This is Business Now with Ross Greenwood. Hi there and welcome to Business Now on this Thursday. Thanks for your company. I'm Ross Greenwood. Coming up on the program today, the chance of.

This is Business Now with Ross Greenwood. Hi there and welcome to Business Now on this Thursday. Thanks for your company. I'm Ross Greenwood. Coming up on the program today, the chance of.

An interest rate cut in February next year lengthens as Novembers unemployment fell from four point one to three point nine percent. HSBC chief economist Pat Bloxham will break it down for us very shortly now. That employment surprise rock the markets. The share market fell, our dollar rows, but comwol Bank currency strategist Joseph Caperso thinks our dollar could challenge sixty US cents in the coming year.

An interest rate cut in February next year lengthens as Novembers unemployment fell from four point one to three point nine percent. HSBC chief economist Pat Bloxham will break it down for us very shortly now. That employment surprise rock the markets. The share market fell, our dollar rows, but comwol Bank currency strategist Joseph Caperso thinks our dollar could challenge sixty US cents in the coming year.

He'll be with us as well.

He'll be with us as well.

And the strong employment numbers fly in the face of a big increase in company collapses.

And the strong employment numbers fly in the face of a big increase in company collapses.

And job losses.

And job losses.

Will analyze that with credit watchers Ivan Colhoun. So all that and plenty more coming up on today's program now. Other stories we think you should know about today include competition watchdog the A Triple C claims two cups, Spotless and Ventire engaged in cartel like behavior when bidding and pricing contracts for Australia's Department of Defense. Spotless, a division of Downer, EDI and Vendia, each provide property management services to the military, worth.

Will analyze that with credit watchers Ivan Colhoun. So all that and plenty more coming up on today's program now. Other stories we think you should know about today include competition watchdog the A Triple C claims two cups, Spotless and Ventire engaged in cartel like behavior when bidding and pricing contracts for Australia's Department of Defense. Spotless, a division of Downer, EDI and Vendia, each provide property management services to the military, worth.

Many billions of dollars a year.

Many billions of dollars a year.

These contracts extend to more than two hundred separate properties, including Duntroon in the Act, Puckapanial in Victoria, and Victoria Barracks in Melbourne. The A Triple Z alleges and on three occasions between twenty nineteen and twenty twenty two, the companies made or attempted to make arrangements which had the likely effect of fixing, controlling or maintaining prices for services. The A Triple C says this preaches cartel provisions. A Triple CED chair Jenna Cascott Leave Today said we allege this conduct caused direct harm to the Commonwealth and ultimately to Australian taxpayers. Down to EDI put out a statement saying it will vigorously defend any proceedings and it's the view that neither Spotless nor the two Spotless MP always referred to by the Atriple C, engaged in unlawful conduct on the market.

These contracts extend to more than two hundred separate properties, including Duntroon in the Act, Puckapanial in Victoria, and Victoria Barracks in Melbourne. The A Triple Z alleges and on three occasions between twenty nineteen and twenty twenty two, the companies made or attempted to make arrangements which had the likely effect of fixing, controlling or maintaining prices for services. The A Triple C says this preaches cartel provisions. A Triple CED chair Jenna Cascott Leave Today said we allege this conduct caused direct harm to the Commonwealth and ultimately to Australian taxpayers. Down to EDI put out a statement saying it will vigorously defend any proceedings and it's the view that neither Spotless nor the two Spotless MP always referred to by the Atriple C, engaged in unlawful conduct on the market.

Though down A shares down our DI among.

Though down A shares down our DI among.

The worst performing of the top two hundred companies, it shares you can see down in almost six percent today five dollars thirty seven elsewhere, and the beginning of a new aviation war might have kicked off as Virgin Australia and Qatar started selling long haul international flight tickets or ticket flights, undercutting key rival Quatas. Last year, Qatar was controversially denied in extra twenty one flights a week into Australia, and it was then revealed the Quatas directly lobbied the federal government. In September, Katar announced, subject or approval, it will buy twenty five percent of Virgin Australia. The A Triple C immediately granted interim authorization for the two airlines to create an alliance. The tickets on sale from today see economy fares to Europe for potentially under two thousand dollars and for business class fares under ten thousand. Both these fares cut typical fares on Quattas by around twenty percent.

The worst performing of the top two hundred companies, it shares you can see down in almost six percent today five dollars thirty seven elsewhere, and the beginning of a new aviation war might have kicked off as Virgin Australia and Qatar started selling long haul international flight tickets or ticket flights, undercutting key rival Quatas. Last year, Qatar was controversially denied in extra twenty one flights a week into Australia, and it was then revealed the Quatas directly lobbied the federal government. In September, Katar announced, subject or approval, it will buy twenty five percent of Virgin Australia. The A Triple C immediately granted interim authorization for the two airlines to create an alliance. The tickets on sale from today see economy fares to Europe for potentially under two thousand dollars and for business class fares under ten thousand. Both these fares cut typical fares on Quattas by around twenty percent.

Aviation experts.

Aviation experts.

Today's suggests Quartus and its partner Emirates will respond with cheap affairs if their aircraft loads are reduced by this cheaper competition. Anyway, let's get across the rest of today's markets with Edward Boyd Heed eleven thirty am As soon as those employment numbers dropped, there was a dramatic change.

Today's suggests Quartus and its partner Emirates will respond with cheap affairs if their aircraft loads are reduced by this cheaper competition. Anyway, let's get across the rest of today's markets with Edward Boyd Heed eleven thirty am As soon as those employment numbers dropped, there was a dramatic change.

In the markets today. They're sure was ross.

In the markets today. They're sure was ross.

The market basically tanked as soon as those figures were released. Investors clearly think there will not be a rate cut in February. Now, before the numbers dropped, it was looking pretty good. Shares were up almost half a percent. There was a lot of optimism out there, and you can see though the sharp fall at eleven thirty am, most sectors were in the red. Today. It finished the day down point three percent. The market is now at basically its lowest level in three weeks. Oil and gas producer Beast Energy was the best performer on the market after it was upgraded by a broker. It lifted almost ten percent. The fund manager Platinum has continued to slowly regain value after Regal Partners ban and its takeover bid.

The market basically tanked as soon as those figures were released. Investors clearly think there will not be a rate cut in February. Now, before the numbers dropped, it was looking pretty good. Shares were up almost half a percent. There was a lot of optimism out there, and you can see though the sharp fall at eleven thirty am, most sectors were in the red. Today. It finished the day down point three percent. The market is now at basically its lowest level in three weeks. Oil and gas producer Beast Energy was the best performer on the market after it was upgraded by a broker. It lifted almost ten percent. The fund manager Platinum has continued to slowly regain value after Regal Partners ban and its takeover bid.

Earlier this week.

Earlier this week.

The hard rockliftier minor Pilbrim Minerals will that jumped after its CEO, Dale Henderson bought half a million shares worth roughly one point one point five million dollars. The data scrubbing company Appened was the best tech stock. A medical imaging company, Promedic has jumped after being upgraded by a broker as well. Now after being one of the top performers yesterday, the car dealership business ap Eagers was sold off. The Canada based iron All minor Champion Iron dropped after reporting an unforeseen interruption to its train load out facility in Quebec.

The hard rockliftier minor Pilbrim Minerals will that jumped after its CEO, Dale Henderson bought half a million shares worth roughly one point one point five million dollars. The data scrubbing company Appened was the best tech stock. A medical imaging company, Promedic has jumped after being upgraded by a broker as well. Now after being one of the top performers yesterday, the car dealership business ap Eagers was sold off. The Canada based iron All minor Champion Iron dropped after reporting an unforeseen interruption to its train load out facility in Quebec.

Some machinery broke.

Some machinery broke.

It's currently being fixed, so Which shares were down just under two percent. Agrid business Grand Court was down two. The diversified minus soa thirty two is tough. Week continued due to the civil unrest in Mozambique disrupting one of its minds, and food retail of Domino's Pizza was off almost four percent. He's a quick look at the Aussie dollar, which jumped up. The unemployment numbers came in much stronger than expected. The dollar hit thirteen months low yesterday. It's now up today, up pretty strongly to sixty four point one point five US cents and ross.

It's currently being fixed, so Which shares were down just under two percent. Agrid business Grand Court was down two. The diversified minus soa thirty two is tough. Week continued due to the civil unrest in Mozambique disrupting one of its minds, and food retail of Domino's Pizza was off almost four percent. He's a quick look at the Aussie dollar, which jumped up. The unemployment numbers came in much stronger than expected. The dollar hit thirteen months low yesterday. It's now up today, up pretty strongly to sixty four point one point five US cents and ross.

That's markets, thanks.

That's markets, thanks.

So much, Ed, Well, let's go to those employment numbers to change the markets. As Ed says, economists and forecast a four point two percent unemployment rate today.

So much, Ed, Well, let's go to those employment numbers to change the markets. As Ed says, economists and forecast a four point two percent unemployment rate today.

That was for November.

That was for November.

The Reserve Bank forecast, remember is four point three percent by the end of this year. Treasury in the budget says four and a half percent by June next year, so when the number dropped at three point nine percent, it was completely.

The Reserve Bank forecast, remember is four point three percent by the end of this year. Treasury in the budget says four and a half percent by June next year, so when the number dropped at three point nine percent, it was completely.

Against the narrative.

Against the narrative.

Thirty six thousand jobs were created in November, meaning almost one point one million jobs have been created since the Albanzy government came to power in twenty twenty two. The number of unemployed has fallen to six hundred and five thousand, eight hundred.

Thirty six thousand jobs were created in November, meaning almost one point one million jobs have been created since the Albanzy government came to power in twenty twenty two. The number of unemployed has fallen to six hundred and five thousand, eight hundred.

The ABS head of Labor.

The ABS head of Labor.

Statistics, David Taylor, said employment has more than kept up with migration and also population growth in the states and territory. It's the rate in each of New South Wales, Queensland, South Australia, tas HE and the NT is three point nine percent.

Statistics, David Taylor, said employment has more than kept up with migration and also population growth in the states and territory. It's the rate in each of New South Wales, Queensland, South Australia, tas HE and the NT is three point nine percent.

Average in WA it's love three point three.

Average in WA it's love three point three.

Percent, in Canberra two point nine percent, lots of public servants and just Victoria is dragging behind its unemployment rate four point two percent. So let's bring in here Paul Blocks, of chief Economists for HSBC in Australia, a former economist at the Reserve Bank.

Percent, in Canberra two point nine percent, lots of public servants and just Victoria is dragging behind its unemployment rate four point two percent. So let's bring in here Paul Blocks, of chief Economists for HSBC in Australia, a former economist at the Reserve Bank.

Paul always good to chat to you.

Paul always good to chat to you.

Did this change in the narrative is to win the Reserve Bank might move interest rates for the first time.

Did this change in the narrative is to win the Reserve Bank might move interest rates for the first time.

Well, hasn't shifted our view because we've been one of the houses out there saying they're not going to cut for a while, but it certainly has changed the market sort of perception of things. Yes, and I think it is a distinctly important piece of information. I mean, you point out that the unemployment rate fell quite sharply, fell to three point nine. That wasn't expected, as you say, But if you dig a little bit deeper, you can also find some of the more cyclical timely indicators in this survey, things like underemployment and youth unemployment, and those things actually fell quite sharply as well. Now they're important because they're normally the things that turn first. If you look at the labor market, the first thing that happens is when things soften up, the youth unemployment rate rises and underemployment rate rises as firms cut back on hours. Well, the same thing happens when it starts to tighten up again. So you know, the labor market doesn't look like it's loosening anymore. It looks like it's tightening.

Well, hasn't shifted our view because we've been one of the houses out there saying they're not going to cut for a while, but it certainly has changed the market sort of perception of things. Yes, and I think it is a distinctly important piece of information. I mean, you point out that the unemployment rate fell quite sharply, fell to three point nine. That wasn't expected, as you say, But if you dig a little bit deeper, you can also find some of the more cyclical timely indicators in this survey, things like underemployment and youth unemployment, and those things actually fell quite sharply as well. Now they're important because they're normally the things that turn first. If you look at the labor market, the first thing that happens is when things soften up, the youth unemployment rate rises and underemployment rate rises as firms cut back on hours. Well, the same thing happens when it starts to tighten up again. So you know, the labor market doesn't look like it's loosening anymore. It looks like it's tightening.

But we've got an economy that is bumping along barely above recessionary levels. We got consumers who are in a per capita recession and have been for two years. Consumer spending is pretty flat across the mark. Where is all these jobs coming from?

But we've got an economy that is bumping along barely above recessionary levels. We got consumers who are in a per capita recession and have been for two years. Consumer spending is pretty flat across the mark. Where is all these jobs coming from?

So what's happened? I mean, the question is what's happened?

So what's happened? I mean, the question is what's happened?

Right?

Right?

So, you know, a couple of years.

So, you know, a couple of years.

Ago, in twenty two and twenty three, demand raced well ahead of the capacity of this economy to supply. Right, we had a massive boost to demand ahead of supply. We were operating well beyond our sustainable capacity that was showing up in the high inflation. Well, now we've slowed down demand. Demand has slowed down a long way. But it turns out we've only really slowed down back down to being operating at about full capacity at about our supply.

Ago, in twenty two and twenty three, demand raced well ahead of the capacity of this economy to supply. Right, we had a massive boost to demand ahead of supply. We were operating well beyond our sustainable capacity that was showing up in the high inflation. Well, now we've slowed down demand. Demand has slowed down a long way. But it turns out we've only really slowed down back down to being operating at about full capacity at about our supply.

Had half a million migrants coming over the past and we've absorbed them. And we've absorbed them, and in fact more than absorbed them. The unemployment rates starting.

Had half a million migrants coming over the past and we've absorbed them. And we've absorbed them, and in fact more than absorbed them. The unemployment rates starting.

To go down.

To go down.

It that's right, we've absorbed them in an economy that needed a lot of wor We had an unemployment rate at three and a half percent, lowest level.

It that's right, we've absorbed them in an economy that needed a lot of wor We had an unemployment rate at three and a half percent, lowest level.

In fifty years. We needed a lot of workers to.

In fifty years. We needed a lot of workers to.

Come in to meet that demand even though the demand was slowing. So we've taken all those workers in and the unemployment rate is still very very low.

Come in to meet that demand even though the demand was slowing. So we've taken all those workers in and the unemployment rate is still very very low.

That doesn't make any sense because if the economy is flatlining, which it is right now, it's flatlining, then who's employing all these people.

That doesn't make any sense because if the economy is flatlining, which it is right now, it's flatlining, then who's employing all these people.

Well, a lot of the workers are going into the public service. This said public sector. That's part of it. So we don't know from these numbers monthly numbers helping to prop up these jobs.

Well, a lot of the workers are going into the public service. This said public sector. That's part of it. So we don't know from these numbers monthly numbers helping to prop up these jobs.

Well, certainly it's a big contributor to the story.

Well, certainly it's a big contributor to the story.

So over the reason.

So over the reason.

Why this is one of the highest spending governments in history.

Why this is one of the highest spending governments in history.

So over the past year, if you look at the employment numbers, you can say that about forty percent of the job creation over the past year to the third quarter was public sector jobs. Now only about fifteen percent of workers are in the public sector, so that's really really quite strong growth. Now there's private sector job creation going on too, so we can't ignore.

So over the past year, if you look at the employment numbers, you can say that about forty percent of the job creation over the past year to the third quarter was public sector jobs. Now only about fifteen percent of workers are in the public sector, so that's really really quite strong growth. Now there's private sector job creation going on too, so we can't ignore.

That there is private sector job creation happening too.

That there is private sector job creation happening too.

But yes, a very large share of this is public sector jobs, and yes it is related to the fact that public demand is a share of the economy has hit an all time high. There's a lot of spending going on, so the public demand story is expanding, the private demand story has had to slow down to make way for it, and the net if you add the two together. Yes, growth in the economy has slowed, but we're still operating at about full capacity Toment.

But yes, a very large share of this is public sector jobs, and yes it is related to the fact that public demand is a share of the economy has hit an all time high. There's a lot of spending going on, so the public demand story is expanding, the private demand story has had to slow down to make way for it, and the net if you add the two together. Yes, growth in the economy has slowed, but we're still operating at about full capacity Toment.

So for full capacity, you're close to This is the famous nayru right, So this is the level at which employment is seen to be full and not adding to inflation. Now, the Reserve Bank is hit in the past that it's maybe around about sort of four and a half percent, Treasury in the budgets that it was around four and a quarter percent. It's three point nine percent. Surely that's going to be adding to inflation. That's one of the reasons why the markets took this number so adversely today.

So for full capacity, you're close to This is the famous nayru right, So this is the level at which employment is seen to be full and not adding to inflation. Now, the Reserve Bank is hit in the past that it's maybe around about sort of four and a half percent, Treasury in the budgets that it was around four and a quarter percent. It's three point nine percent. Surely that's going to be adding to inflation. That's one of the reasons why the markets took this number so adversely today.

Yeah, So for the RBA, I think the key question is here is inflation is still running at three and a half percent on the core measure, the measure they focus on. They got to get it down to two and a half percent, that's their target. Will it be able to fall from three and a half to two and a half And the answer is today's number says makes it a little harder because actually the economy is still operating at full capacity. The unimploy rate's starting to come down with the load markets no longer loosening, so that's not going to keep putting downward pressure on wages growth. And so that's why the market reacted to the way it did. The market appropriately it goes, well, you know, the economy, the unploy rates now starting to fall rather than rise.

Yeah, So for the RBA, I think the key question is here is inflation is still running at three and a half percent on the core measure, the measure they focus on. They got to get it down to two and a half percent, that's their target. Will it be able to fall from three and a half to two and a half And the answer is today's number says makes it a little harder because actually the economy is still operating at full capacity. The unimploy rate's starting to come down with the load markets no longer loosening, so that's not going to keep putting downward pressure on wages growth. And so that's why the market reacted to the way it did. The market appropriately it goes, well, you know, the economy, the unploy rates now starting to fall rather than rise.

It means that it's.

It means that it's.

Going to be harder to get that inflation back to target and less likely less likely that the RBA is going to be able.

Going to be harder to get that inflation back to target and less likely less likely that the RBA is going to be able.

To Okay, then I hear the Treasurer say we want the private sector to start investing and starting to do that, but the reality.

To Okay, then I hear the Treasurer say we want the private sector to start investing and starting to do that, but the reality.

Is if wages are higher, they're.

Is if wages are higher, they're.

Less likely to want to go out there and invest in a big way to make a fundamental difference to economic growth.

Less likely to want to go out there and invest in a big way to make a fundamental difference to economic growth.

Well, the challenge here is, and this is I've been saying this all year long. This is what this was our theme for this year. The economy is operating a full capacity. And there are hard choices when you're operating a full capacity, because if you spend in one area, another area has to slow down. And so because we're spending more in terms of the public side.

Well, the challenge here is, and this is I've been saying this all year long. This is what this was our theme for this year. The economy is operating a full capacity. And there are hard choices when you're operating a full capacity, because if you spend in one area, another area has to slow down. And so because we're spending more in terms of the public side.

The private side needs to slow down.

The private side needs to slow down.

You can't have both going strong, because if you did, then inflation is not going to come down.

You can't have both going strong, because if you did, then inflation is not going to come down.

It's going to stay too high.

It's going to stay too high.

So that means that the government's now spending. We're in re placement of the private sector.

So that means that the government's now spending. We're in re placement of the private sector.

Right, that's true, except that it's about it.

Right, that's true, except that it's about it.

Then the question becomes, are the things that are being sort of spent on in public demand?

Then the question becomes, are the things that are being sort of spent on in public demand?

You know, do we think that they're allocated appropriately?

You know, do we think that they're allocated appropriately?

Do we think it's it's a question of whether that's the right choice to be making, And so that's a separate whether it is productivity. Well, and that's the key, right, Well, that's a big part of it. So is productivity is very weak in this overall story. So one of the reasons why GDP is weak and employment is strong, we'll think about it. Right, Basically, we're getting quite We're getting less output for lots and lots of people working in the economy.

Do we think it's it's a question of whether that's the right choice to be making, And so that's a separate whether it is productivity. Well, and that's the key, right, Well, that's a big part of it. So is productivity is very weak in this overall story. So one of the reasons why GDP is weak and employment is strong, we'll think about it. Right, Basically, we're getting quite We're getting less output for lots and lots of people working in the economy.

So productivity is quite weak.

So productivity is quite weak.

We've got to do something.

We've got to do something.

About because we're hiring a lot of public service.

About because we're hiring a lot of public service.

Well, it may be related, but it's also the case if you look real carefully, if you look really carefully, that the private sector and productivity is actually quite weak as well, like across the board, So we've got to do something. We've got to do quite a lot to get productivity to lift. That might be private sector investment. It should be economical to go. Where's your first rate cup penciled in for?

Well, it may be related, but it's also the case if you look real carefully, if you look really carefully, that the private sector and productivity is actually quite weak as well, like across the board, So we've got to do something. We've got to do quite a lot to get productivity to lift. That might be private sector investment. It should be economical to go. Where's your first rate cup penciled in for?

I don't have it until the middle of next year till second quarter.

I don't have it until the middle of next year till second quarter.

Paul Blocks of pretty thanks for your time. Always great the chat. Thanks so much for asime.

Paul Blocks of pretty thanks for your time. Always great the chat. Thanks so much for asime.

In partnership with comsek.

In partnership with comsek.

Well.

Well.

As Ed pointed out, the dollar popped against the US greenback with those employment numbers, but there's a common view amongst economists and forecasters that our dollar should fall because of the deterior and in current account deficit. Let's bring in here Comwolf Banks chief currency strategist, Joseph Caperso.

As Ed pointed out, the dollar popped against the US greenback with those employment numbers, but there's a common view amongst economists and forecasters that our dollar should fall because of the deterior and in current account deficit. Let's bring in here Comwolf Banks chief currency strategist, Joseph Caperso.

Joseph, always good to chat to you about this.

Joseph, always good to chat to you about this.

You earlier this week, basically late last week, Basis said you think the dollar may challenge sixty US cents over the course of.

You earlier this week, basically late last week, Basis said you think the dollar may challenge sixty US cents over the course of.

The next twelve months. Give them what you've seen and.

The next twelve months. Give them what you've seen and.

Heard with employment and all the rest of it and seeing the dollar pop, do you still hold that view absolutely?

Heard with employment and all the rest of it and seeing the dollar pop, do you still hold that view absolutely?

Ross The main forces on the.

Ross The main forces on the.

Aussie dollar are actually foreign influences, such things like what is going on in the US economy and the Chinese economy. Of course, the global commodity prices are set in China. Sentiment about the US economy, whether it's good or bad, can have a huge impact on the Aussie.

Aussie dollar are actually foreign influences, such things like what is going on in the US economy and the Chinese economy. Of course, the global commodity prices are set in China. Sentiment about the US economy, whether it's good or bad, can have a huge impact on the Aussie.

Dollar against the US. I very much think that the.

Dollar against the US. I very much think that the.

Aussie dollar could quite easily test sixty US cents to the downside at some point next year.

Aussie dollar could quite easily test sixty US cents to the downside at some point next year.

Can I make an obervation thing to you, Joseph? Can I make an observation? It feels to me as.

Can I make an obervation thing to you, Joseph? Can I make an observation? It feels to me as.

Though Australia is almost back in the conditions of the early two thousands, when our dollar was in the fifties, it even challenged the forties at one stage, right, And that is, we've got a current account deficit, we're exporting money, Commodity prices are low, we've got a differential of interest rates between US and the rest of the world. And they're almost the perfect conditions in which the dollar generally tends to go down.

Though Australia is almost back in the conditions of the early two thousands, when our dollar was in the fifties, it even challenged the forties at one stage, right, And that is, we've got a current account deficit, we're exporting money, Commodity prices are low, we've got a differential of interest rates between US and the rest of the world. And they're almost the perfect conditions in which the dollar generally tends to go down.

Is that you're reading of it.

Is that you're reading of it.

Our commodity prices are quite a bit higher today than they were at the start of the century.

Our commodity prices are quite a bit higher today than they were at the start of the century.

I knew they were a lot low.

I knew they were a lot low.

They were just a few years ago, but they were near enough to record high as a couple of years ago. One thing that I think will be a really important force pulling the Aussie dollar down next year that we didn't see at the start of the at the century is that the US president, the new US president, we think, will put on some quite large tariffs on its imports from China, Europe and other places, and that will push up the US dollar against more or less every currency, including the Aussie dollar, with the exception of the Japanese yen. We saw this in twenty eighteen when the trade warmark one started. At the start of twenty eighteen, the Aussie dollar was around eighty US cents. By the end of twenty eighteen, the Aussie dollar was around seventy US cents. And that happened despite rising commodity prices during twenty eighteen.

They were just a few years ago, but they were near enough to record high as a couple of years ago. One thing that I think will be a really important force pulling the Aussie dollar down next year that we didn't see at the start of the at the century is that the US president, the new US president, we think, will put on some quite large tariffs on its imports from China, Europe and other places, and that will push up the US dollar against more or less every currency, including the Aussie dollar, with the exception of the Japanese yen. We saw this in twenty eighteen when the trade warmark one started. At the start of twenty eighteen, the Aussie dollar was around eighty US cents. By the end of twenty eighteen, the Aussie dollar was around seventy US cents. And that happened despite rising commodity prices during twenty eighteen.

And Joseph is that largely Joseph, because there's just a flow of capital going into the United States seeking protection and seeking better returns.

And Joseph is that largely Joseph, because there's just a flow of capital going into the United States seeking protection and seeking better returns.

Part of it is that although I would argue that this time round, the tax cuts are going to be much smaller in twenty twenty six than what we saw in twenty eighteen, and the reason for that is most of the tax cuts that analysts talk about are simply extending the current tax code. But another reason, a really important reason why the US dollar will rise against more or less every currency next year is because when the tariffs increases, the currency increases to offset the gain in international competitiveness. That's why I think the US dollar will rise against more or less all currencies next year.

Part of it is that although I would argue that this time round, the tax cuts are going to be much smaller in twenty twenty six than what we saw in twenty eighteen, and the reason for that is most of the tax cuts that analysts talk about are simply extending the current tax code. But another reason, a really important reason why the US dollar will rise against more or less every currency next year is because when the tariffs increases, the currency increases to offset the gain in international competitiveness. That's why I think the US dollar will rise against more or less all currencies next year.

I'll tell you what.

I'll tell you what.

Joseph Copers so always good to chat to you many thanks for your input today will chat you said, thank you well. Coming up on business now, the strong jobs and ups also disguised another lan our economy. A growing number of companies are going broke, rising costs and slowing consumer spending. Well, they're a poisonous combination. It's great to have your company on business now. Well, look, we've spent a bit of time talking about the strong employment numbers today, but that also flies in the face of the rise in company collapses, where presumably people also lose their jobs. In fact, in the past year to November, insolvencies are up by fifty seven percent according to CREDDA Watch. Over the past year, some of the more notable names to collapse include the Airlines, Rex and Bonser, the giant clothing manufacturer and retail at Mosaic with its labels Rivers, Millers, Cadies and nony B the battery maker Red Flow, the South Australian food company best in global and overseas but affecting Australia.

Joseph Copers so always good to chat to you many thanks for your input today will chat you said, thank you well. Coming up on business now, the strong jobs and ups also disguised another lan our economy. A growing number of companies are going broke, rising costs and slowing consumer spending. Well, they're a poisonous combination. It's great to have your company on business now. Well, look, we've spent a bit of time talking about the strong employment numbers today, but that also flies in the face of the rise in company collapses, where presumably people also lose their jobs. In fact, in the past year to November, insolvencies are up by fifty seven percent according to CREDDA Watch. Over the past year, some of the more notable names to collapse include the Airlines, Rex and Bonser, the giant clothing manufacturer and retail at Mosaic with its labels Rivers, Millers, Cadies and nony B the battery maker Red Flow, the South Australian food company best in global and overseas but affecting Australia.

Avon and Tupperware.

Avon and Tupperware.

In the construction industry, some reports suggest eight collapses a day, the biggest no doubts in Heillias.

In the construction industry, some reports suggest eight collapses a day, the biggest no doubts in Heillias.

Earlier this year.

Earlier this year.

So why is this showing up in the employment numbers? Join me now, the chief economists of Credit to watch, Ivan Colhoun. I haven't many thanks for your time in the program. Just explain why is it that all those job losses from corporate insolvencies are not being shown in the employment numbers.

So why is this showing up in the employment numbers? Join me now, the chief economists of Credit to watch, Ivan Colhoun. I haven't many thanks for your time in the program. Just explain why is it that all those job losses from corporate insolvencies are not being shown in the employment numbers.

Look, I think the whole employment situation is a bit of a conundrum at the moment. I suspect when you listed a lot of companies there, but I think most of the companies that are going insolvent are quite small companies. So you've listed a few of the bigger ones. But when we look at construction, it's going to be smaller companies, subcontractors, et cetera. If we look at the other big sector that's had big, right, big increases in solvencies. It's food and beverages, and they tend to you know, it might be a restaurant, but it's not a huge restaurant chain or anything like that. So I think it's the size of companies. There's also sole practitioners sole traders as well, quite big in the numbers. So that's why I think it's happening us.

Look, I think the whole employment situation is a bit of a conundrum at the moment. I suspect when you listed a lot of companies there, but I think most of the companies that are going insolvent are quite small companies. So you've listed a few of the bigger ones. But when we look at construction, it's going to be smaller companies, subcontractors, et cetera. If we look at the other big sector that's had big, right, big increases in solvencies. It's food and beverages, and they tend to you know, it might be a restaurant, but it's not a huge restaurant chain or anything like that. So I think it's the size of companies. There's also sole practitioners sole traders as well, quite big in the numbers. So that's why I think it's happening us.

So I have one thing that comes out of your stats, is it the Tax Office. It's clearly much more aggressive now in chasing down tax debts.

So I have one thing that comes out of your stats, is it the Tax Office. It's clearly much more aggressive now in chasing down tax debts.

And that means has been a significant.

And that means has been a significant.

Increase in the number of court actions that have been taken against business who have not kept up with their taxes.

Increase in the number of court actions that have been taken against business who have not kept up with their taxes.

Yeah, that's true, and it's probably fair to say that that's more a return to businesses normal for the Tax Office. And I think with all of these statistics, you have to remember the base that they're coming off. During COVID, the Tax Office didn't pursue tax debts and similarly so they weren't the court actions, but those debts didn't mount up through COVID, and now that it's gone back to trying to recover some of that accumulated debt, there are more insolvencies and businesses closing.

Yeah, that's true, and it's probably fair to say that that's more a return to businesses normal for the Tax Office. And I think with all of these statistics, you have to remember the base that they're coming off. During COVID, the Tax Office didn't pursue tax debts and similarly so they weren't the court actions, but those debts didn't mount up through COVID, and now that it's gone back to trying to recover some of that accumulated debt, there are more insolvencies and businesses closing.

So you mentioned the food and beverage sector, and that's pretty obvious. If all of a sudden you've got to squeeze on household incomes and you've got a per cap at a recession. But on the other side of it, you've got costs, wages, rents, energy rising for restaurants, cafes, fast food outlets, then that's always the perfect storm for those businesses to go broke.

So you mentioned the food and beverage sector, and that's pretty obvious. If all of a sudden you've got to squeeze on household incomes and you've got a per cap at a recession. But on the other side of it, you've got costs, wages, rents, energy rising for restaurants, cafes, fast food outlets, then that's always the perfect storm for those businesses to go broke.

Yeah, it's certainly. It's always the case. The weaker businesses and the less well run businesses are challenged whenever there's pressures on them. I absolutely agree with your point about the cost of doing business. I mean, we hear mostly about the cost of living crisis, but for businesses, many of those same issues. Electricities, higher, insurances up very sharply, wages have gone up pretty strongly as well, and then some consumers being a bit more cautious because they're under pressure from those higher cost of living pressures themselves and higher interest rates. So it is all combining to make things more challenge. It's not. I look at the numbers and I think as a share of total businesses. They're not super high, though they have risen a lot from those very low levels that we saw before the ATO went back to business as normal.

Yeah, it's certainly. It's always the case. The weaker businesses and the less well run businesses are challenged whenever there's pressures on them. I absolutely agree with your point about the cost of doing business. I mean, we hear mostly about the cost of living crisis, but for businesses, many of those same issues. Electricities, higher, insurances up very sharply, wages have gone up pretty strongly as well, and then some consumers being a bit more cautious because they're under pressure from those higher cost of living pressures themselves and higher interest rates. So it is all combining to make things more challenge. It's not. I look at the numbers and I think as a share of total businesses. They're not super high, though they have risen a lot from those very low levels that we saw before the ATO went back to business as normal.

Sure, and there's a bit of a knock on effect here because if business is tight for me, I'm struggling to pay my bills, I'm late in paying my bills, which means the next company's late in paying its bills.

Sure, and there's a bit of a knock on effect here because if business is tight for me, I'm struggling to pay my bills, I'm late in paying my bills, which means the next company's late in paying its bills.

That can be seen in your stats as well.

That can be seen in your stats as well.

Yeah, it certainly can. And one of the best indicators I've found a Credit to Watch they have business to business payment defaults. That's a really good indicator of potential insolvency. And if more than three businesses separate businesses register a payment default against your company, then the probability that your company becomes insolvent in the next years as high as seventy over seventy percent. So it's a good indicator that you get through the Creditor Watch servant.

Yeah, it certainly can. And one of the best indicators I've found a Credit to Watch they have business to business payment defaults. That's a really good indicator of potential insolvency. And if more than three businesses separate businesses register a payment default against your company, then the probability that your company becomes insolvent in the next years as high as seventy over seventy percent. So it's a good indicator that you get through the Creditor Watch servant.

Indeed, brilliant stuff. I'van Colhoern from Credit to Watch. Many thanks for your time in the program today.

Indeed, brilliant stuff. I'van Colhoern from Credit to Watch. Many thanks for your time in the program today.

Thanks ros now.

Thanks ros now.

Just to finish up a man who may have once skirted with being broke during his life, but now that's a long way in the past. Elon Musk, according to Forbes magazine, is the very first person in history to have a net worth of more than get this, four hundred billion US dollars. That's around six hundred and twenty three billion Australian dollars. Now, it's just not Musk's interest in say Tesla or Xai or ex social media site, but also now SpaceX with recent capital raisings valuing that business a loan at three hundred and fifty billion US dollars. And of course musks Tesla shares have been boosted in terms of more than one hundred billion dollars since Donald Trump was elected.

Just to finish up a man who may have once skirted with being broke during his life, but now that's a long way in the past. Elon Musk, according to Forbes magazine, is the very first person in history to have a net worth of more than get this, four hundred billion US dollars. That's around six hundred and twenty three billion Australian dollars. Now, it's just not Musk's interest in say Tesla or Xai or ex social media site, but also now SpaceX with recent capital raisings valuing that business a loan at three hundred and fifty billion US dollars. And of course musks Tesla shares have been boosted in terms of more than one hundred billion dollars since Donald Trump was elected.

But just for a bit of Aussie context.

But just for a bit of Aussie context.

I thought I'd work out six hundred and twenty three billion dollars. Now, that's going to buy you all of the Commonwealth Bank, all of BHP, all of CSL plus Medibang private, and even then Elon would still have a billion or two left to throw a few parties. It's massive anyway. That is it for today's program. Thanks for your company. We'll see you tomorrow.

I thought I'd work out six hundred and twenty three billion dollars. Now, that's going to buy you all of the Commonwealth Bank, all of BHP, all of CSL plus Medibang private, and even then Elon would still have a billion or two left to throw a few parties. It's massive anyway. That is it for today's program. Thanks for your company. We'll see you tomorrow.