1 00:00:04,050 --> 00:00:08,579 Michael Thompson: Interest rates smash consumer and business sentiment. The government outlined 2 00:00:08,580 --> 00:00:12,030 Michael Thompson: major changes for financial planners in an effort to convince 3 00:00:12,030 --> 00:00:16,139 Michael Thompson: investors to get advice. And Apple's valuation on Wall Street 4 00:00:16,139 --> 00:00:19,200 Michael Thompson: is now larger than the value of all the Super 5 00:00:19,200 --> 00:00:23,970 Michael Thompson: funds in Australia. It's Wednesday the 14th of June, 2023. 6 00:00:24,180 --> 00:00:27,929 Michael Thompson: Welcome to Fear & Greed, Australia's most popular business podcast. I'm 7 00:00:27,929 --> 00:00:30,149 Michael Thompson: Michael Thompson and good morning, Sean Aylmer. 8 00:00:30,480 --> 00:00:32,939 Sean Aylmer: Good morning, Michael. Looking forward to that Apple story. 9 00:00:33,360 --> 00:00:36,629 Michael Thompson: That is a cracking stat, that one, now larger than 10 00:00:36,629 --> 00:00:39,479 Michael Thompson: the value of all the Super funds across Australia. It 11 00:00:39,479 --> 00:00:41,248 Michael Thompson: is a monster of a company. 12 00:00:41,370 --> 00:00:42,120 Sean Aylmer: Sure is. 13 00:00:42,570 --> 00:00:43,979 Michael Thompson: We've got a bit more on that one coming up 14 00:00:43,979 --> 00:00:46,260 Michael Thompson: a bit later on. You've got an interview after the 15 00:00:46,260 --> 00:00:49,920 Michael Thompson: show today, Sean, with Sameer Chopra, who is head of 16 00:00:49,920 --> 00:00:51,089 Michael Thompson: research at CBRE. 17 00:00:52,350 --> 00:00:55,050 Sean Aylmer: Yes. So CBRE are a great supporter of ours here 18 00:00:55,050 --> 00:00:58,020 Sean Aylmer: at Fear & Greed, and we talk to Sameer about what's 19 00:00:58,020 --> 00:01:00,870 Sean Aylmer: going to happen in the housing market, not so much 20 00:01:00,870 --> 00:01:04,769 Sean Aylmer: about what has happened, but what's going to happen. And 21 00:01:04,770 --> 00:01:08,759 Sean Aylmer: in terms of price rises, he's generally fairly upbeat, particularly 22 00:01:08,759 --> 00:01:11,850 Sean Aylmer: in specific segments of the market. Mostly it's because of 23 00:01:11,850 --> 00:01:15,179 Sean Aylmer: migration, as he puts it, supply and demand is going 24 00:01:15,180 --> 00:01:17,640 Sean Aylmer: to trump interest rates. Well worth a listen. 25 00:01:17,880 --> 00:01:21,120 Michael Thompson: Oh yeah, definitely. Really good interview today, Sean. They're all 26 00:01:21,120 --> 00:01:22,140 Michael Thompson: good, of course. 27 00:01:22,200 --> 00:01:22,829 Sean Aylmer: Of course. 28 00:01:22,920 --> 00:01:25,950 Michael Thompson: But today is definitely worth a listen. The main story 29 00:01:26,280 --> 00:01:30,328 Michael Thompson: this morning, Sean, interest rate rises are hammering consumer confidence 30 00:01:30,360 --> 00:01:33,240 Michael Thompson: and even businesses, which until now have been the shining 31 00:01:33,240 --> 00:01:36,000 Michael Thompson: light in the economy, are finding conditioned much tougher. 32 00:01:36,600 --> 00:01:40,110 Sean Aylmer: Consumer confidence is stuck at recessionary levels and the impact of 33 00:01:40,110 --> 00:01:44,578 Sean Aylmer: rates was made very clear yesterday. The Westpac Melbourne Institute 34 00:01:44,700 --> 00:01:48,510 Sean Aylmer: Consumer Confidence Survey was released. Now part of it was 35 00:01:48,510 --> 00:01:52,560 Sean Aylmer: taken before the rate rise last week and part afterwards. 36 00:01:53,550 --> 00:01:58,530 Sean Aylmer: Consumer sentiment had risen from 79 points to 89 points, 37 00:01:58,530 --> 00:02:02,309 Sean Aylmer: still low, but 89 points in the days ahead of 38 00:02:02,309 --> 00:02:05,669 Sean Aylmer: the Reserve Bank announcement. Then the announcement was made and 39 00:02:05,670 --> 00:02:10,019 Sean Aylmer: it tumbled to 72 points. Anything under 100 is considered 40 00:02:10,020 --> 00:02:14,279 Sean Aylmer: pessimistic, but the survey just showed how dramatic an impact 41 00:02:14,280 --> 00:02:18,929 Sean Aylmer: interest rates are having on confidence. Westpac Chief economist, Bill 42 00:02:18,929 --> 00:02:21,059 Sean Aylmer: Evans, said for the last year, the index has held 43 00:02:21,059 --> 00:02:25,140 Sean Aylmer: at round levels not seen on a sustained basis since 44 00:02:25,169 --> 00:02:29,430 Sean Aylmer: the deep recession of the late 1980s, early 1990s. Nearly 45 00:02:29,430 --> 00:02:32,519 Sean Aylmer: eight in 10 respondents said they expect rates to continue 46 00:02:32,520 --> 00:02:35,219 Sean Aylmer: to rise over the coming year, with half predicting an 47 00:02:35,219 --> 00:02:38,279 Sean Aylmer: increase of one percentage point or more. While only a 48 00:02:38,280 --> 00:02:40,889 Sean Aylmer: third of households are dealing with the surging mortgage costs, 49 00:02:41,190 --> 00:02:44,610 Sean Aylmer: the survey shows inflation more broadly rather than just interest 50 00:02:44,610 --> 00:02:47,820 Sean Aylmer: rates, is a predominant issue on the minds of Australians. 51 00:02:49,080 --> 00:02:54,150 Michael Thompson: So why ... I know I'm inviting an economics lesson here. 52 00:02:54,210 --> 00:02:55,440 Sean Aylmer: Oh yes, go on, go on. 53 00:02:55,650 --> 00:02:59,069 Michael Thompson: Why then is consumer confidence so important? Is it all 54 00:02:59,070 --> 00:03:00,419 Michael Thompson: just then tied to spending? 55 00:03:00,840 --> 00:03:04,169 Sean Aylmer: Yeah, totally. It's the idea that if you feel good 56 00:03:04,169 --> 00:03:07,410 Sean Aylmer: about your job, about the value of your house, about 57 00:03:07,410 --> 00:03:10,889 Sean Aylmer: how things are going generally, you spend more and so 58 00:03:10,889 --> 00:03:15,119 Sean Aylmer: consumer confidence is really fundamental to an economy ticking over. 59 00:03:15,120 --> 00:03:17,669 Sean Aylmer: When you're worried about your job, when you are worried 60 00:03:17,940 --> 00:03:20,460 Sean Aylmer: about the cost of petrol and how much you've got to pay for 61 00:03:20,850 --> 00:03:23,550 Sean Aylmer: energy, you pull back and we've seen that happening. The 62 00:03:23,550 --> 00:03:26,730 Sean Aylmer: retail sales figures have really shown that consumer sentiment is 63 00:03:26,730 --> 00:03:29,700 Sean Aylmer: down, so too are retail sales, hence the economy slows. 64 00:03:30,030 --> 00:03:31,709 Michael Thompson: So those two really go hand in hand. 65 00:03:32,040 --> 00:03:33,720 Sean Aylmer: They do. Well done, you've been listening. 66 00:03:34,020 --> 00:03:34,890 Michael Thompson: I really have been. 67 00:03:35,039 --> 00:03:35,669 Sean Aylmer: Three years. 68 00:03:35,699 --> 00:03:39,060 Michael Thompson: Okay, you don't need to point that out. I've already 69 00:03:39,060 --> 00:03:41,580 Michael Thompson: put myself out there and said, " I want you to explain this." 70 00:03:41,580 --> 00:03:43,830 Michael Thompson: You just kind of shove that knife in just a 71 00:03:43,830 --> 00:03:47,400 Michael Thompson: little bit more. What's happening then to business conditions and 72 00:03:47,400 --> 00:03:48,270 Michael Thompson: business confidence? 73 00:03:48,540 --> 00:03:51,990 Sean Aylmer: Well, business conditions continued to ease last month, with falls 74 00:03:51,990 --> 00:03:56,610 Sean Aylmer: across trading, profitability and employment sub- components. The National Australia 75 00:03:56,610 --> 00:04:00,000 Sean Aylmer: Bank Business Conditions and Sentiment Index shows the falling conditions 76 00:04:00,000 --> 00:04:03,120 Sean Aylmer: is now accelerating and while they remain a touch above 77 00:04:03,120 --> 00:04:06,928 Sean Aylmer: their long run average, they're well below the level seen 78 00:04:06,929 --> 00:04:10,379 Sean Aylmer: in early 2023 and definitely conditions are on the slide. 79 00:04:10,379 --> 00:04:13,500 Sean Aylmer: Now, business confidence fell to minus four, it's been below 80 00:04:13,500 --> 00:04:17,580 Sean Aylmer: zero since February, i. e, businesses are not confident about 81 00:04:17,580 --> 00:04:21,120 Sean Aylmer: the future, but even trading now, that's a conditions index, 82 00:04:21,389 --> 00:04:24,719 Sean Aylmer: ain't so good. In trend terms, conditions remain strongest in 83 00:04:24,719 --> 00:04:28,289 Sean Aylmer: Western Australia, Queensland and Tasmania. The first two, of course, 84 00:04:28,529 --> 00:04:31,860 Sean Aylmer: are big mining states, though they are still positive and 85 00:04:31,980 --> 00:04:34,830 Sean Aylmer: at or above average levels in New South Wales, Victoria 86 00:04:34,830 --> 00:04:36,060 Sean Aylmer: and South Australia. 87 00:04:37,170 --> 00:04:40,589 Michael Thompson: All right. Business confidence then, Sean, if consumer confidence is 88 00:04:40,589 --> 00:04:43,440 Michael Thompson: about then kind of tied to their spending and the 89 00:04:43,440 --> 00:04:47,010 Michael Thompson: willingness to spend, is that then also the same for 90 00:04:47,010 --> 00:04:49,560 Michael Thompson: business in terms of how much they're willing to invest 91 00:04:49,560 --> 00:04:50,039 Michael Thompson: and just- 92 00:04:50,039 --> 00:04:53,430 Sean Aylmer: Oh, Michael, you don't need me anymore. 93 00:04:53,970 --> 00:04:56,279 Michael Thompson: Well, this is actually the un- subtle way of saying, 94 00:04:56,279 --> 00:04:58,229 Michael Thompson: Sean, we need to have a chat about your position. 95 00:05:00,300 --> 00:05:02,999 Michael Thompson: I'm just auditioning now to take over the top dog 96 00:05:03,000 --> 00:05:04,799 Michael Thompson: role. No, so that's essentially right? 97 00:05:05,190 --> 00:05:07,860 Sean Aylmer: Yeah, that's exactly right. Business invest when they're confident about 98 00:05:07,860 --> 00:05:09,570 Sean Aylmer: the future, and when they're not confident about the future, 99 00:05:09,779 --> 00:05:13,110 Sean Aylmer: they pull back, fearing that they're going to have to reduce costs and that 100 00:05:13,110 --> 00:05:13,380 Sean Aylmer: type of thing. 101 00:05:13,381 --> 00:05:17,820 Michael Thompson: Okay. Okay. So well we've got dreadful consumer sentiment, falling 102 00:05:17,820 --> 00:05:22,139 Michael Thompson: business conditions and negative business sentiment. Any chance that all of 103 00:05:22,139 --> 00:05:25,140 Michael Thompson: that kind of combined will stop further rate rises? 104 00:05:25,740 --> 00:05:27,840 Sean Aylmer: No. No. Oh, Michael, please. Nothing like that. 105 00:05:28,110 --> 00:05:29,520 Michael Thompson: I'd been going so well, hadn't I? 106 00:05:30,390 --> 00:05:33,089 Sean Aylmer: No, I mean, it's a fair question. It's unlikely though 107 00:05:33,089 --> 00:05:35,490 Sean Aylmer: because the Reserve Bank certainly keeps a close watch on 108 00:05:35,490 --> 00:05:39,210 Sean Aylmer: both surveys, particularly the NAB Business Survey in recent years. 109 00:05:39,870 --> 00:05:42,388 Sean Aylmer: But economists do think that there are another couple of 110 00:05:42,420 --> 00:05:45,120 Sean Aylmer: rate rises in coming months, even if they don't think 111 00:05:45,120 --> 00:05:47,970 Sean Aylmer: they're needed, and that of course is because inflation is 112 00:05:47,970 --> 00:05:49,380 Sean Aylmer: still too high. 113 00:05:50,580 --> 00:05:55,259 Michael Thompson: Sean, I've learned so much from you, and here, end 114 00:05:55,259 --> 00:05:57,988 Michael Thompson: of the lesson. We now move on to the local share 115 00:05:57,990 --> 00:05:59,669 Michael Thompson: market. How did it perform yesterday? 116 00:06:00,029 --> 00:06:02,640 Sean Aylmer: The S& P ASX 200 finished the day up just a 117 00:06:02,640 --> 00:06:06,270 Sean Aylmer: touch, to 7, 139 points. It's all about the tech stocks 118 00:06:06,270 --> 00:06:10,678 Sean Aylmer: really, following ongoing strength in global tech companies. WiseTech Global 119 00:06:10,678 --> 00:06:14,130 Sean Aylmer: and Xero were up five and 4% respectively. Domain Holdings 120 00:06:14,130 --> 00:06:17,339 Sean Aylmer: and NEXTDC also did well. Healthcare and telcos did pretty 121 00:06:17,339 --> 00:06:21,000 Sean Aylmer: well too. And the travel groups, Qantas, Flight Center and 122 00:06:21,060 --> 00:06:25,260 Sean Aylmer: CTM outperformed, CTM being Corporate Travel Management. Energy companies were 123 00:06:25,260 --> 00:06:28,709 Sean Aylmer: among the worst performers. Santos and Woodside fell sharply, as 124 00:06:28,710 --> 00:06:32,040 Sean Aylmer: did the coal companies. Yancoal and Whitehaven fell quite a 125 00:06:32,040 --> 00:06:34,770 Sean Aylmer: bit. The gold companies dropped, with Newcrest down more than 1. 126 00:06:34,770 --> 00:06:39,990 Sean Aylmer: 5%, while Rio, Fortescue Metals, Woodside and BHP all ended lower. 127 00:06:40,500 --> 00:06:42,150 Michael Thompson: And what about international markets? 128 00:06:42,510 --> 00:06:45,750 Sean Aylmer: Well, oil prices remain around three month lows following ongoing 129 00:06:45,750 --> 00:06:49,440 Sean Aylmer: concerns over the outlook in China and the US. Chinese 130 00:06:49,440 --> 00:06:53,699 Sean Aylmer: trade data and figures showing international flights from Northeast Asia 131 00:06:54,000 --> 00:06:57,990 Sean Aylmer: are still 40% below pre- virus levels, highlight the weak 132 00:06:57,990 --> 00:07:02,219 Sean Aylmer: recovery in the world's top importer of crude oil. Hence, 133 00:07:02,730 --> 00:07:05,580 Sean Aylmer: there's downward pressure on oil prices, kind of good for 134 00:07:05,580 --> 00:07:08,549 Sean Aylmer: us at the bowser. Gold prices are also lower and 135 00:07:08,549 --> 00:07:11,039 Sean Aylmer: we saw that in the performance of the share prices 136 00:07:11,039 --> 00:07:14,460 Sean Aylmer: of Newcrest, et cetera, yesterday. Coal prices are down, iron 137 00:07:14,460 --> 00:07:16,650 Sean Aylmer: ore prices are down, though the Aussie dollar is up 138 00:07:16,650 --> 00:07:19,800 Sean Aylmer: a bit. It's trading not that far off 67 US cents. 139 00:07:20,309 --> 00:07:22,500 Michael Thompson: All right. Plenty going on, Sean. We'll be back in 140 00:07:22,500 --> 00:07:24,570 Michael Thompson: a moment with the rest of the day's business news. 141 00:07:30,930 --> 00:07:35,310 Michael Thompson: Sean, the federal government will wind back onerous financial advice 142 00:07:35,340 --> 00:07:39,660 Michael Thompson: red tape, accepting 14 of 22 recommendations made in its 143 00:07:39,660 --> 00:07:42,060 Michael Thompson: year long quality of advice review. 144 00:07:42,870 --> 00:07:45,540 Sean Aylmer: Michael, in the world of financial advisors, and that's the 145 00:07:45,540 --> 00:07:49,500 Sean Aylmer: world we love, this is big, big news. So the 146 00:07:49,500 --> 00:07:52,350 Sean Aylmer: government is set to abandon a lot of the paperwork 147 00:07:52,350 --> 00:07:55,440 Sean Aylmer: for Super funds and financial planners in an effort to 148 00:07:55,440 --> 00:08:00,180 Sean Aylmer: boost access to affordable advice. But it has stopped short 149 00:08:00,420 --> 00:08:02,730 Sean Aylmer: of exempting the big banks from what's known as the 150 00:08:02,730 --> 00:08:06,870 Sean Aylmer: best interest duty, which if they had exempted the banks 151 00:08:06,900 --> 00:08:09,330 Sean Aylmer: from that, it would've made it easier for banks to 152 00:08:09,330 --> 00:08:12,420 Sean Aylmer: provide advice. The fundamental problem is that not enough of 153 00:08:12,420 --> 00:08:16,920 Sean Aylmer: us get financial advice. Allens partner, Michelle Levy, chaired a 154 00:08:16,920 --> 00:08:20,309 Sean Aylmer: review of the rules around financial advice. She handed the 155 00:08:20,309 --> 00:08:22,709 Sean Aylmer: government her findings last December, they've been sitting on it 156 00:08:22,709 --> 00:08:25,290 Sean Aylmer: till yesterday. One of the key changes will be new 157 00:08:25,290 --> 00:08:27,990 Sean Aylmer: legislation to make it cheaper and less risky for Super 158 00:08:27,990 --> 00:08:30,750 Sean Aylmer: funds to provide advice. So if you're a retiree or 159 00:08:30,750 --> 00:08:33,360 Sean Aylmer: you are retiring and you're looking for financial advice, it'll 160 00:08:33,360 --> 00:08:35,880 Sean Aylmer: be easier for your Super fund to give you some. 161 00:08:36,150 --> 00:08:38,639 Sean Aylmer: Also, financial advisors will no longer have to provide a 162 00:08:38,639 --> 00:08:42,510 Sean Aylmer: lengthy statement of advice document or fee disclosure statements to 163 00:08:42,510 --> 00:08:46,860 Sean Aylmer: customers when providing personal advice, and separate fee consent requirements 164 00:08:46,860 --> 00:08:50,910 Sean Aylmer: introduced after the Royal Commission will be streamlined. Think about 165 00:08:50,910 --> 00:08:53,639 Sean Aylmer: all that, so much paperwork involved, it actually makes it 166 00:08:53,639 --> 00:08:56,610 Sean Aylmer: very expensive for a financial planner to provide advice, and the 167 00:08:56,610 --> 00:08:59,249 Sean Aylmer: idea with this is to cut some of those costs. 168 00:08:59,580 --> 00:09:02,580 Sean Aylmer: The government will also accept Ms. Levy's recommendation to remove 169 00:09:02,580 --> 00:09:05,790 Sean Aylmer: the so- called safe harbor steps, which is a legal 170 00:09:05,790 --> 00:09:08,939 Sean Aylmer: checklist required to demonstrate a provider has complied with the 171 00:09:08,940 --> 00:09:12,570 Sean Aylmer: duty to act in the best interests of clients. In 172 00:09:12,570 --> 00:09:16,649 Sean Aylmer: recent years, 10,000 advisors have quit the industry, pushing up 173 00:09:16,650 --> 00:09:20,819 Sean Aylmer: the price of receiving advice, hopefully making life easier for advisors 174 00:09:20,820 --> 00:09:23,580 Sean Aylmer: will encourage more participants in the industry, which will push 175 00:09:23,580 --> 00:09:27,539 Sean Aylmer: the price down and many more people will receive quality 176 00:09:27,540 --> 00:09:28,500 Sean Aylmer: financial advice. 177 00:09:28,770 --> 00:09:32,249 Michael Thompson: Yeah, and that is very good news, Sean. Industry superannuation 178 00:09:32,250 --> 00:09:36,419 Michael Thompson: giant Hostplus is closing its standalone property and infrastructure fund 179 00:09:36,780 --> 00:09:40,230 Michael Thompson: as fears grow that tens of billions of dollars could 180 00:09:40,230 --> 00:09:43,260 Michael Thompson: be wiped out from the commercial property sector as buildings 181 00:09:43,260 --> 00:09:44,130 Michael Thompson: are revalued. 182 00:09:44,580 --> 00:09:47,098 Sean Aylmer: Yeah, so the previous story was really big for financial 183 00:09:47,099 --> 00:09:50,639 Sean Aylmer: planners, this one is really big in commercial property. And 184 00:09:50,639 --> 00:09:54,479 Sean Aylmer: given most of us actually invest in commercial property via 185 00:09:54,480 --> 00:09:57,929 Sean Aylmer: our Super funds, it's an important story for everyone. Never 186 00:09:57,929 --> 00:10:00,179 Sean Aylmer: sure, when you're telling a story, you've got to give 187 00:10:00,179 --> 00:10:02,040 Sean Aylmer: people a reason why they should listen before you tell 188 00:10:02,040 --> 00:10:03,569 Sean Aylmer: the story, but just park that for the moment. 189 00:10:04,230 --> 00:10:06,509 Michael Thompson: You've gone all in on this today, haven't you, every 190 00:10:06,509 --> 00:10:08,969 Michael Thompson: story is going to be kind of introduced with this 191 00:10:08,969 --> 00:10:10,708 Michael Thompson: is why it's important, so keep listening. 192 00:10:10,708 --> 00:10:13,440 Sean Aylmer: That's right. Well, so the background is this, there are 193 00:10:13,440 --> 00:10:16,620 Sean Aylmer: plenty of buildings and office towers out there owned mostly 194 00:10:16,620 --> 00:10:19,679 Sean Aylmer: by Super companies or big investors, but some smaller investors 195 00:10:19,679 --> 00:10:24,149 Sean Aylmer: as well, which haven't been adequately revalued since before COVID. 196 00:10:24,480 --> 00:10:27,420 Sean Aylmer: Now eventually that has to happen and the fear is just 197 00:10:27,420 --> 00:10:31,588 Sean Aylmer: like what happened in residential property, prices have actually tumbled. 198 00:10:31,590 --> 00:10:34,440 Sean Aylmer: So a building worth $ 100 million on the books because it was 199 00:10:34,440 --> 00:10:37,380 Sean Aylmer: valued three or four years ago, might actually be only 200 00:10:37,380 --> 00:10:42,270 Sean Aylmer: worth $ 85 million. Hostplus said it's closing its standalone property 201 00:10:42,270 --> 00:10:45,150 Sean Aylmer: and infrastructure funds for a range of reasons, including concerns 202 00:10:45,150 --> 00:10:48,660 Sean Aylmer: around investment risk, that's what I'm talking about, rebalancing and 203 00:10:48,660 --> 00:10:51,750 Sean Aylmer: complexity in unlisted assets. That's all kind of part of 204 00:10:51,750 --> 00:10:54,990 Sean Aylmer: that reason what I'm talking about. In short, the fear 205 00:10:54,990 --> 00:10:58,110 Sean Aylmer: is, and I can't say Hostplus specifically, but Super funds 206 00:10:58,110 --> 00:11:01,680 Sean Aylmer: could be sitting on assets worth billions of dollars less 207 00:11:02,190 --> 00:11:04,920 Sean Aylmer: than what they've recorded on the books, and of course, 208 00:11:05,219 --> 00:11:05,969 Sean Aylmer: that's our money. 209 00:11:06,449 --> 00:11:09,120 Michael Thompson: That is a big story. Now Sean, this next story is 210 00:11:09,120 --> 00:11:12,030 Michael Thompson: an important one because it's about politics and obviously we 211 00:11:12,030 --> 00:11:14,730 Michael Thompson: vote for the politicians and therefore it's relevant to everyone. 212 00:11:15,090 --> 00:11:18,088 Michael Thompson: I thought I'd just jump in on the trend and 213 00:11:18,090 --> 00:11:20,849 Michael Thompson: try and set the scene. Anyway, we know federal parliament's 214 00:11:20,849 --> 00:11:23,699 Michael Thompson: busy again at the moment with the pollies in Canberra for 215 00:11:23,699 --> 00:11:27,179 Michael Thompson: the next couple of weeks before the midwinter break. Yesterday, 216 00:11:27,210 --> 00:11:30,870 Michael Thompson: the Greens formally rejected a compromise offer by the Albanese 217 00:11:30,870 --> 00:11:34,230 Michael Thompson: government, designed to secure the passage of the $ 10 billion 218 00:11:34,559 --> 00:11:36,119 Michael Thompson: Housing Australia Future Fund. 219 00:11:36,660 --> 00:11:39,600 Sean Aylmer: Under the original policy, the government would invest $ 10 billion with 220 00:11:40,020 --> 00:11:42,630 Sean Aylmer: the Future Fund and the earnings would be used to 221 00:11:42,630 --> 00:11:46,200 Sean Aylmer: build social and affordable housing. Now responding to criticism from 222 00:11:46,200 --> 00:11:47,968 Sean Aylmer: the Greens, who hold the balance of power in the 223 00:11:47,970 --> 00:11:50,580 Sean Aylmer: Senate, the government then said it would spend a minimum 224 00:11:50,580 --> 00:11:53,969 Sean Aylmer: of $ 500 million a year, with the aim of building 30, 000 225 00:11:53,969 --> 00:11:58,260 Sean Aylmer: social and affordable rental homes over five years, including 400 226 00:11:58,260 --> 00:12:01,770 Sean Aylmer: properties for women and children facing family and domestic violence, 227 00:12:01,770 --> 00:12:05,400 Sean Aylmer: and for older Australians, particularly women, at risk of homelessness. 228 00:12:05,850 --> 00:12:08,850 Sean Aylmer: But the Greens said it's not enough, they still want 229 00:12:09,000 --> 00:12:11,639 Sean Aylmer: a nationally coordinated freeze on rents and up to two 230 00:12:11,639 --> 00:12:14,580 Sean Aylmer: and a half billion dollars a year on housing. Anthony 231 00:12:14,580 --> 00:12:16,949 Sean Aylmer: Albanese, the Prime Minister, he said he's not going to 232 00:12:16,949 --> 00:12:19,320 Sean Aylmer: go any further. We're at a stalemate on that one. 233 00:12:19,620 --> 00:12:23,069 Michael Thompson: Yeah, sounds like it. Also, yesterday we had Labor Senator, 234 00:12:23,070 --> 00:12:28,260 Michael Thompson: Katy Gallagher, reject the coalition's allegations that she misled parliament 235 00:12:28,260 --> 00:12:31,319 Michael Thompson: in 2021 when she said she was unaware of Brittany 236 00:12:31,320 --> 00:12:33,929 Michael Thompson: Higgins rape allegation before it became public. 237 00:12:34,289 --> 00:12:37,679 Sean Aylmer: Gallagher said she had always acted ethically and with basic 238 00:12:37,679 --> 00:12:42,059 Sean Aylmer: human decency on all matters related to Higgins. Former Prime 239 00:12:42,059 --> 00:12:44,699 Sean Aylmer: Minister, Scott Morrison, was also forced to deny he had 240 00:12:44,700 --> 00:12:48,838 Sean Aylmer: misled parliament about what he knew. I think this is 241 00:12:48,840 --> 00:12:51,299 Sean Aylmer: just a very sad story all round, Michael. I don't 242 00:12:51,299 --> 00:12:53,848 Sean Aylmer: know what the truth of it is, but certainly the 243 00:12:53,850 --> 00:12:56,580 Sean Aylmer: media is having a field day on it and that 244 00:12:56,640 --> 00:12:58,319 Sean Aylmer: doesn't help any of the participants in it. 245 00:12:58,710 --> 00:13:01,439 Michael Thompson: No, it doesn't. One last one on politics, Sean. The 246 00:13:01,440 --> 00:13:04,800 Michael Thompson: latest opinion poll shows that voters have cut their support 247 00:13:04,800 --> 00:13:09,059 Michael Thompson: for Labor from 42 to 40% over the past month, 248 00:13:09,059 --> 00:13:12,330 Michael Thompson: while cooling on the party and Prime Minister Anthony Albanese 249 00:13:12,330 --> 00:13:15,960 Michael Thompson: on key benchmarks, including leadership, vision, and competence. 250 00:13:16,500 --> 00:13:18,598 Sean Aylmer: I think they've had such a good run the first 251 00:13:18,600 --> 00:13:22,469 Sean Aylmer: 12 months of parliament or their government, you'd imagine that 252 00:13:22,469 --> 00:13:24,990 Sean Aylmer: it has to come off just a little bit and 253 00:13:24,990 --> 00:13:27,779 Sean Aylmer: that shift in sentiment has also delivered a small gain 254 00:13:28,049 --> 00:13:30,600 Sean Aylmer: to Opposition Leader, Peter Dutton, when voters were asked about 255 00:13:30,629 --> 00:13:35,338 Sean Aylmer: their preferred prime minister, with his support increasing from 20 to 22%. 256 00:13:35,640 --> 00:13:39,059 Sean Aylmer: But according to the Resolve Strategic Survey for the Sydney 257 00:13:39,059 --> 00:13:42,120 Sean Aylmer: Morning Herald and The Age, Albanese retains a large lead 258 00:13:42,120 --> 00:13:45,869 Sean Aylmer: as preferred prime minister, favored by about 53% of voters. 259 00:13:46,260 --> 00:13:49,440 Sean Aylmer: And Michael, just before we leave politics, both Albanese and 260 00:13:49,440 --> 00:13:53,370 Sean Aylmer: Opposition Leader, Peter Dutton, yesterday said, Australian's thoughts and prayers 261 00:13:53,370 --> 00:13:55,680 Sean Aylmer: are with the families of those who lost loved ones 262 00:13:55,920 --> 00:13:58,260 Sean Aylmer: in this week's dreadful Hunter Valley bus crash. 263 00:13:58,500 --> 00:14:01,679 Michael Thompson: Yeah, it's terrible. Now, Sean, we've talked a lot in 264 00:14:01,679 --> 00:14:04,559 Michael Thompson: the past about Domino's. In fact, I think CEO, Don 265 00:14:04,559 --> 00:14:08,880 Michael Thompson: Meij, has appeared on the podcast before. Yesterday, the share 266 00:14:08,880 --> 00:14:12,840 Michael Thompson: price for Domino's tumbled nearly 10% after it said sales 267 00:14:12,840 --> 00:14:16,470 Michael Thompson: are expected to not meet expectations this financial year. 268 00:14:16,830 --> 00:14:18,689 Sean Aylmer: Yes, so the share price hit a four- year low 269 00:14:18,690 --> 00:14:22,080 Sean Aylmer: after the pizza chain said underlying earnings have not improved 270 00:14:22,109 --> 00:14:25,230 Sean Aylmer: the second half compared to the first half, it's decided 271 00:14:25,230 --> 00:14:28,470 Sean Aylmer: it will exit Denmark and cut costs elsewhere. By the 272 00:14:28,470 --> 00:14:30,870 Sean Aylmer: end of the day, Domino's share price was about 5% 273 00:14:31,230 --> 00:14:34,380 Sean Aylmer: lower, having fallen 10% earlier on, it's down more than 274 00:14:34,380 --> 00:14:38,609 Sean Aylmer: 40% since its peak this year, and more than 70% 275 00:14:38,610 --> 00:14:41,910 Sean Aylmer: since its COVID peak. The 27 stores in Denmark will 276 00:14:41,910 --> 00:14:45,360 Sean Aylmer: close, as will 15 to 20% of its corporate store 277 00:14:45,360 --> 00:14:48,930 Sean Aylmer: network, it's got about 900 stores there. What's that mean? 278 00:14:48,930 --> 00:14:53,250 Sean Aylmer: About 100, 120 stores will go. The company said about 65 to 70 279 00:14:53,370 --> 00:14:56,460 Sean Aylmer: underperforming sites have been open for some time but are 280 00:14:56,460 --> 00:14:59,970 Sean Aylmer: not expected to reach sustainable levels of sales or profitability. 281 00:15:00,270 --> 00:15:04,410 Sean Aylmer: The Domino's story has always been about growth and suddenly 282 00:15:04,410 --> 00:15:07,860 Sean Aylmer: they're closing stores, investors didn't like that, hence they sold 283 00:15:08,130 --> 00:15:08,880 Sean Aylmer: the shares off. 284 00:15:09,270 --> 00:15:12,780 Michael Thompson: Sean, the Queensland Palaszczuk government has delivered a $ 12 billion 285 00:15:13,020 --> 00:15:16,920 Michael Thompson: surplus this financial year, thanks to coal royalties, but big 286 00:15:16,920 --> 00:15:20,250 Michael Thompson: spending on clean energy projects next financial year will result 287 00:15:20,250 --> 00:15:24,001 Michael Thompson: in a deficit in 2023, '24. 288 00:15:24,001 --> 00:15:27,809 Sean Aylmer: Oh, to be the chief accountant in Queensland or Western Australia, for 289 00:15:27,809 --> 00:15:31,409 Sean Aylmer: that matter. Now coal royalties in Queensland jumped $ 10 billion 290 00:15:31,830 --> 00:15:35,879 Sean Aylmer: this financial year alone, to $ 15.3 billion, according to the 291 00:15:35,879 --> 00:15:40,230 Sean Aylmer: state budget released yesterday. Queensland Treasurer, Cameron Dick, and Premier, 292 00:15:40,710 --> 00:15:43,410 Sean Aylmer: Annastacia Palaszczuk, also announced a one and a half billion cost of 293 00:15:43,410 --> 00:15:48,270 Sean Aylmer: living package, including $ 550 energy rebates for all households and 294 00:15:48,270 --> 00:15:51,870 Sean Aylmer: up to $1, 000 in rebates for vulnerable households. The Treasurer 295 00:15:51,870 --> 00:15:54,870 Sean Aylmer: said cost of living measures were a key priority of 296 00:15:54,870 --> 00:15:58,020 Sean Aylmer: his fourth budget. While southern states, such as Victoria, have 297 00:15:58,020 --> 00:16:01,620 Sean Aylmer: resorted to big tax increases to cover COVID-19 spending measures, 298 00:16:02,040 --> 00:16:05,610 Sean Aylmer: Queensland and Western Australia have benefited from a surge in 299 00:16:05,610 --> 00:16:06,570 Sean Aylmer: coal royalties. 300 00:16:07,349 --> 00:16:10,949 Michael Thompson: Okay, turning to international news now, and China's Central Bank 301 00:16:10,949 --> 00:16:15,270 Michael Thompson: yesterday surprised most economists by cutting a short term policy 302 00:16:15,270 --> 00:16:18,840 Michael Thompson: interest rate in an effort to boost the faltering recovery 303 00:16:19,170 --> 00:16:20,820 Michael Thompson: in the world's second- largest economy. 304 00:16:21,450 --> 00:16:23,520 Sean Aylmer: This could well flow through to markets in the next 305 00:16:23,520 --> 00:16:25,950 Sean Aylmer: few days. The People's Bank of China lowered the seven- 306 00:16:25,950 --> 00:16:29,339 Sean Aylmer: day reverse repurchase rate by 10 basis points to 1. 307 00:16:29,580 --> 00:16:33,360 Sean Aylmer: 9%, according to a statement. It was the first reduction 308 00:16:33,360 --> 00:16:36,150 Sean Aylmer: in the rate since August, 2022. Now, the move was 309 00:16:36,150 --> 00:16:39,360 Sean Aylmer: unusual because it came before the Central Bank is set 310 00:16:39,360 --> 00:16:42,269 Sean Aylmer: to announce any adjustments to the rate on one year 311 00:16:42,270 --> 00:16:46,169 Sean Aylmer: policy loans, known as a medium term lending facility. That's 312 00:16:46,170 --> 00:16:49,050 Sean Aylmer: kind of the benchmark rate. Speculation has grown that the 313 00:16:49,050 --> 00:16:51,900 Sean Aylmer: People's Bank of China will cut the rate later this 314 00:16:51,900 --> 00:16:54,900 Sean Aylmer: week just ahead of the release of official data that's 315 00:16:54,900 --> 00:16:58,829 Sean Aylmer: expected to show the economy's recovery lost for further momentum. 316 00:16:59,160 --> 00:17:03,179 Sean Aylmer: Hence, regulators are trying to boost sentiment, at least in 317 00:17:03,270 --> 00:17:03,989 Sean Aylmer: the short term. 318 00:17:04,740 --> 00:17:07,800 Michael Thompson: Sean, Donald Trump has stepped up his rhetoric ahead of 319 00:17:07,800 --> 00:17:11,640 Michael Thompson: his day in court, vowing to extract political revenge for 320 00:17:11,640 --> 00:17:15,148 Michael Thompson: his indictment over mishandling classified documents. 321 00:17:15,510 --> 00:17:18,300 Sean Aylmer: In a social media post, Trump said that if elected 322 00:17:18,300 --> 00:17:21,539 Sean Aylmer: to the White House again in 2024, he will appoint 323 00:17:21,540 --> 00:17:26,100 Sean Aylmer: his own, quote, " real special prosecutor," end quote, to, and 324 00:17:26,760 --> 00:17:30,930 Sean Aylmer: I quote again, " go after," end quote, Joe Biden and 325 00:17:30,930 --> 00:17:33,510 Sean Aylmer: his, quote again, " crime family." 326 00:17:35,550 --> 00:17:38,340 Michael Thompson: The quotes just add so much color to this story. 327 00:17:38,820 --> 00:17:42,810 Sean Aylmer: Incredible. The increasingly tense atmosphere leading into Trump's arraignment in 328 00:17:42,810 --> 00:17:46,380 Sean Aylmer: Florida has already raised concerns about protests and violence during 329 00:17:46,380 --> 00:17:49,350 Sean Aylmer: his first public rally since his federal indictment was unsealed. 330 00:17:49,619 --> 00:17:52,620 Sean Aylmer: Trump, over the weekend, declared that our people are angry 331 00:17:52,830 --> 00:17:56,579 Sean Aylmer: and a final battle is underway to save the country. 332 00:17:57,450 --> 00:17:59,369 Sean Aylmer: Well, you can't ever say that he understates it. 333 00:17:59,850 --> 00:18:03,030 Michael Thompson: Oh, no, no, no. You know exactly what he means and 334 00:18:03,030 --> 00:18:04,350 Michael Thompson: he knows how to get a headline. 335 00:18:04,560 --> 00:18:06,300 Sean Aylmer: Yeah. Yeah, and we're giving it to him. 336 00:18:06,810 --> 00:18:10,260 Michael Thompson: Oh, absolutely. Now, Sean, the story that we mentioned at 337 00:18:10,260 --> 00:18:11,910 Michael Thompson: the top of the show, I've been waiting for this 338 00:18:11,910 --> 00:18:15,599 Michael Thompson: one, Apple shares hit their first all time high in 339 00:18:15,599 --> 00:18:20,070 Michael Thompson: more than a year yesterday, demonstrating just how important big 340 00:18:20,070 --> 00:18:22,350 Michael Thompson: tech is to the current rally on Wall Street. 341 00:18:22,710 --> 00:18:26,520 Sean Aylmer: We talked about this in Monday's show, but it's worth 342 00:18:26,520 --> 00:18:29,820 Sean Aylmer: having a look at Apple specifically. It's now worth 2. 343 00:18:30,119 --> 00:18:35,850 Sean Aylmer: 9 trillion US dollars and it accounts for 7% of 344 00:18:35,850 --> 00:18:39,930 Sean Aylmer: the whole S& P 500. The S& P 500 or the US 345 00:18:39,930 --> 00:18:43,320 Sean Aylmer: market is about 40% of global equities. So if you 346 00:18:43,320 --> 00:18:47,220 Sean Aylmer: do the maths there, I think that's 2. 8% of all 347 00:18:47,340 --> 00:18:52,709 Sean Aylmer: global equities is Apple. It's quite remarkable. Its share price 348 00:18:52,709 --> 00:18:55,350 Sean Aylmer: is up more than 40% this year. Now because of 349 00:18:55,350 --> 00:18:58,020 Sean Aylmer: the most recent surge is the launch of its Vision 350 00:18:58,020 --> 00:19:01,920 Sean Aylmer: Pro mixed reality headset last week. The stock, though, is 351 00:19:01,920 --> 00:19:05,400 Sean Aylmer: a favorite no matter what economic circumstance, it's viewed as 352 00:19:05,400 --> 00:19:08,400 Sean Aylmer: a safe haven amid turmoil in the banking sector earlier 353 00:19:08,400 --> 00:19:11,730 Sean Aylmer: this year, for example, while its recent results have topped 354 00:19:11,730 --> 00:19:15,990 Sean Aylmer: expectations and eased concerns about its growth prospects. The value 355 00:19:15,990 --> 00:19:18,388 Sean Aylmer: of Apple is worth more than the value of the 356 00:19:18,390 --> 00:19:22,560 Sean Aylmer: superannuation industry in Australia combined, if you add in Microsoft 357 00:19:22,830 --> 00:19:27,599 Sean Aylmer: and Alphabet, the parent of Google, those three combined value 358 00:19:27,960 --> 00:19:31,230 Sean Aylmer: is more than the value of all the residential homes 359 00:19:31,619 --> 00:19:34,500 Sean Aylmer: across Australia. Remarkable. 360 00:19:35,190 --> 00:19:37,350 Michael Thompson: Everything about that story is extraordinary. 361 00:19:38,040 --> 00:19:41,789 Sean Aylmer: And Michael, we do have a weekend edition, I've got 362 00:19:41,790 --> 00:19:44,909 Sean Aylmer: my hand up for the most remarkable story. That's it. 363 00:19:45,509 --> 00:19:46,710 Michael Thompson: Oh, that's not fair. 364 00:19:46,859 --> 00:19:48,750 Sean Aylmer: I just got in first because you would've if you'd 365 00:19:48,750 --> 00:19:49,198 Sean Aylmer: thought of it. 366 00:19:52,140 --> 00:19:54,930 Michael Thompson: Okay. Anyone who's listened to the weekend edition at any 367 00:19:54,930 --> 00:19:57,450 Michael Thompson: point in recent weeks, knows how much I am the 368 00:19:57,450 --> 00:20:01,049 Michael Thompson: underdog in what is a ferocious competition between the two 369 00:20:01,049 --> 00:20:04,260 Michael Thompson: of us. And Sean, every week you just keep pummeling 370 00:20:04,260 --> 00:20:06,388 Michael Thompson: me. And this week I thought, you know what, I'm 371 00:20:06,388 --> 00:20:08,640 Michael Thompson: going to use this Apple story, I reckon it's what 372 00:20:08,640 --> 00:20:12,540 Michael Thompson: I need. And what did you do? You pummeled me again. 373 00:20:13,440 --> 00:20:15,000 Sean Aylmer: Yeah, no, I don't buy any of that. You just 374 00:20:15,000 --> 00:20:15,930 Sean Aylmer: made that up on the spot. 375 00:20:16,290 --> 00:20:18,958 Michael Thompson: Okay. Maybe a little bit. Sean, up next is the 376 00:20:18,960 --> 00:20:21,929 Michael Thompson: Fear & Greed daily interview. You are speaking today with Sameer 377 00:20:21,929 --> 00:20:25,439 Michael Thompson: Chopra, head of research at CBRE, which is a supporter 378 00:20:25,439 --> 00:20:26,188 Michael Thompson: of this podcast. 379 00:20:26,609 --> 00:20:29,129 Sean Aylmer: Yes. All about what's going to happen in the housing 380 00:20:29,130 --> 00:20:31,770 Sean Aylmer: market. Good news, I think, if you own a house 381 00:20:31,770 --> 00:20:35,489 Sean Aylmer: in inner city, particularly apartments in Sydney, Melbourne and Brisbane, 382 00:20:36,150 --> 00:20:37,800 Sean Aylmer: perhaps not if you're trying to get into that market. 383 00:20:38,099 --> 00:20:40,080 Michael Thompson: Yeah, it's definitely worth a listen, it's up next in 384 00:20:40,080 --> 00:20:43,649 Michael Thompson: the Fear & Greed playlist on your podcast platform or at fearandgreed. com. 385 00:20:44,099 --> 00:20:46,560 Michael Thompson: au. And Sean, there's a new episode today, being Wednesday 386 00:20:46,560 --> 00:20:50,430 Michael Thompson: of course, of How Do They Afford That, our sister podcast. 387 00:20:50,609 --> 00:20:51,270 Sean Aylmer: What's it about? 388 00:20:51,780 --> 00:20:54,779 Michael Thompson: Today, it's actually all about cars and it's about car 389 00:20:54,780 --> 00:20:58,138 Michael Thompson: loans and it's about car leases and just kind of 390 00:20:58,170 --> 00:21:00,510 Michael Thompson: going through what you need to be thinking about before 391 00:21:00,510 --> 00:21:03,600 Michael Thompson: you kind of dive in and perhaps get one of 392 00:21:03,600 --> 00:21:06,810 Michael Thompson: those. Because really, cars are one of those topics that 393 00:21:06,810 --> 00:21:09,119 Michael Thompson: you do look at someone else's car and you ask 394 00:21:09,119 --> 00:21:12,448 Michael Thompson: that question, how do they afford that? And chances are 395 00:21:12,450 --> 00:21:14,968 Michael Thompson: they're not actually buying it outright. They might have it 396 00:21:14,969 --> 00:21:17,609 Michael Thompson: on finance or they might have a lease agreement through 397 00:21:17,609 --> 00:21:20,638 Michael Thompson: their workplace, and we just explore basically how they work 398 00:21:20,640 --> 00:21:22,440 Michael Thompson: and how you could potentially use one of those two. 399 00:21:23,100 --> 00:21:25,320 Michael Thompson: I personally think it's well worth a listen. 400 00:21:25,380 --> 00:21:27,269 Sean Aylmer: I'm sure it is. I'm sure it is. Now, just before we 401 00:21:27,510 --> 00:21:29,158 Sean Aylmer: go, can I just jump in? I've got a message 402 00:21:29,160 --> 00:21:31,408 Sean Aylmer: on LinkedIn from Jack and I got to read it 403 00:21:31,410 --> 00:21:35,670 Sean Aylmer: to you, Michael. " Hi Sean. My name is Jack and I'm a 23- year- 404 00:21:35,670 --> 00:21:39,240 Sean Aylmer: old science nerd who listens to the Fear & Greed podcast 405 00:21:39,270 --> 00:21:41,970 Sean Aylmer: every day on the bus to university. I just wanted 406 00:21:41,970 --> 00:21:44,730 Sean Aylmer: to thank you and Michael for brightening my mornings with 407 00:21:44,730 --> 00:21:48,809 Sean Aylmer: your sort of witty puns and fantastic updates on all 408 00:21:48,809 --> 00:21:51,929 Sean Aylmer: things business. All the best, Jack." Oh, he gets our 409 00:21:51,929 --> 00:21:53,550 Sean Aylmer: Mia Award for the day. 410 00:21:54,029 --> 00:21:57,180 Michael Thompson: I mean, that's amazing, Jack, 23 year old science nerd. 411 00:21:57,450 --> 00:21:59,640 Michael Thompson: He should be listening to the weekend edition because I 412 00:21:59,640 --> 00:22:03,030 Michael Thompson: bust out some great kind of science and space stories 413 00:22:03,030 --> 00:22:03,960 Michael Thompson: and things like that. 414 00:22:04,200 --> 00:22:06,899 Sean Aylmer: I love the way he goes, " With your ( sort of) 415 00:22:07,559 --> 00:22:08,460 Sean Aylmer: witty puns. 416 00:22:08,670 --> 00:22:10,379 Michael Thompson: Yeah, I was trying to gloss over that part and 417 00:22:10,379 --> 00:22:11,850 Michael Thompson: then he was full of praise for the part that 418 00:22:11,850 --> 00:22:14,160 Michael Thompson: you contribute, which is the business. 419 00:22:14,910 --> 00:22:16,740 Sean Aylmer: Fantastic. Oh, you're right. Go Jack. 420 00:22:17,310 --> 00:22:19,619 Michael Thompson: Yeah. Good one, Jack, thank you very much for listening 421 00:22:19,619 --> 00:22:20,490 Michael Thompson: and thank you, Sean. 422 00:22:20,730 --> 00:22:21,420 Sean Aylmer: Thank you, Michael. 423 00:22:21,480 --> 00:22:24,540 Michael Thompson: It's Wednesday, the 14th of June, 2023. Make sure you're 424 00:22:24,540 --> 00:22:28,350 Michael Thompson: following the podcast and join us online on LinkedIn, Instagram, Twitter, 425 00:22:28,350 --> 00:22:31,200 Michael Thompson: and Facebook. I'm Michael Thompson and that was Fear & Greed. 426 00:22:31,439 --> 00:22:32,070 Michael Thompson: Have a great day.