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Speaker 1: This is what the Flux.

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Speaker 2: I'm Brett and I'm Justin and it's Monday, the ninth

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Speaker 2: of February.

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Speaker 1: JUSI boy. They say that third time is lucky, but

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Speaker 1: not for Rio, Tinto and Glencore. You spoke about last

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Speaker 1: week how they were thinking about the merger. Now the

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Speaker 1: companies have abandoned the two hundred and sixty billion dollar

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Speaker 1: merger because the price was not right. You don't even

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Speaker 1: try a fourth time, Rio and Blencourt. Nobody is going

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Speaker 1: to believe you.

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Speaker 2: I'm done. I can't listen to it anymore. Flux. Same

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Speaker 2: if you haven't checked your credit score in twenty twenty

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Speaker 2: six yet, now it would be at the time. Your

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Speaker 2: credit scoll moves every single month based on your loan repayments,

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Speaker 2: based on new applications, and a whole range of other

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Speaker 2: things as well. So if you want to know what

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Speaker 2: the banks can see about you, make sure to check

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Speaker 2: out your credit score in the Flux.

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Speaker 1: Out three massive stories today, juzzy boy, Let's do it

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Speaker 1: for our first. The Australian government is eyeing a major

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Speaker 1: shakeup of the capital gains tax discount and investors might

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Speaker 1: be about to feel the pain.

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Speaker 2: Property investors you may want to sit down for this one,

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Speaker 2: so tell me more.

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Speaker 1: So some background, juzzy boy. Capital gains tax or is

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Speaker 1: the tax you pay on profits from selling assets.

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Speaker 2: Think shares, think investment properties, or any asset that you

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Speaker 2: have that's gone up in value.

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Speaker 1: And since nineteen ninety nine, investors have received a flat

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Speaker 1: fifty percent discount on any gain as long as they

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Speaker 1: held the asset for more than twelve months.

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Speaker 2: But now, be man, the federal government's confirmed it's looking

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Speaker 2: at changes to the CGT discount ahead of the May budget.

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Speaker 1: And while nothing is locked in yet, investors are starting

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Speaker 1: to kind of panic.

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Speaker 2: Yep. So what are the governments proposing to change is

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Speaker 2: fifty percent discount too?

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Speaker 1: Well, there are quite a few options that have been flat,

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Speaker 1: like cutting the fifty percent discount to a thirty three percent.

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Speaker 2: Or even cutting the discount altogether.

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Speaker 1: The reason for the change, you ask, Well, the government

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Speaker 1: claims that it would make housing more affordable, But the.

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Speaker 2: Big question is would it actually contribute to more housing

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Speaker 2: affordability as the government promises?

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Speaker 1: Good question, So what's the key learning here?

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Speaker 2: CGT reform might take a bit of heat out of prices,

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Speaker 2: but it doesn't solve the housing crisis you see.

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Speaker 1: Winding back the capital gains tax discount is often framed

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Speaker 1: as a housing affordability silver bullet.

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Speaker 2: The idea is if it's less appealing for property investors,

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Speaker 2: then it gives more access to owner occupies into the market.

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Speaker 2: The most evidence suggests the impact on prices would be

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Speaker 2: pretty immaterial.

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Speaker 1: According to modeling by economist Chris Richardson, reducing the CGT

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Speaker 1: discount with likely lower house prices by somewhere in the

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Speaker 1: range of one to four percent.

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Speaker 2: For context, the median house price in Australia has increased

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Speaker 2: by over thirty nine percent nationally over the last five years.

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Speaker 2: Alo On the other.

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Speaker 1: Hand, the government reckons it's losing twenty three billion dollars

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Speaker 1: a year in taxes via the capital gains tax discount, or.

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Speaker 2: Nearly two hundred and fifty bill over the next ten years.

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Speaker 1: So it seems like these changes may add more lad

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Speaker 1: to the government's bank account, but may not solve the

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Speaker 1: housing affordability problem.

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Speaker 2: For our second story, at Lassians share price fell five

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Speaker 2: percent despite double digit growth in revenue, because investors are

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Speaker 2: worried that AI will eat its entire business up for breakfast.

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Speaker 2: Very nervous time for all that Lassian jazzy boy, what's

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Speaker 2: the story here? Okay? So Lassian, of course, is the

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Speaker 2: Ossie founded software company behind tools like Gira and Confluence.

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Speaker 1: And more recently behind Trello, the browser company as well

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Speaker 1: and Loom, all of which it acquired over the last

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Speaker 1: nine years.

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Speaker 2: The goal of all of it Lassian stalls is to

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Speaker 2: help teams plan and track and collaborate on big work projects.

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Speaker 1: Yeah. At Lastian posted a pretty solid quarter of growth,

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Speaker 1: but the markets did not agree. Yeah, their revenue rows

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Speaker 1: twenty three percent year on year to one point six

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Speaker 1: billion US dollars, and they also lifted their full year

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Speaker 1: revenue guidance. Despite all that, the market was not convinced.

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Speaker 1: Shares slid about five percent last week.

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Speaker 2: And why was that?

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Speaker 1: Well, many vessels are very worried that AI could eat

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Speaker 1: into traditional software businesses and be.

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Speaker 2: Man when you zoom out. At Lastian's had a pretty

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Speaker 2: tough year. It shares it down nearly seventy percent over

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Speaker 2: the past twelve months.

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Speaker 1: So to show some confidence, the founders have paused their

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Speaker 1: long running share sale plans.

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Speaker 2: But that doesn't help their employees, whose employee shares are

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Speaker 2: really out of the money.

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Speaker 1: At the moment, So what's the key learning here?

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Speaker 2: Equity looks generous when a stock is flying, but it

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Speaker 2: can be pretty brutal when it's not.

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Speaker 1: In the tech industry, a chunk of employee pay is

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Speaker 1: sometimes delivered through shares or options instead of cash.

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Speaker 2: The trade off is simple. As an employee, you receive

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Speaker 2: a lower salary today, but potentially bigger upside in the

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Speaker 2: future through equity.

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Speaker 1: Let's say employees anti share options with a strike price

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Speaker 1: of one hundred and fifty bucks. That means they only

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Speaker 1: start making money if the share price rises above one

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Speaker 1: hundred and fifty bucks.

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Speaker 2: So if the shares are trading at ninety five dollars,

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Speaker 2: those options are out of the money.

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Speaker 1: You'd be paying one hundred and fifty bucks for something

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Speaker 1: worth ninety five bucks on the market.

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Speaker 2: Now, if you flip it and the shares rise to

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Speaker 2: two hundred bucks, those same options suddenly have real value.

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Speaker 1: But that only works if the share price rises above

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Speaker 1: the options strike price.

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Speaker 2: So when employees' shares are no longer in the money,

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Speaker 2: the equity is worth little or nothing, and it means

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Speaker 2: they've given up bigger pay packets for nothing and be man.

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Speaker 2: This can really hurt employee morale and can make employee

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Speaker 2: attention harder as well. So without Lassian shares down seventy

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Speaker 2: percent over the past year, it means that employees who

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Speaker 2: traded cash salaries for equity are really feeling the pain.

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Speaker 1: For our third and final story, KPMG in Australia is

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Speaker 1: planning to outsource three quarters of its executive assistant positions overseas.

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Speaker 1: Be man no surprises, as we've seen other consulting firms

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Speaker 1: do it as well. So what is the story here.

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Speaker 1: So KPMG is considered one of the big four consulting

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Speaker 1: firms next to PwC, Deloitte and Ey.

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Speaker 2: They've got over nine thousandmployees working across one hundred and

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Speaker 2: thirty eight countries.

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Speaker 1: That is quite a lot of people.

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Speaker 2: Yeah, but last year the Australian government cut funding for

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Speaker 2: public service consulting and KPMG Australia got hit hat.

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Speaker 1: Instead of bringing in over three hundred million bucks like

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Speaker 1: previous years, KPMG took in a much more humble one

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Speaker 1: hundred and six million dollars.

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Speaker 2: But here's a kicker. More clients are also expecting consultants

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Speaker 2: to use AI and even charge less for their work.

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Speaker 1: So KPMG is really filling the squeeze from all sides.

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Speaker 2: In fact, they reported a twenty per cent drop in

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Speaker 2: their advisory business revenue the last financial year.

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Speaker 1: So now KPMG has made the call to move two

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Speaker 1: hundred executive assistant jobs about two thirds of their current

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Speaker 1: EA roles to the Philippines where average.

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Speaker 2: Rages are much lower compared to Australia, and.

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Speaker 1: They reckon this move will save them about seventeen million

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Speaker 1: dollars in annual salaries.

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Speaker 2: So what is the key learning here?

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Speaker 1: In industries like consulting and services generally, where business models

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Speaker 1: and near identical competition tends to get dialed way up.

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Speaker 2: In Australia alone, the big four aren't just competing against

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Speaker 2: each other, they're fighting for work with three thousand, four

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Speaker 2: hundred consulting firms, so there's constant pressure to improve price

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Speaker 2: margins and services deliverability.

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Speaker 1: Get this one. Almost ten years ago, KPMG's competitor EY

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Speaker 1: made the move to work with offshore executive assistance.

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Speaker 2: So when they see it working for EY, the savings

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Speaker 2: go from a nice to have to why haven't we

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Speaker 2: done this yet?

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Speaker 1: Especially when stakeholders are knocking on boardroom doors of demanding

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Speaker 1: cost cuts.

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Speaker 2: Flux am, did your credits go go up this month?

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Speaker 2: Did you go down this month? Or did it not

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Speaker 2: move well? You can find it all out in the

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Speaker 2: Flux app where we can show you what the banks

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Speaker 2: see about you. Because if you want to know more

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Speaker 2: about your credits, will make sure to download the Flex

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Speaker 2: app and check it out.

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Speaker 1: Thanks for listening and we'll see you on or Wednesday