human activities had 342 00:18:37,740 --> 00:18:41,520 Sean Aylmer: pushed seven of these boundaries beyond their safe and just 343 00:18:41,580 --> 00:18:45,119 Sean Aylmer: limit into risk, the zones that indicate a threat to 344 00:18:45,119 --> 00:18:48,418 Sean Aylmer: planetary and human health. It isn't very good, Michael. It 345 00:18:48,420 --> 00:18:51,898 Sean Aylmer: really isn't. Researchers have traditionally focused on the effects of 346 00:18:51,900 --> 00:18:54,869 Sean Aylmer: climate change or biodiversity loss on the planet itself, but 347 00:18:54,869 --> 00:18:57,359 Sean Aylmer: the study from the Earth Commission group of scientists is 348 00:18:57,359 --> 00:19:00,960 Sean Aylmer: an attempt by experts to identify the limits after which 349 00:19:00,960 --> 00:19:05,369 Sean Aylmer: humans will suffer significant harm. Much more whole than just 350 00:19:05,369 --> 00:19:08,849 Sean Aylmer: climate change and biodiversity. Includes things like a lack of access 351 00:19:08,849 --> 00:19:12,090 Sean Aylmer: to clean water, low food security and displacement or loss 352 00:19:12,090 --> 00:19:15,388 Sean Aylmer: of work because of temperature rise or flooding. Anyway, the 353 00:19:15,390 --> 00:19:19,260 Sean Aylmer: upshot is that seven of the eight parameters we seem 354 00:19:19,260 --> 00:19:19,860 Sean Aylmer: to have passed. 355 00:19:20,760 --> 00:19:23,340 Michael Thompson: All right. One last one, Sean. A drinks company owned 356 00:19:23,340 --> 00:19:26,699 Michael Thompson: by Sean Combs, known as Diddy, of course, has sued 357 00:19:26,700 --> 00:19:32,820 Michael Thompson: Diageo for alleged racial discrimination, arguing the global conglomerate has 358 00:19:32,820 --> 00:19:36,300 Michael Thompson: not adequately invested in brands associated with the rapper.' 359 00:19:36,900 --> 00:19:40,259 Sean Aylmer: In court documents filed in New York State and reported 360 00:19:40,260 --> 00:19:43,948 Sean Aylmer: in the Financial Times, the musician's company, Combs Wines and 361 00:19:43,950 --> 00:19:48,359 Sean Aylmer: Spirits, said Diageo has treated Mr. Combs and his brands 362 00:19:48,359 --> 00:19:53,369 Sean Aylmer: worse than others because he's black. The DeLeon tequila brand, co- 363 00:19:53,369 --> 00:19:57,148 Sean Aylmer: owned by the two groups, and Diageo's Ciroc vodka brand in 364 00:19:57,150 --> 00:20:01,319 Sean Aylmer: which it collaborates with Combs, have been typecast and treated 365 00:20:01,320 --> 00:20:05,309 Sean Aylmer: as black brands that should be targeted to urban consumers, 366 00:20:05,340 --> 00:20:09,300 Sean Aylmer: according to the legal suit. Diageo characterized the group's differences 367 00:20:09,300 --> 00:20:12,450 Sean Aylmer: as a business dispute adding that, " We are saddened that 368 00:20:12,450 --> 00:20:15,480 Sean Aylmer: Mr. Combs has chosen to recast this matter as anything 369 00:20:15,570 --> 00:20:19,680 Sean Aylmer: other than that". It said it categorically denied the allegations, 370 00:20:19,740 --> 00:20:24,208 Sean Aylmer: will vigorously defend itself and had a steadfast commitment to 371 00:20:24,270 --> 00:20:28,350 Sean Aylmer: diversity. I think this will be a very interesting case to watch. 372 00:20:28,500 --> 00:20:31,050 Michael Thompson: Yeah, certainly will be. All right. Up next is the 373 00:20:31,050 --> 00:20:33,359 Michael Thompson: Fear and Greed daily interview. Today, Sean, you're speaking with 374 00:20:33,359 --> 00:20:36,269 Michael Thompson: Tim Lawless, head of research at CoreLogic, one of our 375 00:20:36,270 --> 00:20:38,520 Michael Thompson: favorite people when it comes to talking about real estate. 376 00:20:39,000 --> 00:20:42,658 Sean Aylmer: Yes, all about what's happening in house prices and whether 377 00:20:42,720 --> 00:20:44,250 Sean Aylmer: the boom can last. 378 00:20:44,520 --> 00:20:46,170 Michael Thompson: Indeed, it's coming up next in the Fear and Greed 379 00:20:46,170 --> 00:20:50,130 Michael Thompson: playlist on your podcast platform or at fearandgreed.com.au and Sean, 380 00:20:50,130 --> 00:20:52,440 Michael Thompson: two days have now gone past and I have not 381 00:20:52,440 --> 00:20:54,420 Michael Thompson: mentioned How Do They Afford That?, and I should have done 382 00:20:54,420 --> 00:20:54,899 Michael Thompson: that two days ago. 383 00:20:54,930 --> 00:20:55,890 Sean Aylmer: You need to, yeah. 384 00:20:56,250 --> 00:21:00,059 Michael Thompson: Because it was Wednesday two days ago, which is when 385 00:21:00,059 --> 00:21:02,280 Michael Thompson: the new episode came out, and this week's episode, which 386 00:21:02,280 --> 00:21:06,330 Michael Thompson: is our sister podcast, focusing on personal finance. It's actually 387 00:21:06,330 --> 00:21:09,300 Michael Thompson: all about life insurance, which sounds a little bit grim, 388 00:21:09,388 --> 00:21:12,359 Michael Thompson: I know, but it's quite an important topic in terms 389 00:21:12,359 --> 00:21:15,690 Michael Thompson: of figuring out how much you need, who you talk 390 00:21:15,690 --> 00:21:18,150 Michael Thompson: to about it, and the processes that you need to 391 00:21:18,180 --> 00:21:21,300 Michael Thompson: be putting in place. It's an important conversation. Well, worth 392 00:21:21,300 --> 00:21:23,310 Michael Thompson: a listen. You find that one wherever you listen to 393 00:21:23,310 --> 00:21:24,928 Michael Thompson: podcasts. How Do They Afford That? is the name of 394 00:21:24,930 --> 00:21:27,060 Michael Thompson: the show. Sean, thank you very much. 395 00:21:27,388 --> 00:21:28,140 Sean Aylmer: Thank you, Michael. 396 00:21:28,290 --> 00:21:32,250 Michael Thompson: It's Friday, the 2nd of June, 2023. Make sure you're following 397 00:21:32,250 --> 00:21:36,059 Michael Thompson: the podcast. Join us online on LinkedIn, on Instagram and 398 00:21:36,059 --> 00:21:38,458 Michael Thompson: Twitter and Facebook. Stay up to date on all the 399 00:21:38,460 --> 00:21:41,280 Michael Thompson: business news with Alexa and your Amazon Echo Smart speaker 400 00:21:41,280 --> 00:21:43,410 Michael Thompson: as well. Simply say, Alexa, play the Fear and Greed 401 00:21:43,410 --> 00:21:46,050 Michael Thompson: podcast. To catch the latest episode you can grab yours 402 00:21:46,050 --> 00:21:49,228 Michael Thompson: now at Amazon. com. au. I'm Michael Thompson and that 403 00:21:49,230 --> 00:21:50,938 Michael Thompson: was Fear and Greed. Have a great day.