Speaker 1: This is Business Now with Edward Boyd him Welcome to
Speaker 1: Business Now, thanks to your company today. I'm Edward Boyd.
Speaker 1: It is not Ross Greenwood. Coming up on the program.
Speaker 1: As gegopolitical tensions increase around the world, the Australian government
Speaker 1: is being encouraged to step up its level of spending
Speaker 1: on defense. Former Shark Tank judge and venture capitalist Steve
Speaker 1: Baxter will join us shortly. Retail billionaire Brett Blundy has
Speaker 1: launched a new sleep where lingerie and beauty label called Liaise.
Speaker 1: We'll speak the CEO Linda Whitehead, who formerly ran the
Speaker 1: fashion label JJ's. Plus. Australia's farmers are heading towards a
Speaker 1: record high winter crop planting this season, despite the recent
Speaker 1: flooding on the East Coast. Rabobanks Stefan Vogel will talk
Speaker 1: grains and beef. That's all coming up on today's program.
Speaker 1: Other stories today you should know about. An American trade
Speaker 1: court has ruled President Trump did not have the authority
Speaker 1: to impose sweeping tariffs on virtually every nation on Earth,
Speaker 1: voiding the levees which have sparked a global trade war
Speaker 1: and caused chaos on financial markets. The US Court of
Speaker 1: International Trade found that the President overstepped his authority when
Speaker 1: he announced these tariffs earlier this year. The Court said
Speaker 1: Congress is responsible for regulating America's commerce with other countries
Speaker 1: and that cannot be overridden by the president's use of
Speaker 1: emergency powers. The Court has invalidated with immediate effect, all
Speaker 1: of Trump's orders on tariff since January that were rooted
Speaker 1: in the International Emergency Economic Powers Act, a law that
Speaker 1: was meant to address unusual and extraordinary threats during a
Speaker 1: national emergency. Lawyers for the Trump administration have notified the
Speaker 1: Court that they will lodge and appeal well. The debt
Speaker 1: riddled Tasmania government has handed down at state budget promising
Speaker 1: a pathway to surplus over the next five years. Aspen
Speaker 1: Bomfield joins US Live in Hobart, Aspen. What's the government's spin?
Speaker 2: Yeah, thanks, Ed Treasurer Guy Barnett is trying to paint
Speaker 2: a positive picture. In this year's state budget. A one
Speaker 2: billion dollar deficit is forecast for the next financial year,
Speaker 2: a surplus not expected until twenty twenty nine. Netdebt is
Speaker 2: a completely different story altogether. It's currently sitting at five
Speaker 2: point two billion dollars and it's expected to double over
Speaker 2: the next five years, following construction of that nine hundred
Speaker 2: and forty five million dollar stadium at mcquarie Point. Now
Speaker 2: you might remember that stadium is crucial to the state's
Speaker 2: inaugural AFL team. No stadium, no Tasmanian devils. Today, the
Speaker 2: treasurer it suggested an Elon Musk style review of public
Speaker 2: servants in a bid to balance those books.
Speaker 3: We've been working on this journey now for some time.
Speaker 4: The importance of efficiency and productivity in our state service.
Speaker 3: We will be.
Speaker 4: Reviewing every government program, every governments s and is it
Speaker 4: to fit for purpose?
Speaker 3: Doesn't need to be reviewed? Is it still necessary? And
Speaker 3: these are the questions that need to be asked.
Speaker 1: Now.
Speaker 2: Earlier this year there was also talk about selling off
Speaker 2: state government owned assets. This budget rules out selling off
Speaker 2: Hydro Tasmania and the Port Arthur Historical Site. However, the
Speaker 2: sale of the state run bus company and local port
Speaker 2: Authority remain on the cards. Elsewhere, every Tasmanian household will
Speaker 2: receive sixty dollars for their energy bills and half priced
Speaker 2: bus fares will also continue for students and those in
Speaker 2: regional areas. So today's budget is great news if you're
Speaker 2: a football loving Tasmanian. Bit of a mixed bag for
Speaker 2: everyone else.
Speaker 1: Great, thanks Aspen there in Hobart for us. Let's get
Speaker 1: across today's market moves with Ingrid Willage and Ingrid think
Speaker 1: the rally in US futures help the market today.
Speaker 5: We had us all day ed, but it could have
Speaker 5: been better given what we saw from US features rallying,
Speaker 5: thanks video reporting a boost in its first court of sales,
Speaker 5: Chip Make and a video giving a positive revenue.
Speaker 1: Forecast for the current period.
Speaker 5: That's even despite a slowdown in China.
Speaker 1: In fact, sales.
Speaker 5: Expected to be up about forty five billion US dollars
Speaker 5: in the second quarter, including about eight billion in revenue
Speaker 5: lost from China. That includes, of course that number so
Speaker 5: not a huge impact as well from the federal court
Speaker 5: ruling the US reciprocal tariffs illegal you mentioned before, And
Speaker 5: though the oil price did rally a little on the
Speaker 5: news and the Aussie dollar dipped off the strength in
Speaker 5: the green back. That being said, Australian share market and
Speaker 5: in the session you can see they're up just two
Speaker 5: tenths of a percent. Looking at some of the best
Speaker 5: performers on the market today and the tech Plaze did
Speaker 5: get a nice boost from the video with app and
Speaker 5: closing you can see there up about four percent.
Speaker 1: You can also see Woodside.
Speaker 5: Adding to its games from yesterday off the back of
Speaker 5: that draft government approval to extend the life of its
Speaker 5: Northwest shelf development. That stock you can see they're up
Speaker 5: about three percent, and also Magellan closing the session up
Speaker 5: about one point seven percent on the side the worst
Speaker 5: performance today, and gold stocks did take a fall as
Speaker 5: in investors took profits on the precious metal. Resolute was
Speaker 5: off by about three point two about two point four
Speaker 5: percent by the end of the session by Settlember. That's
Speaker 5: also thanks to some reports the number of its permits
Speaker 5: may be revoked in Guinea, the company coming out saying
Speaker 5: it's seeking further information on that before it responds properly.
Speaker 5: Web Travel also off at the end of the session,
Speaker 5: down by about one point seven percent, but that was
Speaker 5: after a twelve percent rally yesterday and even an upgrade
Speaker 5: by McCrory investors likely taking a little bit of profits
Speaker 5: on that one, and miners helping put a lid on
Speaker 5: markets today. Rio was off by about seven ten percent,
Speaker 5: off the lows of the day though and back.
Speaker 1: To you thanks ingrid, Camera based think tank, the Australian
Speaker 1: Strategic Policy Institute released the detailed report today into our
Speaker 1: defense sector, calling on the federal government to lift its spending.
Speaker 1: The report asks whether our defense force is strong enough
Speaker 1: to act as a deterrent from adversaries like China, which
Speaker 1: recently conducted live fire drills in the Tasman Sea. So
Speaker 1: do we need to lift our spending? Joining me now
Speaker 1: is Steve Baxter, the founder of defense technology investment firm
Speaker 1: in Zone Venture Partners. Steve, thanks for your time. I mean,
Speaker 1: how does Australia's spending on defense stack up against other nations?
Speaker 4: Agod I ed and thanks for having me on Australias
Speaker 4: spending on defenses measured against GDP as many nations are.
Speaker 4: To put this in context, nations such as the US
Speaker 4: are about three and a half percent of spending on
Speaker 4: defense versus GDP. Holand for example, is approaching five. We
Speaker 4: are at two percent spending, so we are quite below
Speaker 4: par when it comes to that. And to your opening statement,
Speaker 4: you know, it would be very hard for us to
Speaker 4: act as.
Speaker 3: A deterrent to China in any respect.
Speaker 4: We've always bought alongside and had the cooperation of larger allies.
Speaker 4: You know, world War two and pre World War two
Speaker 4: it was it was the UK, it was England and
Speaker 4: World War two, and post it's been in the US.
Speaker 4: So we have to be a we have to be
Speaker 4: a good ally in that deterrence and to do that
Speaker 4: we need to spend.
Speaker 1: Obviously we've got the Orcus pack with some of our
Speaker 1: big allies, including the US. But is the big adversary
Speaker 1: on that regional threat front? Is it coming from China?
Speaker 1: Are they the main one Australian defense force is probably
Speaker 1: worried about.
Speaker 3: They're the only one they're worried about.
Speaker 1: Well, you're an investor in defense technologies. I mean, how
Speaker 1: do we encourage more of the private sector as well
Speaker 1: to start investing money in our defense sector because it
Speaker 1: can't all just come from the public, from the public
Speaker 1: sector and the federal budget.
Speaker 4: No, I agree, and I think that the way you
Speaker 4: actually invest in the defense sectors. Understand that the Australian
Speaker 4: defense markets exceptionally small. We're beaten zone. We look at
Speaker 4: what we call the allied market and the aload market
Speaker 4: is roughly fifty nations that we could sell defense goods
Speaker 4: to it and not breach laws in Australia, so funtry
Speaker 4: we have defense cooperation with that. Combined market in US
Speaker 4: dollar terms is one point seven trillion dollars and an
Speaker 4: average spend of two percent of GDP. Now, the Australian
Speaker 4: defense budget is thirty five billion US dollars. Now, when
Speaker 4: you consider the rest of the world, NATO has just
Speaker 4: come out. Mark Router came out two weeks ago head
Speaker 4: of NATO and said they are heading towards five.
Speaker 3: Percent of GDP as is the US.
Speaker 4: So that one point seven trillium will grow to probably
Speaker 4: well over three.
Speaker 3: And that's the market.
Speaker 4: So the opportunity here is not just Australia, but it's
Speaker 4: a growing allied market that are seeing a rising demand
Speaker 4: for the goods and services it needs to conduct its business.
Speaker 1: And are there many defense technology companies in Australia? Are
Speaker 1: there many innovative businesses out there in the defense space
Speaker 1: that people can invest in?
Speaker 4: There are looking at the top end. I suppose we
Speaker 4: have some listed companies which are great. You might look
Speaker 4: at Ostel, you might look at the prone Shield for example,
Speaker 4: in the unlisted space. And now our government owned that
Speaker 4: a camera based enable radar business called CEA, which is
Speaker 4: a world leading business.
Speaker 3: And in the smaller unlisted space.
Speaker 4: Again in that private space, we have amazing businesses creating
Speaker 4: everything from the electronic warfare solutions. We have amazing space capability,
Speaker 4: radar sensors, training and targeting. We actually so hit above
Speaker 4: our weight when it comes to this. There's numerous opportunities
Speaker 4: out there.
Speaker 1: And more broadly, are we in attractive place to invest?
Speaker 1: Like does the government have the investment settings right at
Speaker 1: the moment?
Speaker 4: I think Australia had some amazing schemes to attract investors
Speaker 4: into markets. You know how you incentivize investors in it
Speaker 4: as you provide incentives and that's.
Speaker 3: Done through taxation typically.
Speaker 4: So we have two schemes primarily the e si C
Speaker 4: and Malcolm Turnble scheme from twenty sixteen sevent eight and
Speaker 4: the es VC LPT. But these roughly give very good
Speaker 4: tax breaks to investors. However, when you consider that in
Speaker 4: March two years ago that a French strategic review was
Speaker 4: published and it said two things I think it got correct,
Speaker 4: named China and then it said we're out of time.
Speaker 4: So in the context of being out of time and
Speaker 4: that alluded to our strategic warning time being eroded and
Speaker 4: we no longer have ten years, we have a lot
Speaker 4: less repair. What do you do in that context? So
Speaker 4: we need to super size and centives I believe for
Speaker 4: Australian private investors in this defense market. So instead of
Speaker 4: you know that that the ten and twenty percent incentives,
Speaker 4: if we think this is really strategic Bob, and we
Speaker 4: are out of time, let's make that fifty or one
Speaker 4: hundred percent tax incentives. So if we are out of time,
Speaker 4: we need to start acting.
Speaker 1: Yeah, and as we see you know, geopolitical tensions really
Speaker 1: escalating and brewing around the world, are you noticing a
Speaker 1: pickup in interest in investing in Australia's to spend sector?
Speaker 3: Very much?
Speaker 4: So, I would describe it, and I've been on the
Speaker 4: fundraising trail for two years at this point in time,
Speaker 4: I would describe it as the tarnish of investing in
Speaker 4: defense is slowly going off. So it's becoming a shinier
Speaker 4: thing that people care more about. Now, what's occurred in
Speaker 4: Ukraine in twenty two and you know, the Middle East
Speaker 4: since and the recent you know, circumnavigation of Australia by
Speaker 4: by Chinese flotilla has really bought the state of the
Speaker 4: world into into real brightness.
Speaker 3: So look, you know our the reality is that the
Speaker 3: Cold War ended. We got a bit lazy.
Speaker 4: But now the holiday from his tree is over and
Speaker 4: we've got to pick up our game. We really have
Speaker 4: to prove to our to our security guaranteel of being
Speaker 4: the United States that we're a good ally.
Speaker 1: Steve Baxter from Beaten Zone Venture Partners, thanks for coming
Speaker 1: on the show.
Speaker 3: Thanks ed.
Speaker 1: Australian farmers are expected to plant a record sized winter
Speaker 1: crop this year. That's according to report released this week
Speaker 1: by Rabobank. At the same time, Ossie beef production is
Speaker 1: expected to come close to equaling the records it's set
Speaker 1: last year thanks to a growing cattle herd. I spoke
Speaker 1: with Stefan Vogel, the general manager of Ravo Research, a
Speaker 1: little earlier.
Speaker 6: Well, the floods as devastating as they are locally and
Speaker 6: clearly also for the communities. On a larger scale, for
Speaker 6: the agricultural sector, it is probably not hitting us very
Speaker 6: hard on those commodities that you early on mentions or
Speaker 6: we're talking greens, we're talking beef, but clearly in those
Speaker 6: communities it is a real devastating problem for the farming
Speaker 6: sector and outlook overall. I think we are taking it
Speaker 6: as it brings quite a bit of moisture on this
Speaker 6: side of the continent, and we have already seen that
Speaker 6: moisture levels here are rather good in the north, maybe
Speaker 6: partly abundant, but we have also some dry spots. So
Speaker 6: with that, the floodings usually local problems, but for the
Speaker 6: big picture, not a big one.
Speaker 1: All right, Well, yeah, you mentioned soil moisture. Just explain
Speaker 1: the significance of good quality soil moisture when it comes
Speaker 1: to planting that winter crop.
Speaker 6: Yeah, So if we're looking across the country, obviously we
Speaker 6: have several regions that produce a whole lot of grain.
Speaker 6: We're talking New South Wales, we're talking Western Australia, but
Speaker 6: also along the South and a bit further north. So
Speaker 6: if we're going state by state, we see an increase
Speaker 6: in Western Australia in the acreage, partly coming out of Sheepland.
Speaker 6: And with that also we benefit from a rather okay
Speaker 6: soil moisture in many parts. So it has rained in
Speaker 6: the last five months, actually pretty decently in many of
Speaker 6: the areas it has improved. South Australia is still a
Speaker 6: rather big problem. Clearly, the drought has been ongoing for
Speaker 6: a while. We have not seen real reliefs in the region,
Speaker 6: so that farmers are planting grains, often in the dust,
Speaker 6: hoping that there is some rain to come. But it's
Speaker 6: going to be a tough one and it's not much
Speaker 6: different in the western part of Victoria. It's getting better
Speaker 6: if we're moving into New South Wales and the further
Speaker 6: north you go, so Sydney further north is usually looking
Speaker 6: pretty good. And if we're looking even further up, Queensland
Speaker 6: is actually pretty high moisture levels in the ground. So
Speaker 6: if we're going state by state, we think an increase
Speaker 6: in Western Australian acreage, decline in South Australia and in
Speaker 6: the drought areas, a slide to pretty much balanced area
Speaker 6: here in New South Wales, and also a bit of
Speaker 6: an uptick up in Queensland.
Speaker 1: All right, so almost a record level then a planting expected.
Speaker 1: But what about the prices are we seeing sefan for
Speaker 1: grains in general? How are they holding up?
Speaker 6: Yeah? Well, before we go to the price is also
Speaker 6: important to note there's a bit of a shift from
Speaker 6: crop to cop so grains. It's not just grains. The
Speaker 6: big one here is wheat. We see an increase in
Speaker 6: the wheat or a decrease in the wheat better to
Speaker 6: save for twenty five after it has increased last year
Speaker 6: quite a bit. It has to do with crop rotations
Speaker 6: when it rained last year, so we have actually seen
Speaker 6: a very strong wheat acreage last year. We see that
Speaker 6: reclining a little bit here. The crops that are benefiting
Speaker 6: is bali, so that's the one that we're using for
Speaker 6: brewing for example of the beer, but also canola, which
Speaker 6: goes often into Europe and Asian markets for the processing
Speaker 6: of the oil in the vegetable oil space. So with
Speaker 6: that there's a bit of a shift. And also a
Speaker 6: big winner for example are pulses, so we're talking chickpeas,
Speaker 6: lentils loopins, so crops that usually go quite a bit
Speaker 6: of broad into the markets. And the good news for
Speaker 6: those loopins and lentils has been that actually we see
Speaker 6: the chick beee market as well, that we see the
Speaker 6: Indians actually continuing to import, so the signs are good.
Speaker 6: That's the big market. Whenever they have abundant crops, India
Speaker 6: usually closes the door by increasing the tariffs that goods
Speaker 6: face when they cross the border.
Speaker 1: They're pretty good, all right, and then just quickly bait production.
Speaker 1: How's that tracking.
Speaker 6: Oh, we have a very good and high production level
Speaker 6: here in Australia, but if we're looking at the sector
Speaker 6: for twenty five we actually call it steady as it goes.
Speaker 6: So steady in these times is maybe a good thing
Speaker 6: because clearly we have high production volumes and with that
Speaker 6: also we need to find the market for those. We've
Speaker 6: seen that exports into the global market have been overall good.
Speaker 6: We see a bit of a softer kind of demand
Speaker 6: in the likes of China, while the US over the
Speaker 6: last year has been a real strong market for US.
Speaker 6: In the United States, the demand is driven by local
Speaker 6: supprise issues. So we have seen that the US had
Speaker 6: drought in the areas where they have a lot of cattle,
Speaker 6: and with that the feed availability was low. They have
Speaker 6: reduced their kettle hurt quite a bit, and it is
Speaker 6: so hard to get that quickly up and running again
Speaker 6: because it just takes time until the next calf is
Speaker 6: born and the until it is raised, so that they
Speaker 6: are still struggling. They're heavily importing despite teriffs, so we
Speaker 6: face obviously ten percent tariffs for Australian goods moving into
Speaker 6: that US market. But the US is a key market
Speaker 6: for US for shipping heavy volumes over there. You can
Speaker 6: say almost a quarter of the beef that is produced
Speaker 6: here in Australia is consumed locally and almost a similar
Speaker 6: amount is going into that US market. So with that
Speaker 6: we expect it to hold as a strong market for US,
Speaker 6: but we have seen that volatility can come quickly with
Speaker 6: changes of minds by President Trump. There for now, he
Speaker 6: has not hit us harder than any of our competitors
Speaker 6: with tariffs, so we're facing ten percent terraces and that's
Speaker 6: the same for Brazil and Argentina and New Zealand all
Speaker 6: those markets that we're competing with against in the beef
Speaker 6: import market into the US.
Speaker 1: Stefan Vogel, General Manager, robber Research, thanks for coming on
Speaker 1: the show. Thanks for having me after the break. Retail
Speaker 1: billionaire Brett Blundy has launched a new women's fashion label
Speaker 1: called Liaise. We'll speak to its CEO next Welcome back.
Speaker 1: Billionaire Brett Blundy has launched his latest retail brand in
Speaker 1: Australia with Liaise, officially unveiled yesterday Ingrid Willinge was there
Speaker 1: and spoke with lia CEO Linda Whitehead.
Speaker 5: Linda, thanks so much for joining us on the program.
Speaker 5: Just tell us versly a bit about what Liaise actually
Speaker 5: is and how it differentiates from some of its competitors.
Speaker 6: Yeah.
Speaker 7: Sure, So Liaise stands for love everything about yourself. So
Speaker 7: it's a new global lingerie, sleepware and beauty brand that
Speaker 7: we're selling online and in stores. And our differentiation is
Speaker 7: that we believe that women shouldn't have to choose between
Speaker 7: beauty and comfort. So we don't want them to just
Speaker 7: choose beautiful lingerie that is uncomfortable to wear or comfortable
Speaker 7: lingerie that isn't that beautiful. So we're bringing something new
Speaker 7: to the market in that regard.
Speaker 5: So do you think there's a gap in the market
Speaker 5: for that particular type of segment and what are the
Speaker 5: demographics for the brand?
Speaker 7: Well, I mean the demographics are all women, all ages,
Speaker 7: all sizes. We go up to a size eighteen and
Speaker 7: we go up to a G cup, so we're quite
Speaker 7: inclusive in that regard. But yeah, the gap in the
Speaker 7: market is also very much in the service aspect. So
Speaker 7: the old school world of bra fitting no longer exists
Speaker 7: in the market, and so we're bringing that back to
Speaker 7: our customers in our retail store environment so that they
Speaker 7: can get fitted and really really know what size they're
Speaker 7: wearing need to be wearing.
Speaker 5: I believe you've opened three stores already. Is that correct?
Speaker 5: In four stores?
Speaker 1: You're just opened a fourth, So what.
Speaker 5: Is the timeline for opening more stores? Is it a
Speaker 5: quick rampup? Are you ambitious with growth strategy for the
Speaker 5: target amount of stores?
Speaker 7: Yeah, we are ambitious. We've got so four already opened.
Speaker 7: We opened over the last two weeks. We've got another
Speaker 7: four that'll open in the next two months, and we
Speaker 7: hope to have fifteen stores by Christmas.
Speaker 5: In terms of I know Brett Blundy in the past
Speaker 5: has said he liked to be global. Is there a
Speaker 5: strategy for going global with the brand in the next
Speaker 5: sort of two years? Say, what's your timeline for that?
Speaker 1: Yeah?
Speaker 7: Absolutely, we believe that this brand's got the capacity to
Speaker 7: have hundreds of stores globally. We are already we have
Speaker 7: a Northern Hemisphere website and we have a fulfillment center
Speaker 7: in the UK, so we're able to get to the UK,
Speaker 7: for example, for next day delivery.
Speaker 5: Is it a different market though overseas to hear or
Speaker 5: we have a similar strategy when you go global to
Speaker 5: how you sort of operate here.
Speaker 7: In Australia, very similar strategy. We think that the gap
Speaker 7: really is that most brands are either that high end
Speaker 7: elevated design but not comfortable, or they're just comfort and
Speaker 7: they're not that high end, and we believe that women everywhere,
Speaker 7: all around the world deserve that.
Speaker 5: Obviously, when you talk retail, you know, cost of living
Speaker 5: comes up, it's a global issue. Cost of living at
Speaker 5: the moment, interest rates office how coming down, So that's
Speaker 5: a plus. But how do you mitigate that or how
Speaker 5: do you manage that as a retail brand?
Speaker 7: Yeah, sure, it's really important that we have our rangers
Speaker 7: that suit every woman, every level of income, every size.
Speaker 7: So we certainly have great value products in our brand
Speaker 7: and then right through to kind of high end design elements,
Speaker 7: so there really is something for everybody. How does the
Speaker 7: brand look in your view in twelve months or twenty
Speaker 7: four months, in the next two years. So in the
Speaker 7: next two years, I believe that we'll be close to
Speaker 7: one hundred stores globally.
Speaker 5: Oh wow, okay, and are you I guess you know
Speaker 5: you've worked in a bunch of different retail roles. How
Speaker 5: does this one compare.
Speaker 7: This is like the dream role, the opportunity to be
Speaker 7: involved in a true startup. And we've gone from nothing
Speaker 7: to where we are today in nine months time, so
Speaker 7: we're moving really quickly, and we've like employed the absolute
Speaker 7: dream team experts in this field, and of course we're
Speaker 7: working alongside and led by some of the most amazing
Speaker 7: retailers in the country, being Brett Blundi, Maya Chowie, mart McGinnis.
Speaker 5: All right, Linda, appreciate your time on the program. Thanks
Speaker 5: so much for joining us today. Thank you.
Speaker 1: So that's all for today's program. Thanks to your company today.
Speaker 1: We'll see you tomorrow.