1 00:00:03,870 --> 00:00:07,410 Michael Thompson: House prices rose in every capital city across the country 2 00:00:07,410 --> 00:00:10,168 Michael Thompson: in May. As the rebound in the mortgage market gathers 3 00:00:10,170 --> 00:00:14,549 Michael Thompson: steam, the ASX tumbles as inflation figures hint at another 4 00:00:14,549 --> 00:00:18,090 Michael Thompson: rate rise and Reserve Bank governor Phil Lowe warns that 5 00:00:18,090 --> 00:00:21,630 Michael Thompson: the rental market may get even tougher. It's Thursday, the 1st 6 00:00:21,960 --> 00:00:25,349 Michael Thompson: of June, 2023. Welcome to Fear and Greed, Australia's most 7 00:00:25,350 --> 00:00:29,340 Michael Thompson: popular business podcast. I'm Michael Thompson, and good morning, Sean Aylmer. 8 00:00:29,700 --> 00:00:33,659 Sean Aylmer: Good morning, Michael. Now tell me, you've got the chat today. 9 00:00:33,780 --> 00:00:36,689 Michael Thompson: Yeah, I can never accuse you, Sean, of being driven 10 00:00:36,690 --> 00:00:39,720 Michael Thompson: by self- interest because today's interview is largely driven by 11 00:00:39,720 --> 00:00:41,729 Michael Thompson: my own self- interest, but it's self- interest for a 12 00:00:41,729 --> 00:00:46,079 Michael Thompson: good cause. We're speaking to Mike Wilson, OAM, who is 13 00:00:46,380 --> 00:00:51,269 Michael Thompson: the chief executive of JDRF Australia, which is essentially an 14 00:00:51,269 --> 00:00:55,080 Michael Thompson: advocacy body that's representing people with Type 1 diabetes, which 15 00:00:55,080 --> 00:00:58,800 Michael Thompson: is something that affects our family. And so we talked 16 00:00:58,800 --> 00:01:03,240 Michael Thompson: about, that organization delivered a masterclass in political advocacy last 17 00:01:03,240 --> 00:01:07,559 Michael Thompson: year, securing a commitment from both sides of politics before 18 00:01:07,559 --> 00:01:12,209 Michael Thompson: the federal election in guaranteeing funding for some technology that 19 00:01:12,209 --> 00:01:15,030 Michael Thompson: would change the lives of people with Type 1 diabetes. 20 00:01:15,030 --> 00:01:18,120 Michael Thompson: And we talked to Mike about how they managed to 21 00:01:18,120 --> 00:01:20,699 Michael Thompson: do that, and it is really quite an impressive story. 22 00:01:20,910 --> 00:01:25,559 Michael Thompson: But also, it is today the JDRF Giving Day, where 23 00:01:25,559 --> 00:01:29,040 Michael Thompson: every donation that is made to JDRF today is matched 24 00:01:29,069 --> 00:01:32,040 Michael Thompson: dollar for dollar. And that is the real reason for 25 00:01:32,040 --> 00:01:33,120 Michael Thompson: the conversation today. 26 00:01:33,120 --> 00:01:34,619 Sean Aylmer: So where do I go, if I want to give 27 00:01:34,620 --> 00:01:36,060 Sean Aylmer: to JDRF, where do I go? 28 00:01:36,180 --> 00:01:41,518 Michael Thompson: You go to jdrf.org.au and it is, yeah, matched dollar 29 00:01:41,520 --> 00:01:44,040 Michael Thompson: for dollar all the way up to a million dollars. 30 00:01:44,309 --> 00:01:46,110 Sean Aylmer: Well, now you're talking my language. 31 00:01:46,799 --> 00:01:48,660 Michael Thompson: Should you have a spare mill that you want to 32 00:01:48,690 --> 00:01:51,690 Michael Thompson: toss in, it will be matched dollar for dollar, because 33 00:01:51,690 --> 00:01:56,820 Michael Thompson: of some extraordinarily generous sponsors and partners of the organization. 34 00:01:56,820 --> 00:01:59,940 Michael Thompson: So it is a fantastic day to really drive that 35 00:01:59,940 --> 00:02:03,599 Michael Thompson: donation dollar even further. And look, it was a really 36 00:02:03,599 --> 00:02:06,540 Michael Thompson: good chat with Mike about the impact that it has, 37 00:02:06,750 --> 00:02:09,300 Michael Thompson: that Type 1 diabetes has on families, because it really 38 00:02:09,300 --> 00:02:12,480 Michael Thompson: does affect, mostly comes on in children, really. And that's 39 00:02:12,480 --> 00:02:15,750 Michael Thompson: what happened in our household when our son was two 40 00:02:15,750 --> 00:02:18,599 Michael Thompson: and a half, and the conversation goes through all of 41 00:02:18,599 --> 00:02:20,429 Michael Thompson: that, and so it's worth a listen. It's worth sticking 42 00:02:20,429 --> 00:02:22,649 Michael Thompson: around for, but I've talked enough about it now, Sean. 43 00:02:22,980 --> 00:02:25,168 Michael Thompson: A quick plug before we go on for our Instagram 44 00:02:25,320 --> 00:02:28,710 Michael Thompson: as well. Jump on there. We've been really busy on 45 00:02:28,710 --> 00:02:31,530 Michael Thompson: the social media this week, and we've got a bit 46 00:02:31,530 --> 00:02:34,049 Michael Thompson: of a video up there now as well that explores 47 00:02:34,410 --> 00:02:36,450 Michael Thompson: our road trip last week. 48 00:02:36,960 --> 00:02:39,149 Sean Aylmer: Oh, you didn't. Really? 49 00:02:39,419 --> 00:02:40,350 Michael Thompson: Yeah, yeah. 50 00:02:40,410 --> 00:02:41,160 Sean Aylmer: Oh dear. 51 00:02:41,459 --> 00:02:43,530 Michael Thompson: I did some candid shots I took of you, Sean, 52 00:02:43,530 --> 00:02:46,290 Michael Thompson: so it's worth checking out Fear and Greed Podcast on 53 00:02:46,290 --> 00:02:48,780 Michael Thompson: Instagram. You'll see that video up there, now. But the 54 00:02:48,780 --> 00:02:52,530 Michael Thompson: main story this morning, Sean, house prices across capital cities 55 00:02:52,530 --> 00:02:56,910 Michael Thompson: jumped by 1. 2% during May, with Sydney prices now 56 00:02:56,910 --> 00:03:00,030 Michael Thompson: up nearly 5% since their lows and Melbourne up nearly 2%. 57 00:03:01,080 --> 00:03:04,320 Sean Aylmer: The housing market has turned. No doubt about it. Whether 58 00:03:04,320 --> 00:03:07,710 Sean Aylmer: it can keep going and not reverse is still an 59 00:03:07,710 --> 00:03:11,099 Sean Aylmer: open question, though. It was the third consecutive monthly rise 60 00:03:11,099 --> 00:03:14,429 Sean Aylmer: from Core Logics National Home Value Index and the acceleration 61 00:03:14,429 --> 00:03:18,299 Sean Aylmer: is much faster than March and April. Last month, Sydney 62 00:03:18,330 --> 00:03:22,108 Sean Aylmer: prices led the way, up 1. 8%. Now that's the highest 63 00:03:22,169 --> 00:03:28,380 Sean Aylmer: monthly gain since September 2021. The median dwelling in that 64 00:03:28,380 --> 00:03:32,429 Sean Aylmer: city is now up nearly $50, 000 since the January lows. 65 00:03:32,700 --> 00:03:36,270 Sean Aylmer: Brisbane prices last month jumped 1. 4%, while Perth homes 66 00:03:36,270 --> 00:03:40,170 Sean Aylmer: rose in value by 1. 3%. While they were the 67 00:03:40,170 --> 00:03:43,230 Sean Aylmer: only other capital cities to rise by more than 1%, the 68 00:03:43,230 --> 00:03:47,790 Sean Aylmer: price of homes in every single capital city increased. Quite 69 00:03:47,790 --> 00:03:51,749 Sean Aylmer: remarkable. Regional prices also rose for the third consecutive month, 70 00:03:51,750 --> 00:03:55,050 Sean Aylmer: though at half percent. That's not quite the same pace 71 00:03:55,050 --> 00:03:58,020 Sean Aylmer: as the capital cities. Perth is the only capital city 72 00:03:58,050 --> 00:04:02,190 Sean Aylmer: now where dwelling values have returned to record highs. Hobart 73 00:04:02,190 --> 00:04:05,759 Sean Aylmer: values remain nearly 13% below their peaks, in Melbourne the 74 00:04:05,759 --> 00:04:09,780 Sean Aylmer: drop from peak to now is 8%. In Brisbane it's 9%, 75 00:04:09,780 --> 00:04:13,500 Sean Aylmer: and in Sydney it's 10%. So while Sydney's doing very 76 00:04:13,500 --> 00:04:15,180 Sean Aylmer: well, still has a ways to go. 77 00:04:16,290 --> 00:04:19,650 Michael Thompson: Double barrelled question for you, Sean. One looking back, one 78 00:04:19,650 --> 00:04:24,360 Michael Thompson: looking forward. Why has this happened, and will it continue? 79 00:04:24,870 --> 00:04:28,379 Sean Aylmer: Yeah, great questions. Low levels of housing supply and strong 80 00:04:28,529 --> 00:04:32,520 Sean Aylmer: levels of demand, not least because of increased immigration, are 81 00:04:32,520 --> 00:04:36,360 Sean Aylmer: pushing prices higher. For this time of the year, inventories 82 00:04:36,420 --> 00:04:39,630 Sean Aylmer: are 15% lower than they were last year. They're 24% 83 00:04:39,630 --> 00:04:42,300 Sean Aylmer: lower than long- term average. So we have more migrants 84 00:04:42,300 --> 00:04:47,430 Sean Aylmer: and people looking for homes, fewer houses out there. Also, 85 00:04:47,430 --> 00:04:50,039 Sean Aylmer: there's a bit of FOMO going on and auction clearance 86 00:04:50,040 --> 00:04:53,580 Sean Aylmer: rates are strong, so that's encouraging people who fear about 87 00:04:53,580 --> 00:04:56,729 Sean Aylmer: missing out. Much harder question though, about whether it will 88 00:04:56,730 --> 00:04:59,639 Sean Aylmer: continue. House prices won't keep growing at plus 1% per 89 00:04:59,639 --> 00:05:03,660 Sean Aylmer: month. That's just ridiculous. And if we get another rate 90 00:05:03,660 --> 00:05:08,520 Sean Aylmer: rise next week, which is looking increasingly likely, then that 91 00:05:08,520 --> 00:05:12,779 Sean Aylmer: could curtail growth. But, there's plenty of other factors to 92 00:05:12,779 --> 00:05:15,659 Sean Aylmer: throw into the mix. Housing supply and immigration I just 93 00:05:15,660 --> 00:05:19,409 Sean Aylmer: mentioned. They're the two big ones. I don't think anyone 94 00:05:19,410 --> 00:05:22,140 Sean Aylmer: can confidently say what's going to happen to the market. Michael? 95 00:05:23,190 --> 00:05:25,529 Michael Thompson: Sean, there's so much in this and so much to 96 00:05:25,800 --> 00:05:28,229 Michael Thompson: dive into. I think it's probably worth talking to Tim 97 00:05:28,230 --> 00:05:30,240 Michael Thompson: Lawless from Call Logic tomorrow- 98 00:05:30,240 --> 00:05:30,390 Sean Aylmer: I think we should, yeah, yeah. 99 00:05:30,390 --> 00:05:33,690 Michael Thompson: ... About this. Because he always just does such a 100 00:05:33,690 --> 00:05:37,049 Michael Thompson: great job of explaining that, not just what is happening 101 00:05:37,049 --> 00:05:40,080 Michael Thompson: but the logic behind it, if there is in fact 102 00:05:40,080 --> 00:05:42,299 Michael Thompson: logic behind it at all. So we might tee that 103 00:05:42,299 --> 00:05:45,390 Michael Thompson: one up for tomorrow. So obviously big day for the 104 00:05:45,390 --> 00:05:48,180 Michael Thompson: housing market. Big day as well for the equity market, yesterday. 105 00:05:48,360 --> 00:05:55,049 Sean Aylmer: Sure was. The S&P/ASX 200 tumbled 1. 6% down to 7, 091 106 00:05:55,049 --> 00:05:57,959 Sean Aylmer: points. Now that's back to late March levels and only 107 00:05:57,960 --> 00:06:01,469 Sean Aylmer: just above where the boar started the year. Weak economic 108 00:06:01,470 --> 00:06:05,430 Sean Aylmer: data out of China and surprisingly strong inflation figures, both 109 00:06:05,430 --> 00:06:07,860 Sean Aylmer: of which I'll talk about in a moment, weighed heavily 110 00:06:07,860 --> 00:06:11,160 Sean Aylmer: on stocks. The China data hit the big iron ore 111 00:06:11,160 --> 00:06:15,029 Sean Aylmer: miners hard, they of course export to China. Now BHP 112 00:06:15,029 --> 00:06:18,779 Sean Aylmer: was down 3.4%, and Fortescue metals was off 3% and 113 00:06:18,779 --> 00:06:22,169 Sean Aylmer: Rio was down 2%, but it was pretty widespread. Commonwealth 114 00:06:22,170 --> 00:06:25,650 Sean Aylmer: Bank, Westbank and ANZ all fell around 2%. Wes Farmers was off 115 00:06:25,650 --> 00:06:30,089 Sean Aylmer: 3.3%. The energy sector did worst while materials and financials 116 00:06:30,089 --> 00:06:33,510 Sean Aylmer: weren't far behind. Only tech stocks ended in the black 117 00:06:33,809 --> 00:06:36,630 Sean Aylmer: and only just. It's a rough day for the coal miners in 118 00:06:36,630 --> 00:06:40,980 Sean Aylmer: particular, after the price of the sedimentary rock fell sharply 119 00:06:40,980 --> 00:06:44,159 Sean Aylmer: on Tuesday, Whitehaven was the worst for the top 200 120 00:06:44,279 --> 00:06:47,339 Sean Aylmer: yesterday, down nearly 6%, New Hope was off more than 121 00:06:47,339 --> 00:06:50,670 Sean Aylmer: 4%. Just a very, very rough day, with about three 122 00:06:50,670 --> 00:06:53,879 Sean Aylmer: quarters of the top 200 dropping. Michael, I'd say a 123 00:06:53,879 --> 00:06:55,349 Sean Aylmer: proverbial sea of red. 124 00:06:55,650 --> 00:06:58,979 Michael Thompson: Oh, you and your seas of red. I have never 125 00:06:58,980 --> 00:07:02,730 Michael Thompson: heard coal described as the sedimentary rock before, but I 126 00:07:02,730 --> 00:07:04,500 Michael Thompson: mean, geologically it's accurate. 127 00:07:07,320 --> 00:07:09,058 Sean Aylmer: It is. So I had to check out, I didn't want to use the word " coal" twice in 128 00:07:09,059 --> 00:07:11,760 Sean Aylmer: the same sentence, which is a real journalism trick. And 129 00:07:11,760 --> 00:07:14,760 Sean Aylmer: so I was trying to find a descriptor for coal, and 130 00:07:14,760 --> 00:07:16,530 Sean Aylmer: I mean I'm sure there's lots of better ones, but 131 00:07:16,710 --> 00:07:18,780 Sean Aylmer: it's actually a sedimentary rock. I wasn't sure whether it 132 00:07:18,780 --> 00:07:21,540 Sean Aylmer: was a metal or not. It's not. It's a sedimentary rock. 133 00:07:21,870 --> 00:07:24,870 Michael Thompson: Okay. Well, I mean you talked about this before, that 134 00:07:24,870 --> 00:07:29,279 Michael Thompson: one of the greatest challenges in your journalistic career is 135 00:07:29,279 --> 00:07:31,859 Michael Thompson: trying to find enough different ways to describe the same 136 00:07:31,859 --> 00:07:35,490 Michael Thompson: thing. And so now you've used sedimentary rock to describe coal. 137 00:07:36,360 --> 00:07:37,770 Sean Aylmer: I think I'll try something else next time. 138 00:07:37,980 --> 00:07:42,269 Michael Thompson: Yeah, please. You mentioned the monthly inflation figures. What happened? 139 00:07:42,750 --> 00:07:44,520 Michael Thompson: Yesterday was such a massive day, wasn't it? 140 00:07:44,910 --> 00:07:48,509 Sean Aylmer: So much going on. Basically the monthly inflation figures weren't 141 00:07:48,540 --> 00:07:51,870 Sean Aylmer: encouraging for those of us, most of us, hoping that 142 00:07:51,870 --> 00:07:55,290 Sean Aylmer: the heat has come out of price rises. Annual inflation 143 00:07:55,290 --> 00:07:58,530 Sean Aylmer: hit 6. 8% for the 12 months to the end 144 00:07:58,590 --> 00:08:02,009 Sean Aylmer: of April, up from 6. 3% a month earlier and 145 00:08:02,009 --> 00:08:05,309 Sean Aylmer: well above expectations. Without the volatile items, it came in 146 00:08:05,309 --> 00:08:08,790 Sean Aylmer: at 6.5%. Now the high number is partly because 12 147 00:08:08,790 --> 00:08:12,720 Sean Aylmer: months ago the figure was low after the fuel excise 148 00:08:12,780 --> 00:08:16,230 Sean Aylmer: was halved. That flowed through to this month, so we 149 00:08:16,230 --> 00:08:19,410 Sean Aylmer: expected it to be high. But still, housing, food and non- 150 00:08:19,410 --> 00:08:25,140 Sean Aylmer: alcoholic beverages, transport, recreation, culture prices, all rose really sharply. 151 00:08:25,470 --> 00:08:29,220 Sean Aylmer: The good news is the trend for inflation is down. 152 00:08:29,640 --> 00:08:34,410 Sean Aylmer: The bad news is, it's still way too high with 153 00:08:34,410 --> 00:08:40,260 Sean Aylmer: rising wages sure to keep pressure on prices. Bond markets, 154 00:08:40,440 --> 00:08:44,010 Sean Aylmer: who I would say are the best predictors of inflation, 155 00:08:44,190 --> 00:08:48,270 Sean Aylmer: have now priced in another 25 basis point rise next 156 00:08:48,270 --> 00:08:50,280 Sean Aylmer: week. Not something to look forward to. 157 00:08:50,520 --> 00:08:54,090 Michael Thompson: No. Why are they such a good predictor of rate rises? 158 00:08:54,450 --> 00:08:57,569 Sean Aylmer: Well, I think it's because they're actually put their money 159 00:08:57,570 --> 00:08:59,429 Sean Aylmer: where their mouth is. So we can talk about what's 160 00:08:59,429 --> 00:09:01,949 Sean Aylmer: going to happen, but these guys are investing money and 161 00:09:01,950 --> 00:09:03,330 Sean Aylmer: so they're pretty serious about it. 162 00:09:03,360 --> 00:09:07,470 Michael Thompson: Okay. And finally, you mentioned the Chinese data before. What 163 00:09:07,470 --> 00:09:08,338 Michael Thompson: was that all about? 164 00:09:08,700 --> 00:09:12,870 Sean Aylmer: Well, Chinese manufacturing activity shrunk for the second straight month 165 00:09:12,929 --> 00:09:16,199 Sean Aylmer: in May. That didn't help the iron ore miners, nor 166 00:09:16,199 --> 00:09:18,929 Sean Aylmer: did it help the Aussie dollar, which yesterday fell below 167 00:09:18,929 --> 00:09:23,640 Sean Aylmer: 65 US cents. Oil prices also fell. The bottom line 168 00:09:23,640 --> 00:09:27,059 Sean Aylmer: for commodity prices at the moment is that worries about 169 00:09:27,059 --> 00:09:30,988 Sean Aylmer: the global economic recovery, particularly in China and the USA, 170 00:09:31,080 --> 00:09:34,289 Sean Aylmer: are weighing down on prices, and that's also weighing on 171 00:09:34,289 --> 00:09:34,860 Sean Aylmer: the Aussie dollar. 172 00:09:35,520 --> 00:09:37,588 Michael Thompson: Okay, there is so much going on. We'll be back 173 00:09:37,590 --> 00:09:39,360 Michael Thompson: in a moment with the rest of the day's business 174 00:09:39,360 --> 00:09:48,598 Michael Thompson: news. Sean, Reserve Bank governor Philip Lowe was in front 175 00:09:48,599 --> 00:09:52,139 Michael Thompson: of senate estimates yesterday and the discussion seemed to range 176 00:09:52,230 --> 00:09:55,500 Michael Thompson: well beyond economics with the Central Bank boss saying that 177 00:09:55,500 --> 00:09:59,850 Michael Thompson: PWC won't be doing work for the Central Bank anytime soon. 178 00:10:00,330 --> 00:10:02,670 Sean Aylmer: Yes. Now Phil Lowe mostly sticks to his knitting when 179 00:10:02,670 --> 00:10:06,389 Sean Aylmer: it comes to public commentary, but yesterday he was more 180 00:10:06,509 --> 00:10:09,870 Sean Aylmer: broad reaching. If he doesn't get reappointed in September, which 181 00:10:09,870 --> 00:10:14,189 Sean Aylmer: I think it's unlikely that he'll get reappointed, then yesterday 182 00:10:14,190 --> 00:10:17,458 Sean Aylmer: was his last Senate estimates hearing, so why not go 183 00:10:17,460 --> 00:10:20,070 Sean Aylmer: off with a bang? We'll start with the economics, so 184 00:10:20,070 --> 00:10:23,400 Sean Aylmer: Lowe said, inflation in the labor intensive services sector is 185 00:10:23,400 --> 00:10:27,000 Sean Aylmer: proving persistent, because low productivity and high wages growth are 186 00:10:27,150 --> 00:10:31,290 Sean Aylmer: driving up unit labor costs. He said productivity is key 187 00:10:31,320 --> 00:10:34,800 Sean Aylmer: to how a nation becomes wealthier. Well, that's fine, but 188 00:10:34,800 --> 00:10:37,439 Sean Aylmer: really you boil that down, that sounds like he's thinking 189 00:10:37,440 --> 00:10:40,230 Sean Aylmer: about another rate hike. He also said he expects rent 190 00:10:40,230 --> 00:10:43,620 Sean Aylmer: inflation to reach close to 10%. Now that would be 191 00:10:43,620 --> 00:10:47,669 Sean Aylmer: the highest rate since 1989. It's going to stay elevated 192 00:10:47,670 --> 00:10:50,880 Sean Aylmer: for some time, mostly due to the lack of supply. 193 00:10:50,880 --> 00:10:53,130 Sean Aylmer: And we talked about that in the top story. While the 194 00:10:53,130 --> 00:10:56,849 Sean Aylmer: population is increasing by 2%, the housing stock is definitely 195 00:10:56,849 --> 00:10:59,610 Sean Aylmer: not. The Reserve Bank governor also came out and part 196 00:10:59,610 --> 00:11:01,740 Sean Aylmer: of the reason it's not is because of all the 197 00:11:01,740 --> 00:11:05,069 Sean Aylmer: regulations around housing. He didn't quite say he didn't like 198 00:11:05,070 --> 00:11:07,559 Sean Aylmer: those regulations, but that was definitely the inference. 199 00:11:08,490 --> 00:11:10,588 Michael Thompson: Sean, working in radio, one of the best things whenever 200 00:11:10,590 --> 00:11:13,290 Michael Thompson: you had a guest on was that obviously answer all 201 00:11:13,290 --> 00:11:16,440 Michael Thompson: the questions relating to, say, their portfolio if it was 202 00:11:16,440 --> 00:11:19,199 Michael Thompson: a politician, but did often get the best headlines when 203 00:11:19,200 --> 00:11:22,739 Michael Thompson: they did veer off course slightly, and start going into 204 00:11:23,279 --> 00:11:26,070 Michael Thompson: other areas where you wouldn't normally hear their opinions. So, 205 00:11:26,580 --> 00:11:28,950 Michael Thompson: what did he say away from the economy? 206 00:11:29,280 --> 00:11:32,099 Sean Aylmer: Ah, there's plenty in it. Moving on to mortgage holders, the 207 00:11:32,099 --> 00:11:36,660 Sean Aylmer: banks figure suggested about 15% of variable rate owner occupied 208 00:11:36,660 --> 00:11:39,749 Sean Aylmer: borrowers are likely to have negative spare cash flow by 209 00:11:39,750 --> 00:11:41,910 Sean Aylmer: the end of the year. Basically, that means they're going 210 00:11:41,910 --> 00:11:44,040 Sean Aylmer: to struggle to repay their home loans by the end 211 00:11:44,040 --> 00:11:47,160 Sean Aylmer: of the year, unless they pull back on consumption. When 212 00:11:47,160 --> 00:11:49,588 Sean Aylmer: Lowe was asked about spending in the recent federal budget, 213 00:11:49,590 --> 00:11:51,809 Sean Aylmer: he said that the extra money in the budget was 214 00:11:51,809 --> 00:11:55,679 Sean Aylmer: at the margin expansionary, but it didn't affect the interest 215 00:11:55,679 --> 00:11:59,160 Sean Aylmer: rate outlook. And on Price Waterhouse Coopers, which a bunch 216 00:11:59,458 --> 00:12:02,520 Sean Aylmer: of bureaucrats were asked about yesterday, all those in senate 217 00:12:02,520 --> 00:12:05,820 Sean Aylmer: estimates meetings, Lowe said he didn't want to work with 218 00:12:05,820 --> 00:12:10,769 Sean Aylmer: any organization that doesn't meet rigorous integrity standards. I. e., 219 00:12:11,070 --> 00:12:14,728 Sean Aylmer: PWC ain't getting a gig at the Reserve Bank anytime soon. 220 00:12:15,360 --> 00:12:18,750 Michael Thompson: Yeah, there were more revelations in the whole PWC scandal 221 00:12:18,750 --> 00:12:21,150 Michael Thompson: with the tax commissioner. One of those bureaucrats, as you 222 00:12:21,150 --> 00:12:25,890 Michael Thompson: mentioned, telling estimates that the consulting firm was behind 15 223 00:12:25,890 --> 00:12:30,150 Michael Thompson: schemes designed to help multinationals sidestep tax laws. 224 00:12:30,750 --> 00:12:32,429 Sean Aylmer: And of course at the heart of this scandal is 225 00:12:32,429 --> 00:12:36,809 Sean Aylmer: the fact that PWC having signed a confidentiality agreement, worked 226 00:12:36,809 --> 00:12:39,809 Sean Aylmer: with the government to design laws to capture more tax 227 00:12:39,809 --> 00:12:43,800 Sean Aylmer: from multinationals. Tax commissioner Chris Jordan said PWC put at 228 00:12:43,800 --> 00:12:47,670 Sean Aylmer: risk about 180 million in tax revenue a year, because 229 00:12:47,670 --> 00:12:51,750 Sean Aylmer: it used the confidential information it gained to advise clients. 230 00:12:51,750 --> 00:12:54,958 Sean Aylmer: He also accused PWC of frustrating the tax office in 231 00:12:54,960 --> 00:12:59,160 Sean Aylmer: its investigations into the schemes, a fair whack by the 232 00:12:59,160 --> 00:12:59,910 Sean Aylmer: tax commissioner. 233 00:13:00,420 --> 00:13:03,088 Michael Thompson: I reckon that's the best kind of summary then, Sean, 234 00:13:03,389 --> 00:13:05,730 Michael Thompson: of why this is so problematic, the fact that they 235 00:13:05,730 --> 00:13:08,790 Michael Thompson: helped design the laws to capture more attacks and then 236 00:13:08,790 --> 00:13:12,150 Michael Thompson: use that information to help them sidestep the same laws 237 00:13:12,150 --> 00:13:15,150 Michael Thompson: that were just designed. It's such a simple kind of 238 00:13:15,150 --> 00:13:16,830 Michael Thompson: way of looking at it and you just hear that 239 00:13:16,830 --> 00:13:19,110 Michael Thompson: and go, " Oh, that is not good." 240 00:13:19,500 --> 00:13:22,080 Sean Aylmer: Yeah. Yeah, that's in a nutshell, that's what it is. 241 00:13:22,650 --> 00:13:27,150 Michael Thompson: Now, Sean, the banking and superannuation watchdog APRA said it 242 00:13:27,150 --> 00:13:30,720 Michael Thompson: was being more active to ensure funds accurately reflect the 243 00:13:30,720 --> 00:13:33,870 Michael Thompson: value of their assets, including those unlisted assets. 244 00:13:34,140 --> 00:13:36,390 Sean Aylmer: Yeah, this is very important. So a superfund might own 245 00:13:36,390 --> 00:13:40,230 Sean Aylmer: an office tower, but it's not worth as much today 246 00:13:40,260 --> 00:13:43,290 Sean Aylmer: as it was a couple of years ago. And so, 247 00:13:43,380 --> 00:13:45,900 Sean Aylmer: the value of that on its balance sheet should be 248 00:13:45,900 --> 00:13:48,809 Sean Aylmer: lower, but it's not always, because it's hard to revalue 249 00:13:48,809 --> 00:13:52,110 Sean Aylmer: some of these things. The Australian Prudential Regulation Authority wants 250 00:13:52,110 --> 00:13:57,510 Sean Aylmer: to make sure superfunds' balance sheets reflect the proper value 251 00:13:57,870 --> 00:14:01,799 Sean Aylmer: of their assets. Speaking at Senate estimates, APRA also said 252 00:14:01,799 --> 00:14:06,179 Sean Aylmer: it is formally investigating industry superfunds' payments to unions, and 253 00:14:06,179 --> 00:14:10,530 Sean Aylmer: whether these are in members' best financial interests. Very good 254 00:14:10,530 --> 00:14:14,040 Sean Aylmer: question that. Funds payments to unions can flow through those 255 00:14:14,040 --> 00:14:17,340 Sean Aylmer: unions to political donations to labor or related political groups. 256 00:14:17,340 --> 00:14:20,790 Sean Aylmer: And that's under the microscope. Chair john Lonsdale said he 257 00:14:20,790 --> 00:14:24,360 Sean Aylmer: has no plans to hire PWC again, and it will 258 00:14:24,360 --> 00:14:27,930 Sean Aylmer: consider ethical concerns in any contracting decisions in the future. 259 00:14:28,230 --> 00:14:32,760 Sean Aylmer: And he defended the regulator's 3% serviceability buffer for new 260 00:14:32,760 --> 00:14:34,919 Sean Aylmer: home loans. That's the fact that when you get a 261 00:14:34,920 --> 00:14:38,490 Sean Aylmer: loan, if you have to pay 6%, the bank looks 262 00:14:38,490 --> 00:14:41,459 Sean Aylmer: and says, " can you repay 9%?" That serviceability buffer being 263 00:14:41,459 --> 00:14:44,460 Sean Aylmer: that 3%. He said it's basically a safeguard against higher 264 00:14:44,460 --> 00:14:45,090 Sean Aylmer: interest rates. 265 00:14:45,690 --> 00:14:49,830 Michael Thompson: Sean, Parliament was busy yesterday between question time, senate estimates 266 00:14:49,830 --> 00:14:52,589 Michael Thompson: and normal business. One bill that passed through the House 267 00:14:52,590 --> 00:14:56,219 Michael Thompson: of Reps was the Constitutional amendments bill establishing the Voice 268 00:14:56,219 --> 00:14:57,360 Michael Thompson: to Parliament referendum. 269 00:14:57,809 --> 00:15:00,209 Sean Aylmer: Well worth marking, I think it's a first step in 270 00:15:00,209 --> 00:15:02,250 Sean Aylmer: the process. And while the nationals and a handful of 271 00:15:02,250 --> 00:15:06,240 Sean Aylmer: liberal MPs opposed the bill, that passed easily with 121 272 00:15:06,240 --> 00:15:09,510 Sean Aylmer: votes for and 25 against. We've had out plenty of 273 00:15:09,510 --> 00:15:13,079 Sean Aylmer: stuff yesterday. For example, Australia has rebuffed requests to supply 274 00:15:13,080 --> 00:15:16,830 Sean Aylmer: Ukraine with Hawk High vehicles because of a breaking issue. 275 00:15:17,039 --> 00:15:20,400 Sean Aylmer: That's according to defense officials. And in something of a 276 00:15:20,430 --> 00:15:23,010 Sean Aylmer: bombshell later in the day, chief of the Defense Force, 277 00:15:23,010 --> 00:15:26,820 Sean Aylmer: Angus Campbell, said the US government warned allegations of war 278 00:15:26,820 --> 00:15:32,039 Sean Aylmer: crimes against Australian soldiers in Afghanistan could prevent the country's 279 00:15:32,130 --> 00:15:36,570 Sean Aylmer: armed forces working with Australia's SAS, the Special Air Service. 280 00:15:36,750 --> 00:15:39,840 Sean Aylmer: So the March 2021 letter warned the Burton report, which 281 00:15:39,840 --> 00:15:43,710 Sean Aylmer: detailed credible information that Australian soldiers had unlawfully killed 39 282 00:15:43,710 --> 00:15:47,850 Sean Aylmer: Afghan prisoners and civilians, could trigger a US law that 283 00:15:48,030 --> 00:15:51,299 Sean Aylmer: prevents the country's military working with units linked to gross 284 00:15:51,299 --> 00:15:53,129 Sean Aylmer: violations of human rights. 285 00:15:53,670 --> 00:15:56,490 Michael Thompson: And as well, the free trade agreement between Australia and 286 00:15:56,490 --> 00:15:58,140 Michael Thompson: the United Kingdom kicked in yesterday. 287 00:15:58,620 --> 00:16:01,020 Sean Aylmer: About 4 billion dollars of tariffs on imports have been 288 00:16:01,020 --> 00:16:04,170 Sean Aylmer: dropped, which should flow through to consumers, hopefully in lower 289 00:16:04,230 --> 00:16:07,710 Sean Aylmer: prices. And 99% of Australian exports to the UK are 290 00:16:07,710 --> 00:16:11,039 Sean Aylmer: now duty free. Assistant Minister for Trade, Tim Ayers said, 291 00:16:11,039 --> 00:16:15,390 Sean Aylmer: Australian producers of agricultural goods, wine, meat, grains, dairy, stuff 292 00:16:15,390 --> 00:16:18,000 Sean Aylmer: like that, would benefit from an increase in duty- free 293 00:16:18,000 --> 00:16:20,790 Sean Aylmer: quotas or the removal of tariffs. And just quickly before 294 00:16:20,790 --> 00:16:23,130 Sean Aylmer: we leave politics, we better mention that Western Australia has 295 00:16:23,130 --> 00:16:26,159 Sean Aylmer: a new premier. The deputy to outgoing Mark McGowan has 296 00:16:26,160 --> 00:16:29,699 Sean Aylmer: been confirmed by the Labor Party as the new leader. His 297 00:16:29,699 --> 00:16:33,180 Sean Aylmer: name is Roger Cook and his deputy will be Rita 298 00:16:33,180 --> 00:16:35,400 Sean Aylmer: Saffioti, she's the current transport minister. 299 00:16:36,510 --> 00:16:39,929 Michael Thompson: Sean, moving away now from politics, Bank of Queensland has 300 00:16:39,929 --> 00:16:44,040 Michael Thompson: been hit with enforceable undertakings by two regulators for failing 301 00:16:44,040 --> 00:16:47,490 Michael Thompson: to have sufficient anti- money laundering and risk management controls 302 00:16:47,490 --> 00:16:48,089 Michael Thompson: in place. 303 00:16:48,330 --> 00:16:51,090 Sean Aylmer: The announcement came just six months after the bank said 304 00:16:51,090 --> 00:16:56,010 Sean Aylmer: it wasn't being watched by regulators. One undertaking comes from 305 00:16:56,010 --> 00:16:59,790 Sean Aylmer: the Banking Oversight Agency, APRA, and the other from Financial 306 00:16:59,790 --> 00:17:03,900 Sean Aylmer: Crimes Watchdog AUSTRAC. APRA will also require Bank of Queensland 307 00:17:03,900 --> 00:17:06,750 Sean Aylmer: to hold $ 50 million in extra capital from this month 308 00:17:06,750 --> 00:17:09,450 Sean Aylmer: as part of the deal. Now, Bank of Queensland has 309 00:17:09,480 --> 00:17:13,438 Sean Aylmer: several breaches of a APRA's prudential standards over the past 18 310 00:17:13,440 --> 00:17:16,080 Sean Aylmer: months. That is a massive no- no in the banking 311 00:17:16,080 --> 00:17:19,200 Sean Aylmer: world, to breach those prudential standards. APRA said the bank 312 00:17:19,200 --> 00:17:23,339 Sean Aylmer: has acknowledged its past risk management and risk cultural weaknesses. 313 00:17:23,670 --> 00:17:27,180 Sean Aylmer: Bank of Queensland's share price fell nearly 5% yesterday after 314 00:17:27,180 --> 00:17:27,960 Sean Aylmer: the news came out. 315 00:17:28,530 --> 00:17:31,470 Michael Thompson: All right, finally, Sean, before we get to international news, 316 00:17:31,470 --> 00:17:35,759 Michael Thompson: an Australian garlic variety may be a preventative measure against 317 00:17:35,759 --> 00:17:38,100 Michael Thompson: COVID-19 and the common flu. 318 00:17:38,549 --> 00:17:41,549 Sean Aylmer: The research released by the Peter Doherty Institute shows that 319 00:17:41,549 --> 00:17:47,580 Sean Aylmer: a certain Australian- grown garlic variety demonstrates antiviral properties with up to 99. 320 00:17:47,580 --> 00:17:52,920 Sean Aylmer: 9% efficacy against the viruses, which cause COVID-19 and the common 321 00:17:52,920 --> 00:17:56,309 Sean Aylmer: flu. According to the financial review, the research which was 322 00:17:56,309 --> 00:18:01,350 Sean Aylmer: commissioned by the Australian Garlic Producers Organization, used garlic ingredients 323 00:18:01,350 --> 00:18:06,000 Sean Aylmer: extracted from exclusive Australian varieties. They're now being commercialized and 324 00:18:06,000 --> 00:18:08,580 Sean Aylmer: will be able to be taken as a soft capsule 325 00:18:08,580 --> 00:18:11,550 Sean Aylmer: supplement, something like vitamin C or a fish oil tablet. 326 00:18:11,609 --> 00:18:15,299 Sean Aylmer: I think they're also subject to a recently lodged international 327 00:18:15,299 --> 00:18:18,090 Sean Aylmer: patent. But there you go, garlic for a long time 328 00:18:18,090 --> 00:18:22,440 Sean Aylmer: has supposedly had medicinal purposes. I think heart mostly. Anyway, 329 00:18:22,830 --> 00:18:25,680 Sean Aylmer: sounds like the COVID- 19, the common flu, could be good 330 00:18:25,680 --> 00:18:26,369 Sean Aylmer: for them as well. 331 00:18:26,609 --> 00:18:30,239 Michael Thompson: There you go. International news now, Sean and Chipmaker, Nvidia 332 00:18:30,240 --> 00:18:36,089 Michael Thompson: Corporation's market valuation yesterday, major day, breached the 1 trillion 333 00:18:36,090 --> 00:18:39,840 Michael Thompson: US dollar threshold, becoming just the fifth company to do so. 334 00:18:40,080 --> 00:18:42,900 Sean Aylmer: The stock rose as much as 8% in Tuesday night 335 00:18:42,900 --> 00:18:46,500 Sean Aylmer: session on Wall Street, pushing Nvidia into that 1 trillion 336 00:18:46,500 --> 00:18:49,648 Sean Aylmer: US dollar territory. It then fell back on the close, 337 00:18:49,650 --> 00:18:54,450 Sean Aylmer: to actually close below that. Now, only four other companies, 338 00:18:54,450 --> 00:18:59,820 Sean Aylmer: Alphabet, Amazon, Apple, and Microsoft have trillion dollar valuations. Fewer 339 00:18:59,820 --> 00:19:04,020 Sean Aylmer: than 10 companies globally have achieved the distinction, according to 340 00:19:04,020 --> 00:19:06,630 Sean Aylmer: a report on Bloomberg. As we have mentioned a bit 341 00:19:06,630 --> 00:19:10,320 Sean Aylmer: here, Nvidia is writing the artificial intelligence obsession. It's the 342 00:19:10,320 --> 00:19:13,198 Sean Aylmer: world's biggest maker of these specialized chips needed to power 343 00:19:13,199 --> 00:19:16,408 Sean Aylmer: a new generation of AI products. This happening, of course, 344 00:19:16,410 --> 00:19:19,800 Sean Aylmer: just as the viral success of ChatGPT, that's pretty much 345 00:19:19,800 --> 00:19:22,980 Sean Aylmer: every company around the world thinking about AI. Nvidia is 346 00:19:22,980 --> 00:19:23,609 Sean Aylmer: the big winner. 347 00:19:24,300 --> 00:19:26,580 Michael Thompson: Yeah, it's a cracker of a story that one. And 348 00:19:26,580 --> 00:19:30,540 Michael Thompson: one more, Sean, the former boss of disgraced biotech group, 349 00:19:30,570 --> 00:19:34,859 Michael Thompson: Theranos, Elizabeth Holmes, has spent the last 24 hours in 350 00:19:34,859 --> 00:19:38,790 Michael Thompson: jail. That's the first day of an 11- year sentence for overseeing 351 00:19:38,790 --> 00:19:40,620 Michael Thompson: a notorious blood testing hoax. 352 00:19:40,950 --> 00:19:43,799 Sean Aylmer: It has been an amazing story, this one. Holmes, 39, 353 00:19:43,799 --> 00:19:47,069 Sean Aylmer: was convicted of fraud last year for duping investors, including 354 00:19:47,070 --> 00:19:51,000 Sean Aylmer: News Corps' Rupert Murdoch and Oracle co- founder Larry Ellison, 355 00:19:51,240 --> 00:19:54,090 Sean Aylmer: who contributed hundreds of millions of dollars in the failed 356 00:19:54,090 --> 00:19:58,710 Sean Aylmer: Silicon Valley startup. Now, Holmes and Ramesh Alwani, who's serving 357 00:19:58,710 --> 00:20:02,969 Sean Aylmer: a near 13- year prison sentence, claimed that Theranos had 358 00:20:02,969 --> 00:20:06,359 Sean Aylmer: developed a device that could quickly scan for diseases and 359 00:20:06,359 --> 00:20:09,930 Sean Aylmer: other medical conditions with just a few drops of blood. 360 00:20:10,350 --> 00:20:13,619 Sean Aylmer: But the technology never worked as advertised, leading to the 361 00:20:13,619 --> 00:20:16,290 Sean Aylmer: downfall of the company that at one point was supposed 362 00:20:16,290 --> 00:20:21,089 Sean Aylmer: to revolutionize healthcare. That's according to Associated Press. Anyway, Elizabeth 363 00:20:21,089 --> 00:20:23,879 Sean Aylmer: Holmes is now in jail. And Michael, before we finish 364 00:20:23,879 --> 00:20:26,640 Sean Aylmer: up, I have to apologize, so much going on today. 365 00:20:26,820 --> 00:20:29,970 Sean Aylmer: I do have a great unusual story. We've been having 366 00:20:29,970 --> 00:20:31,740 Sean Aylmer: them all week, but we're going to have to hold 367 00:20:31,740 --> 00:20:34,710 Sean Aylmer: off till tomorrow. Just time limits us. 368 00:20:35,550 --> 00:20:37,709 Michael Thompson: I think that's fair enough because it has been a 369 00:20:37,710 --> 00:20:41,789 Michael Thompson: massive 24 hours in news. So you'll just have to 370 00:20:41,789 --> 00:20:45,150 Michael Thompson: deliver an extra unusual story, which is going to... I 371 00:20:45,150 --> 00:20:47,190 Michael Thompson: mean, you've had some crackers so far this week, so 372 00:20:47,190 --> 00:20:49,290 Michael Thompson: I look forward to seeing what you bust out for 373 00:20:49,290 --> 00:20:49,800 Michael Thompson: us tomorrow. 374 00:20:50,940 --> 00:20:52,229 Sean Aylmer: I'll bust something out, good. 375 00:20:52,710 --> 00:20:55,920 Michael Thompson: Okay, well, on that note, up next is the Fear 376 00:20:55,920 --> 00:20:58,859 Michael Thompson: and Greed daily interview. And today we are speaking with 377 00:20:58,859 --> 00:21:02,880 Michael Thompson: Mike Wilson OAM, the Chief Executive of JDRF Australia. It's 378 00:21:02,880 --> 00:21:06,119 Michael Thompson: basically all about Type 1 diabetes, why a donation today 379 00:21:06,119 --> 00:21:08,340 Michael Thompson: is worth double and what it means to the lives 380 00:21:08,340 --> 00:21:13,199 Michael Thompson: of 130,000 people around Australia that have the condition, and 381 00:21:13,200 --> 00:21:16,648 Michael Thompson: the eight additional people that are diagnosed every single day. 382 00:21:17,010 --> 00:21:18,780 Michael Thompson: It's coming up next in the Fear and Greed Playlist 383 00:21:18,780 --> 00:21:21,480 Michael Thompson: on your podcast platform or at fearandgreed. com. au. And 384 00:21:21,480 --> 00:21:24,780 Michael Thompson: if you want to get involved, jdrf.org.au. And Sean, we've 385 00:21:24,780 --> 00:21:29,369 Michael Thompson: also been promising for days now, Amea, a most enthusiastic 386 00:21:29,369 --> 00:21:34,110 Michael Thompson: advocate. And we have got them coming out the- 387 00:21:34,830 --> 00:21:35,609 Sean Aylmer: Proverbial. 388 00:21:35,699 --> 00:21:38,879 Michael Thompson: The proverbial, yes. Thank you. You've saved me from embarrassing 389 00:21:38,880 --> 00:21:42,630 Michael Thompson: myself there. But lots of people getting in touch with 390 00:21:42,630 --> 00:21:45,540 Michael Thompson: us via social media, including our Instagram, so jump on 391 00:21:45,540 --> 00:21:48,030 Michael Thompson: there, Fear and Greed podcast. But this one from Brad 392 00:21:48,570 --> 00:21:52,888 Michael Thompson: who wrote to us on LinkedIn, said, " Congratulations, Sean and 393 00:21:52,888 --> 00:21:56,730 Michael Thompson: Michael, on reaching three years, you are my go- to 394 00:21:56,790 --> 00:21:59,880 Michael Thompson: and I look forward to my morning and afternoon updates. 395 00:22:00,660 --> 00:22:04,888 Michael Thompson: PS, loved your book too, Michael." And he finished with, " 396 00:22:04,888 --> 00:22:07,168 Michael Thompson: Keep it up." And so I don't know whether he's referring to 397 00:22:07,440 --> 00:22:09,389 Michael Thompson: keep up the podcast or keep up the books- 398 00:22:09,390 --> 00:22:10,948 Sean Aylmer: You got to write another book or something- 399 00:22:10,949 --> 00:22:13,530 Michael Thompson: Yeah, you know what, we'll do it all. Thank you, 400 00:22:13,530 --> 00:22:17,070 Michael Thompson: Brad. You're our mea, our most enthusiastic advocate for today. 401 00:22:17,070 --> 00:22:20,638 Michael Thompson: And please keep those nominations. Self nominations are more than 402 00:22:20,638 --> 00:22:22,198 Michael Thompson: welcome. Thank you very much, Sean. 403 00:22:22,410 --> 00:22:23,070 Sean Aylmer: Thanks, Michael. 404 00:22:23,190 --> 00:22:26,190 Michael Thompson: It's Thursday, the 1st of June 2023, the first day of 405 00:22:26,190 --> 00:22:29,219 Michael Thompson: winter. Make sure you're following the podcast. Join us online, 406 00:22:29,219 --> 00:22:31,740 Michael Thompson: as I mentioned, on LinkedIn, on Instagram, check out that 407 00:22:31,740 --> 00:22:34,888 Michael Thompson: video, Twitter and Facebook. And start today on all the 408 00:22:34,890 --> 00:22:37,920 Michael Thompson: business news with Alexa and your Amazon Echo Smart speaker. 409 00:22:38,130 --> 00:22:40,590 Michael Thompson: Simply say, " Alexa, play the Fear and Greed podcast" to 410 00:22:40,590 --> 00:22:43,410 Michael Thompson: catch the latest episode. You can get yours now at amazon. com. 411 00:22:43,950 --> 00:22:46,320 Michael Thompson: au. I'm Michael Thompson and that was Fear and Greed. 412 00:22:46,590 --> 00:22:47,129 Michael Thompson: Have a great day.