Australian Economy Grows 0.3% in Q3, GDP Per Capita Falls for Seventh Quarter
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Good afternoon! It’s Wednesday December 4 and here the latest Australiasi’s business news
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Today's reading time is 7 minutes. - Miko Santos
MORNING MARKET
Presented by CommSec
The US stock market was mixed Tuesday. Investors are watching this week's jobs data and Jerome Powell's comments to determine whether the US Federal Reserve will cut rates in December after a rally that took stocks to record highs. A 2027 free cash flow forecast of US$18 billion boosted AT&T stock by 4.6%. After President Yoon Suk Yeol declared martial law, US-listed South Korean companies fell 1.6% in the iShares MSCI South Korea ETF. Tesla fell 1.6% after November sales of China-made electric vehicles fell 4.3% to 78,856. The cybersecurity firm's second quarter revenue forecast disappointed analysts, sending Zscaler down 4.7%. US Steel fell 8% after President-elect Trump reiterated his opposition to Nippon Steel's US$15 billion acquisition. Honeywell shares fell 1.3% after a deal with Bombardier to develop aviation technology. The S&P 500 and Nasdaq closed at record highs while the Dow Jones fell.
MORNING HEADLINE
China Lifts Final Australian Beef Export Bans, Signaling $20.6bn Trade Recovery China lifted its final bans on Australian meat processing plants, restoring their beef trade relationship and improving diplomatic relations. The bans had cost Australia billions in exports.
📰South Australia Crowned Best State for Business in 2024 Regulation Report According to a new Business Council of Australia study, Victoria ranks last among all states and territories; South Australia provides the best environment for businesses in the nation thanks to its reduced taxes and simplified laws.
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BANKING
CBA Faces Criticism Over 'Worst Christmas Present' ATM Charges"
Commonwealth Bank has reintroduced ATM fees, causing outrage among government officials and consumers. The bank charges customers for ATM withdrawals, citing high cash-handling costs. However, the government views this as a step backward in ensuring accessible banking services for all Australians, arguing that it goes against the trend of fee-free banking.
The Key Points:
CBA has reintroduced ATM fees for certain transactions, including charges for their own customers
Bank claims cash handling costs approximately $400 million annually
Government strongly opposes the decision, citing concerns about the impact on financial inclusion and accessibility, and calls for reconsideration.
Move contradicts government's efforts to ensure accessible banking services
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"We want Australians, wherever they live, to have access to bank services." - Stephen Jones
Why It Matters: This decision could significantly impact Australians who rely on cash transactions. For example, it may disproportionately affect vulnerable populations, such as low-income individuals and the elderly, who predominantly use cash for their daily transactions. The reintroduction of ATM fees may also signal a broader shift in banking practices. For instance, it could set a precedent for other banks to follow suit, resulting in a domino effect of increased costs for essential banking services across the industry.
Big Picture: The reintroduction of ATM fees symbolizes a historical tug-of-war between preserving conventional banking services and embracing the growing dominance of digital payments in the financial landscape. This decision could influence other banks' policies, potentially leading to a ripple effect in the industry. It might reshape how Australians access and use cash, prompting a shift towards alternative payment methods and digital transactions in the future.
BIG PICTURE
Photo by Kyle Glenn on Unsplash
📰Australia's Economy Grows 0.3% as Government Spending Masks Consumer Caution The September quarter 2024 Australian economy grew 0.3% due to increased public sector spending and investment, but GDP per capita fell for the seventh consecutive quarter and household spending remained flat, indicating continued economic slowdown despite twelve straight quarters of growth.
Treasurer Reports Mixed Economic Signals: Income Growth Up, Consumer Spending Flat. Australia's economy grew slightly (0.3%) in the last quarter of 2024, with higher wages and tax cuts helping people's incomes, but high interest rates and living costs are causing many to spend less and save more.
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ECONOMY
Woolworths Christmas Supply Crisis: Workers Strike Over AI Concerns
A looming two-week strike at Woolworths distribution centers threatens to leave supermarket shelves empty during the Christmas season. The retail giant seeks Fair Work Commission intervention amid escalating tensions with workers over AI implementation and performance targets.
Woolworths workers have initiated a two-week strike due to concerns about workplace conditions and AI implementation. This has prompted the company to seek Fair Work Commission intervention. The dispute poses a significant risk of disrupting supply chains during the crucial Christmas period. Both sides remain unwavering in their stances.
The Key Points:
Woolworths is taking legal action at Fair Work Commission over worker strikes
Strike could significantly impact Christmas supply chain and stock availability
Workers raise concerns about AI implementation and performance metrics
Government urges both parties to negotiate and resolve disputes
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"We want to see the workers get a fair go, we want to see them have their issues dealt with" - Stephen Jones
Why It Matters: This industrial action could have a direct impact on millions of Australian shoppers during the busy holiday season. The dispute also highlights broader concerns about the impact of automation and AI on workforce conditions in the retail sector, bringing attention to the larger implications of the issue.
Big Picture: The strike represents a crucial moment in the ongoing debate on workplace automation, showing how technology and labor rights intersect in Australia. Its outcome could set precedents for how other companies implement new technologies while managing worker concerns and rights.
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REGIONAL AUSTRALIA
Regional Australia's Population Boom: Migration Surges 80% Above Pre-Covid Levels
Photo by Stijn te Strake on Unsplash
Australia is experiencing unprecedented population growth, with migration levels soaring 80% above pre-Covid averages, totaling over X million new residents. This marks a new era of migration that extends beyond coastal areas, as more Australians are opting to relocate from major cities to regional areas at unprecedented rates.
Those already living in these areas are increasingly choosing to stay, supported by the availability of diverse recreational activities, lower cost of living, and a thriving job market. The trend is particularly strong along the east coast, with Victoria, New South Wales, and Queensland collectively attracting over 70% of the new residents, showcasing a significant regional shift.
The Key Points:
City-to-regional relocations are thriving at 19.8% above pre-Covid levels, while inter-regional movement is stabilizing, suggesting an increasing contentment among existing regional residents.
Regional Victoria emerges as a powerhouse destination, attracting 30% of net regional inflows due to its vibrant economy, scenic landscapes, and robust community infrastructure, with four of its Local Government Areas ranking among the top five growth hotspots.
Maitland, NSW, emerges as a surprising new migration hotspot, propelled by its affordable housing options, well-developed healthcare facilities, and strategic proximity to Newcastle, making it an attractive destination for new residents.
The east coast continues to lead the regional migration landscape, attracting 90% of the total X million net regional inflows, highlighting its unparalleled appeal to new residents.
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"With more corporate employers setting up or relocating to Geelong, Queenscliffe's proximity to Greater Geelong and the Melbourne CBD means more regional Australians can enjoy diverse employment opportunities while living in a beautiful location with enhanced lifestyle opportunities." - Paul Fowler, CBA Executive General Manager
Why It Matters: This demographic transformation signifies a fundamental shift in Australian lifestyle and employment choices, with profound implications for housing affordability, infrastructure development, and the delivery of essential services in regional communities. The trend challenges the traditional metropolitan-centric model of Australian development and suggests a need for increased investment in regional infrastructure and services to support sustainable growth in these areas.
Big Picture: This migration pattern signifies a broader transformation in Australian society, potentially fostering more distributed economic growth, intensifying demand on regional housing markets, and necessitating substantial infrastructure investments in burgeoning regional hubs. It may also reshape political priorities, as regional communities gain more demographic weight and influence in national decision-making.
TECHNOLOGY & INNOVATION
➡️ 📰Australia Launches Revolutionary Anti-Scam Register to Block Fake Message At least one million fraudulent communications per day are expected to be stopped by the Australian government's national registry, which requires legitimate businesses to register their phone numbers and sender IDs.
➡️ ACCC Report: Generative AI Fails to Dent Google's Australian Search Monopoly. The Australian Competition and Consumer Commission (ACCC) reported that Google still dominates 94% of Australia's search market, even as new AI technologies emerge and global regulators take action against the tech giant.
➡️ Former Celsius CEO Pleads Guilty to $48M Crypto Fraud, Faces Decades in Prison. Celsius Network's former CEO, Alexander Mashinsky, pleaded guilty to federal fraud charges for manipulating crypto token prices and misled customers while secretly selling his own tokens for $48 million before the company's bankruptcy in 2022.
BUSINESS & MARKETS
➡️ Business Council Backs Expanded Skills Migration List to Address Labor Shortages. While urging even more professions to support housing development and infrastructure projects, the Business Council of Australia has approved the government's increase of skilled migration opportunities to help address workforce shortages.
➡️ Okta Reports 14% Revenue Growth in Q3, Hits $665 Million as Identity Security Demand Grows Okta's third-quarter revenue rose 14% to $665 million, it made a profit compared to last year's loss, and its subscription business performed well despite market challenges.
➡️ 📰Australia Launches Southern Hemisphere's First mRNA Vaccine Facility, Joining Global Elite Australia's first mRNA vaccine manufacturing facility, in Victoria, with Moderna, can produce 100 million doses per year, making it one of the few countries with complete mRNA production capabilities and ensuring vaccine independence for future health crises.
POLITICS & WORLD AFFAIRS
➡️ China Retaliates Against US Semiconductor Export Controls with Critical Materials Ban. China has banned exports of critical materials for chip and battery production in response to US restrictions on selling advanced semiconductor technology to China, escalating their tech rivalry.
➡️ Australia Joins 156 Nations in UN Vote Demanding Israeli Withdrawal from Palestinian Territories Australia voted with 156 other nations at the UN in favour of a resolution calling for Israel's withdrawal from occupied Palestinian territories, its first vote in over 20 years and supporting a two-state solution.
➡️ South Korea in Crisis: Opposition Threatens Impeachment After President's 6-Hour Martial Law. South Korea's main opposition party wants President Yoon Suk Yeol to resign or be impeached after he briefly declared martial law and deployed troops around parliament, which lawmakers overturned 190-0.
TRAVEL
➡️ Australia Issues Travel Advisory for South Korea Amid Political Tensions After Martial Law Crisis. Australia's Smartraveller website has updated its travel advisory for South Korea, warning against protests and demonstrations after the president briefly imposed martial law before parliament overturned it.
➡️ Marriott Expands Four Points Flex Brand with Second London Hotel in Shoreditch East. Marriott International opened a second Four Points Flex by Sheraton hotel in Shoreditch East, converting a former YOTEL into a 161-room Cycas Hospitality-managed hotel.
➡️ Corporate Travel Policy Gaps Put Employee Safety and Compliance at Risk, Research Shows. A new CMAC Group study found that inadequate corporate travel policies put companies at risk, particularly for employee safety, with 40% of business travellers going solo without protects, unauthorised spending, and compliance violations.
GAMES
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