1 00:00:05,080 --> 00:00:08,440 Speaker 1: This is what the Flux I'm bred justin ads Wednesday, 2 00:00:08,520 --> 00:00:09,840 Speaker 1: the tenth of September. 3 00:00:09,480 --> 00:00:12,080 Speaker 2: Does avoid the Future Fund, Australia's sovereign wealth fund. There's 4 00:00:12,119 --> 00:00:14,160 Speaker 2: top two hundred and fifty billion dollars for the very 5 00:00:14,200 --> 00:00:16,280 Speaker 2: first time thanks to it for more than twelve percent 6 00:00:16,360 --> 00:00:19,520 Speaker 2: return over the last financial year. And this return is 7 00:00:19,560 --> 00:00:22,400 Speaker 2: even better than the median return of super funds over 8 00:00:22,440 --> 00:00:23,279 Speaker 2: the same period. 9 00:00:23,320 --> 00:00:26,160 Speaker 1: Get my super money in there, xam. There is less 10 00:00:26,160 --> 00:00:29,000 Speaker 1: than fifty days until your tax return needs to be submitted. 11 00:00:29,160 --> 00:00:31,480 Speaker 1: If you're submitted via my gad. If you're so confused 12 00:00:31,520 --> 00:00:33,080 Speaker 1: you don't even know where to start, that's where the 13 00:00:33,120 --> 00:00:35,520 Speaker 1: Flux Academy comes in. This month. It's called the FI 14 00:00:35,560 --> 00:00:39,080 Speaker 1: twenty five Tax Toolkit and covers everything from Medicare levees 15 00:00:39,159 --> 00:00:41,640 Speaker 1: to working from home tax deductions and how to submit 16 00:00:41,680 --> 00:00:43,400 Speaker 1: it onlines. If you want to learn more about how 17 00:00:43,400 --> 00:00:45,280 Speaker 1: to get your tax return done, make sure you download 18 00:00:45,280 --> 00:00:47,360 Speaker 1: the Flux app and check out the academy. 19 00:00:47,000 --> 00:00:50,199 Speaker 2: Three lethal stories today jus boy, wooh, let's do it 20 00:00:50,240 --> 00:00:53,800 Speaker 2: for our first. A and Z Bank is cutting four thousand, 21 00:00:53,920 --> 00:00:57,120 Speaker 2: five hundred jobs and scaling back consultants in a five 22 00:00:57,200 --> 00:01:03,000 Speaker 2: hundred and sixty million dollar restructure under its spanking new ceoey. 23 00:01:02,120 --> 00:01:04,600 Speaker 1: Up to ten percent of the workforce. It just gone like. 24 00:01:04,600 --> 00:01:06,720 Speaker 2: That, tell me all okay. So A and Z is 25 00:01:06,800 --> 00:01:10,120 Speaker 2: one of Australia's Big Four alongside CBA, NAB and Westpac. 26 00:01:10,280 --> 00:01:12,440 Speaker 1: He's a fun FACTVB Man A and Z actually has 27 00:01:12,480 --> 00:01:15,560 Speaker 1: a larger global workforce than both NAB and west Pack 28 00:01:15,720 --> 00:01:19,039 Speaker 1: despite being the smallest of the four. Not for long though, 29 00:01:19,560 --> 00:01:22,759 Speaker 1: ain Z's new CEO, Nunomatos, who started in May, has 30 00:01:22,760 --> 00:01:25,640 Speaker 1: begun to swing the acts yeap. He's now announced three 31 00:01:25,680 --> 00:01:29,360 Speaker 1: thy five hundred redundancies of ANZED staff by next September. 32 00:01:29,360 --> 00:01:31,280 Speaker 1: And on top of this, an ZED will also cut 33 00:01:31,319 --> 00:01:34,760 Speaker 1: ties with a thousand consultants and contractors. 34 00:01:34,200 --> 00:01:37,640 Speaker 2: And it will affect teams in technology, procurement, risk and retail. 35 00:01:37,680 --> 00:01:39,960 Speaker 1: The man. Here's the twist. These job cuts are just 36 00:01:40,000 --> 00:01:42,840 Speaker 1: for now because ANZ promised to maintain its head count 37 00:01:42,840 --> 00:01:43,800 Speaker 1: by twenty twenty seven. 38 00:01:43,840 --> 00:01:45,600 Speaker 2: That was a commitment it made as part of its 39 00:01:45,640 --> 00:01:47,039 Speaker 2: acquisition of Suncot Bank. 40 00:01:47,120 --> 00:01:49,280 Speaker 1: So now it effectively allows A and Z to cut 41 00:01:49,360 --> 00:01:51,240 Speaker 1: jobs in the short term, so long as the number 42 00:01:51,240 --> 00:01:54,040 Speaker 1: of staff are re hired by twenty twenty seven and Jazi. 43 00:01:53,880 --> 00:01:56,400 Speaker 2: Boy, this is all part of an Z's plan to 44 00:01:56,480 --> 00:01:59,000 Speaker 2: improve its cost to income ratio. 45 00:01:59,440 --> 00:02:00,840 Speaker 1: So what the key learning here. 46 00:02:00,920 --> 00:02:03,480 Speaker 2: One of the most closely watched metrics in banking is 47 00:02:03,520 --> 00:02:06,840 Speaker 2: the cost to income ratio, also known as an efficiency ratio. 48 00:02:06,960 --> 00:02:08,960 Speaker 1: It measures how much a bank spends to earn a 49 00:02:09,080 --> 00:02:09,960 Speaker 1: dollar of revenue. 50 00:02:10,000 --> 00:02:12,520 Speaker 2: The lower the ratio, more efficiently the bank is operating. 51 00:02:12,560 --> 00:02:15,919 Speaker 1: For example, AMZ spens roughly fifty two cents in costs 52 00:02:15,960 --> 00:02:18,080 Speaker 1: to generate one dollar of inco, so its cost to 53 00:02:18,120 --> 00:02:19,920 Speaker 1: income ratio is fifty two percent. 54 00:02:19,680 --> 00:02:22,919 Speaker 2: Whereas Combank's cost to income ratio is about forty nine percent. 55 00:02:22,960 --> 00:02:25,160 Speaker 1: And it's believe that Westpac and nabs cost to income 56 00:02:25,240 --> 00:02:27,320 Speaker 1: ratio is even lower than combat. 57 00:02:27,000 --> 00:02:30,160 Speaker 2: So, Jazi Boy, jobcuts and a reduced reliance on consultants 58 00:02:30,200 --> 00:02:33,080 Speaker 2: will help lower costs and improve this ratio. 59 00:02:32,800 --> 00:02:34,720 Speaker 1: And the man cutting costs is one of the clearest 60 00:02:34,760 --> 00:02:37,400 Speaker 1: ways to lift returns as long as it doesn't also 61 00:02:37,560 --> 00:02:40,320 Speaker 1: hit sales, given up to ten percent of its workforce 62 00:02:40,320 --> 00:02:42,720 Speaker 1: will be cut now. Interestingly, be Man, Amz's new CEO 63 00:02:42,760 --> 00:02:45,040 Speaker 1: has been known to enter a new business or business 64 00:02:45,040 --> 00:02:46,839 Speaker 1: division and cut immediately. 65 00:02:47,000 --> 00:02:49,920 Speaker 2: Yes, he did this at HSBC in Mexico where he 66 00:02:50,000 --> 00:02:51,760 Speaker 2: used to work, as well as when he moved to 67 00:02:51,880 --> 00:02:52,880 Speaker 2: HSBC in Europe. 68 00:02:52,880 --> 00:02:55,360 Speaker 1: And now he's taking the cost cutting playbook and bring 69 00:02:55,360 --> 00:02:56,000 Speaker 1: it to Anz. 70 00:02:56,760 --> 00:02:59,760 Speaker 2: For our second story, Coals and Woolies are facing a 71 00:02:59,800 --> 00:03:02,480 Speaker 2: bit billion dollar bill after a court ruled on its 72 00:03:02,520 --> 00:03:03,760 Speaker 2: staff under payments. 73 00:03:03,880 --> 00:03:06,920 Speaker 1: Jeez, it turns out paying people properly isn't optional, be man. 74 00:03:07,040 --> 00:03:09,760 Speaker 2: So we all okay? So Coles and Woworth's Australia's two 75 00:03:09,840 --> 00:03:12,800 Speaker 2: supmarket giants, making up more than sixty five percent of 76 00:03:13,000 --> 00:03:14,799 Speaker 2: all of the grocery market, and. 77 00:03:14,720 --> 00:03:17,960 Speaker 1: Willworth's is actually Australia's biggest private employer, with over two 78 00:03:18,040 --> 00:03:19,760 Speaker 1: hundred thousand staff on its books. 79 00:03:19,760 --> 00:03:22,760 Speaker 2: But juzz boy. Last Friday, the Federal Court ruled against 80 00:03:22,800 --> 00:03:25,639 Speaker 2: the way that both companies structured annual salaries and. 81 00:03:25,600 --> 00:03:28,919 Speaker 1: This impacted nearly thirty thousand employees across the businesses. 82 00:03:29,080 --> 00:03:31,079 Speaker 2: Alrighty, so what exactly did they do? 83 00:03:31,320 --> 00:03:34,000 Speaker 1: They were both using the set off approach? All right? 84 00:03:34,040 --> 00:03:34,360 Speaker 2: What's that? 85 00:03:34,520 --> 00:03:36,800 Speaker 1: Well, with the set off approach, employees have paid one 86 00:03:36,960 --> 00:03:39,800 Speaker 1: salaried sum. It's meant to cover all of their entitlements 87 00:03:39,880 --> 00:03:41,000 Speaker 1: under the modern. 88 00:03:40,720 --> 00:03:43,560 Speaker 2: Awards, including overtime pay. And penalty rates, but the. 89 00:03:43,480 --> 00:03:46,240 Speaker 1: Court ruled that these arrangements didn't actually keep track of 90 00:03:46,360 --> 00:03:49,800 Speaker 1: all the employee entitlements and staff were therefore underpaid for 91 00:03:49,840 --> 00:03:51,000 Speaker 1: a number of years. 92 00:03:51,360 --> 00:03:54,400 Speaker 2: And Woolly's warned that the potential extra costs could top 93 00:03:54,520 --> 00:03:57,800 Speaker 2: five hundred million bucks. After Taos and Coal's estimated around 94 00:03:57,840 --> 00:04:00,760 Speaker 2: two hundred and fifty mil and Juzie Boy combined repayments 95 00:04:00,760 --> 00:04:03,520 Speaker 2: already made, the scandal could cost north of one billion 96 00:04:03,520 --> 00:04:04,160 Speaker 2: dollars in total. 97 00:04:04,200 --> 00:04:06,320 Speaker 1: Well, while is what I'd like to say, So what 98 00:04:06,520 --> 00:04:07,360 Speaker 1: is the key learning here? 99 00:04:07,480 --> 00:04:11,040 Speaker 2: Compliance may not be as exciting as half priced tymtams, 100 00:04:11,080 --> 00:04:13,360 Speaker 2: but getting it wrong is seriously costly. 101 00:04:13,400 --> 00:04:16,760 Speaker 1: In this case, loose payroll processes and record keeping failures 102 00:04:16,760 --> 00:04:19,080 Speaker 1: have turned into a billion dollar liability. 103 00:04:19,160 --> 00:04:22,160 Speaker 2: And the true cost of non compliance isn't just the repayments. 104 00:04:22,200 --> 00:04:24,720 Speaker 1: Now We're talking a heap of dough in legal fees. 105 00:04:24,560 --> 00:04:28,840 Speaker 2: And regulatory scrutiny. Don't forget interest, superannuation, back pay and 106 00:04:28,960 --> 00:04:31,440 Speaker 2: payroll tax, as well as well as the distraction of 107 00:04:31,480 --> 00:04:32,719 Speaker 2: management time and be man. 108 00:04:32,760 --> 00:04:36,240 Speaker 1: There's no doubt that retail industry awards are very, very complicated. 109 00:04:36,279 --> 00:04:38,920 Speaker 2: It is The Retail Industry Award has nine and ninety 110 00:04:38,960 --> 00:04:41,840 Speaker 2: four different pay rates across almost one hundred pages. 111 00:04:42,160 --> 00:04:43,919 Speaker 1: But that doesn't mean it should be put in the 112 00:04:43,920 --> 00:04:45,120 Speaker 1: two hard basket. 113 00:04:44,839 --> 00:04:47,520 Speaker 2: Now for boards, the lesson is clear. Treat compliance like 114 00:04:47,560 --> 00:04:48,520 Speaker 2: your milk and bread. 115 00:04:48,600 --> 00:04:50,440 Speaker 1: It's not optional, it is essential. 116 00:04:50,520 --> 00:04:53,039 Speaker 2: Otherwise you risk a very expensive cost at the checkout. 117 00:04:53,600 --> 00:04:56,839 Speaker 1: For our third and final story, cash rewards, the Australian 118 00:04:56,839 --> 00:05:00,000 Speaker 1: cash back platform has announced plans to shut down immediately 119 00:05:00,200 --> 00:05:02,000 Speaker 1: after eleven years. 120 00:05:01,680 --> 00:05:04,120 Speaker 2: Two and a half million dollarses need to cash out pronto. 121 00:05:04,400 --> 00:05:05,200 Speaker 2: Tell me what's going on? 122 00:05:05,240 --> 00:05:07,600 Speaker 1: Okay, So cash Rewards found it in twenty fourteen as 123 00:05:07,600 --> 00:05:09,560 Speaker 1: a way to give Ozzie's cash back when they shopped 124 00:05:09,560 --> 00:05:10,960 Speaker 1: at retailers across Australia. 125 00:05:11,040 --> 00:05:13,520 Speaker 2: We're talking brands like apple Meyer and Added Ass. 126 00:05:13,560 --> 00:05:16,240 Speaker 1: This that works. Retailers pay cash rewards a commission, and 127 00:05:16,360 --> 00:05:19,080 Speaker 1: cash rewards then passes a slice of that commission. That's 128 00:05:19,160 --> 00:05:20,279 Speaker 1: the shopper and Juzieboy. 129 00:05:20,279 --> 00:05:23,919 Speaker 2: These cash backs range anywhere from two percent of a 130 00:05:23,960 --> 00:05:26,080 Speaker 2: purchase price to sometimes even twenty percent. 131 00:05:26,120 --> 00:05:28,200 Speaker 1: Now a man in December twenty twenty, in the midst 132 00:05:28,240 --> 00:05:30,640 Speaker 1: of the COVID spending spree, cash rewards listed on the 133 00:05:30,680 --> 00:05:33,080 Speaker 1: ASX at a value of around one hundred and thirty 134 00:05:33,080 --> 00:05:34,080 Speaker 1: million dollars. 135 00:05:33,880 --> 00:05:36,000 Speaker 2: But Jazze boy, it didn't last long. By jan twenty 136 00:05:36,040 --> 00:05:39,720 Speaker 2: twenty two, Anz's venture took Cash Rewards private at a 137 00:05:39,760 --> 00:05:41,960 Speaker 2: thirty five percent discount to its IPO price. 138 00:05:42,080 --> 00:05:44,080 Speaker 1: The Maan Cash Roads was big. At its peak, it 139 00:05:44,120 --> 00:05:46,200 Speaker 1: had over two and a half million members and returned 140 00:05:46,200 --> 00:05:48,719 Speaker 1: to one hundred and sixty five million bucks in cash back. 141 00:05:48,800 --> 00:05:50,960 Speaker 2: But now Cash Awards has announced it will shut down 142 00:05:51,000 --> 00:05:54,040 Speaker 2: immediately as A and Z does a cleanup of its business. 143 00:05:54,279 --> 00:05:57,039 Speaker 1: Despite spending nearly one hundred million dollars in total to 144 00:05:57,040 --> 00:05:59,479 Speaker 1: acquire the Cash Rewards business, it hadn't quite met A 145 00:05:59,520 --> 00:06:00,720 Speaker 1: and z's expectations. 146 00:06:00,920 --> 00:06:04,880 Speaker 2: So Anz's corporate VCM eighteen thirty five I has announced 147 00:06:04,920 --> 00:06:06,599 Speaker 2: plans to close it down immediately. 148 00:06:06,720 --> 00:06:08,080 Speaker 1: So what is the key learning here? 149 00:06:08,200 --> 00:06:11,080 Speaker 2: Corporate venture capital is when big companies set up investment 150 00:06:11,200 --> 00:06:13,520 Speaker 2: arms to back startups and emerging businesses. 151 00:06:13,560 --> 00:06:15,720 Speaker 1: The idea is kind of two fold. There's a financial 152 00:06:15,760 --> 00:06:18,000 Speaker 1: return as well as a strategic alignment. 153 00:06:18,080 --> 00:06:20,920 Speaker 2: For ANZ, its venture arm was created in twenty eighteen 154 00:06:21,000 --> 00:06:23,520 Speaker 2: to fend off fintech disruptors. 155 00:06:23,040 --> 00:06:25,320 Speaker 1: And by investing in them, it meant AMZ could learn 156 00:06:25,360 --> 00:06:28,320 Speaker 1: from them and sometimes even integrate them into the larger 157 00:06:28,320 --> 00:06:32,040 Speaker 1: an Z business. But unlike independent vcs, corporate vcs often 158 00:06:32,160 --> 00:06:35,200 Speaker 1: rise and fall with the priorities of the larger company. 159 00:06:35,279 --> 00:06:38,080 Speaker 2: So while corporate vcs can open doors, it's also tied 160 00:06:38,120 --> 00:06:40,400 Speaker 2: to the whims of corporate boardrooms, and. 161 00:06:40,400 --> 00:06:42,440 Speaker 1: In this case, the whim of the CEO was to 162 00:06:42,480 --> 00:06:45,159 Speaker 1: shut it down immediately without even looking for a buyer. 163 00:06:45,240 --> 00:06:47,919 Speaker 1: Flux am the time is ticking and the ATO is 164 00:06:48,040 --> 00:06:51,520 Speaker 1: waiting for your tax return before October thirty first this year, 165 00:06:51,560 --> 00:06:52,920 Speaker 1: so if you want to learn more, may shut it, 166 00:06:52,920 --> 00:06:55,120 Speaker 1: download the Flux app and check out the academy this month. 167 00:06:55,160 --> 00:06:57,520 Speaker 2: Thanks for listening and we'll see you on Friday.