Is the economy booming or dooming?

Yesterday was a day of conflicts with me writing about the real life economic signs that the economy is slowing, but then I was invited to the new fantastic musical & Juliet, which meant I saw The Star complex in Sydney packed to the rafters with diners, gamblers, and theatre goers!

It's made me ponder whether I should I be talking about boom or doom.
And this happened with the economy throwing off two conflicting statistics. On one hand, the monthly inflation reading from the ABS came in at 3.4% for the year to January, which meant no rise, and this was less than economists expected. They tipped 3.6% but they looked at the still high cost of building a new home, which was up 5%, and rents which are 7.8% higher. This made them suggest these could keep inflation high for longer than the RBA wants.
When you throw in recent strong wage rises, some economists are pretty pessimistic that inflation can fall enough to get the RBA to start cutting interest rates.
The AFR reports that “Jarden chief economist Carlos Cacho said he expected rents to grow at an annual pace of 7 to 10 per cent for the next two years, while there were few signs that inflation in the cost of building a new home was easing.
“Wages costs are still a challenge, and we’ve seen the price of some inputs like plasterboard go up. Yes, you’ve seen some falls in inputs like timber and steel, but it doesn’t seem like it’s enough to offset that,” he said.
It is possible that economists are looking at the bad news on the costs of housing and rents but ignoring other areas where prices are falling.
Westpac’s chief economist and former RBA heavyweight, Lucy Ellis, thinks inflation still might be heading into the 2-3% band, which should get the RBA cutting rates.
“It does look like global goods inflation is going to be running similar to its pre-pandemic rate, which was an average of 0 per cent,” she told the AFR. “And we’re not yet there for goods inflation in Australia, so that gives you a bit of space for other things to have a rising relative price.”
While some economists are stressing about future inflation, Treasurer Jim Chalmers is rightly warning about a possible economic slowdown, with economic growth figures out next week. Obviously, his Treasury number crunchers would be looking at the statistics and real-world indicators of business and consumer activity, which are suggesting our economy, wait for it, contracted in the December quarter.
Remember this: if the economy is really slowing, prices and inflation is bound to follow.
Lucy Ellis, chief economist at Westpac, sees a significant slowdown in her growth model on our economy with only 0.2% rise for the quarter, which would mean four quarters in a row of falling economic activity. “Everything we’ve seen – hours worked is soft, trade is soft, the indications on investment are a bit soft, and now today’s dwelling investment numbers are a bit soft,” she said yesterday.

The global economy is slowing too, with Japan and the UK in technical recessions and these are important customers for our exporters, so the RBA has to be careful that it doesn’t get too stressed about inflation and keep interest rates too high for too long and dump us into a recession.

Economists are divided on next week’s economic growth, but it will be for the three months to the end of December. I reckon things have slowed significantly since Christmas. Yesterday, I reported that my Sydney CBD sandwich shop owner said he advertised for more staff as workers were coming back to the office. He got three responses in November. However, two weeks ago, he got 80 potential applicants.

Interest rate repayments and rising job losses suggest we’re seeing a slowing economy but that won’t show up until the March quarter of economic data, which won’t be out until April 24! If we see contraction of the economy then, we’ll see speculation that May or June could bring the first rate cut!
I think we can avoid doom, but a boom is more a 2025 thing, after rates have fallen, but it will depend on what the RBA does in coming months.

(By the way & Juliet, a great musical that ponders the outcome if Juliet didn’t commit suicide when Romeo took his own life, but instead went to Paris and lived it up? The songs in this funny show come from Max Martin who has written songs for Taylor Swift, Ed Sheeran, Justin Bieber, and many more big stars. And he co-wrote “Shake it off”, “Blank Space” and more for Taylor!)

Will the impact of Taylor cause inflation to swiftly rise?

The power of celebrities and the importance of entrepreneurs who put on events such as the Taylor Swift concerts, have been put on show with the impact on the demand for hotel rooms rising to levels not seen since the Sydney Olympics in the year 2000.
The SMH’s property expert Carolyn Cummins reports that the impact of Ms Swift has “…tripled the number of visitors to Melbourne during the traditional Melbourne Cup carnival and AFL grand final seasons.”
Add the Sydney Mardi Gras and the upcoming SailGP and hoteliers expect occupancy records to be well and truly broken. And then there’s The Pink and Blink-182 concerts, which are icing on the cake for the hospitality sector.
Accommodation Australia chief executive Michael Johnson put Swift’s economic impact into real numbers with this: “Based on past calculations, her shows can inject between $150 and $200 million to a state’s economy, just as we saw in Melbourne.”
Johnson said the decision by the hotel chains to increase capacity after two years of closure from the global pandemic had proved the right one.
And while the economic growth effect is positive, Taylor Swift could mean inflation might not fall as fast as home loan rate sufferers would have liked.
“With fans travelling internationally and interstate to see the pop princess, rooms across Sydney for the weekend have skyrocketed as much as 300 per cent compared to the average Sydney room rate achieved last February of $287 per night,” Ray White’s head of research, Vanessa Rader, revealed.
Rader told Cummins that “…CBD hotel rates in Melbourne jumped from an average $220 a night average recorded last February to as high as $900 a night and above in the past few weeks,” which is inflation with a capital I!
But it mightn’t be all bad news, with anecdotal signs that the mortgage cliff is really kicking in for the normal economic world outside of Swiftmania.
In two days, I’ve learnt the following from businesspeople in the real world.
First, my sandwich seller in the Wintergarden in Spring Street here in Sydney said that he advertised for staff before Christmas and received only three applications, but his ad two weeks ago brought 80!
Second, he said some staff who’ve worked for years with him, who he gives pay increases to every two or three years, have asked for a pay review for the first time ever!
Third, one of the best and most sought after flower businesses in Sydney has seen the demand for weddings drop from 50 a year to 10!
Fourth, that flower seller did say that people are buying flowers as gifts to take to people’s homes, who are putting on dinners because they’re finding they can’t afford restaurants.
Thirteen rate rises and the big ‘cliff’ created when borrowers switched from low fixed rate home loans to high variable rate loans is now having a bigger-than-expected effect.
Those with loans are squeezed and are saving money, which will slow down the economy and add to unemployment. Taylor Swift and other star-driven events will soften the blow of a contracting economy thanks to rate rises, and the only good thing about all this is that it could speed up the Reserve Bank’s inevitable decision to cut interest rates.
Given what I’m seeing in the real world economy, I hope the RBA cuts swiftly!

CEOs head for gallows as ‘woke’ demands kill careers

David Murray, one of Australia’s most respected CEOs and former CBA boss for 13 years, has looked at the recent exits of Woolworths Brad Banducci and Virgin Australia’s Jane Hrdlicka and has said that he believes too many CEOs are being pressured by “ESG woke agendas”.
As a consequence, public company executives confront the “hangman’s choice”! I know David well and only he would know what that phrase means! Thankfully for me, an early morning writer/explainer, Google comes to the rescue, and I suspect the “hangman’s choice” is the same as the “hangman’s riddle”, which says: “He who serves me best, shall earn the rope on the gallows tree.”
For CEOs, you’re damned by others if you do the right thing by those who are woke and ESG demanding, and vice versa. On top of that, the company and its CEO will cop the ire of the stock market and shareholders if they please the woke community and the share price falls.
Woolworth’s Australia Day play is a case in point. To respect this nation’s first people, Banducci stopped selling Australia Day memorabilia but then copped a bagging from Australians who don’t want to see the national day of celebration of the country’s establishment denigrated.
He served the ESG master and was then hanged by those who are less woke. David Murray argues that this puts CEOs in an invidious position. He says boards “were putting their chief executives in situations where they had to take a stand on what should be political or social issues, as well as running their company and argues that this is a very “unhealthy” situation, where the CEO could get drawn into social issues and find themselves being criticised by the media.
Murray suggests that there is a “confusion of purpose” and maintains that all CEOs now have to ask this question: Am I here for social or commercial purpose?
And that led him to ask the question that new age CEOs have to ask: ““Do employees come to work for these other purposes or is profit the main purpose of the company?”
He thinks big political and social issues should be determined by government, and CEOs shouldn’t have to “make decisions on policies after weighing up the winners and losers in the society.”
As protectors of shareholders’ assets (and the company’s brand is one of the most valuable), boards have increasingly become more woke-conscious and have added an ESG filter in assessing the actions of CEOs. What used to be external regulation when companies were working against the social good, has now become self-regulation often initiated by the board.
Combined with escalating government regulation, driven by social and voter demands, a CEO’s task has become more complex, and this is how Murray sums it up: “It is leading to a requirement for more committees and remuneration models, which are constraining the efficiency of the board and the freedom of the chief executive. It is leading to the confusion of the proper roles of the board and the chief executive”.
All this has been put on the table for debate as “consulting firm McGrathNicol is warning entrepreneurs to think twice about taking their companies public, given the increasing public scrutiny of the CEOs of listed companies”, The Australian’s Glenda Korporaal reports. “McGrathNicol partner Andrew Fressi said the firm was reminding company owners wanting to list on the stock exchange that the move involved intense scrutiny from a range of stakeholders, including the media and customers.”
Fressi agrees with Murray when it comes to CEOs now under new pressure with media 24/7 coverage. “Twenty years ago, you didn’t have some of the scrutiny that they’re under now these days, which creates a lot of personal pressure,” he said. “There is much more scrutiny on people, especially in consumer-facing industries where you have brands and retail customers. They are constantly in the limelight…[and] they are constantly being challenged. There is more pressure from an investor and customer stakeholder perspective.”
And this public scrutiny has seen public company listings collapse from 191 in 2021 to 32 last year. Partly explaining this is the revelation from Alisa Wood, a New York-based partner in private equity giant KKR, who told The Australian that it used to take six years to take a company public but now it takes 12!
So, the question is this: will backlash comments by the likes of David Murray do anything to change boards and make life easier for CEOs? I doubt it, as industry super funds are now big owners of public companies and are getting positions on boards, and these groups are especially committed to ESG issues, given their left-wing union origin.
However, these groups are supposed to be acting in the interests of their super members and super actions by trustees have to pass the sole purpose test.
What’s this test? Put simply, the Australian Taxation Office (ATO) requires that all activities of super funds must be for the sole purpose of providing retirement benefits to their members (or to their dependants if any of their fund members die before retiring).
If a company’s profits and share price are being hurt by excessive woke-ness, then the Commissioner of Taxation might have to rescue these company leaders for the sake of super members.
By the way, that’s never going to happen!

Switzer Investing TV | 26th February 2024

Meet the best property price predictor in the country!

Energy companies and their shocking bill behaviour!

Big energy companies AGL and Origin Energy have been found to have engaged in what one expert claimed was extreme price gouging. And their actions mean Australian households have been charged $1,000 a year more than big businesses would be charged for using the same amount of power!
In a unique case of bill shock, Matthew Benns reported the following: “Analysis of AGL’s half yearly results shows the cost of electricity for ordinary Australian households has jumped by $100 a megawatt hour but for big business it has gone up by just $30. Origin Energy bumped up residential bills by $72.30 a megawatt hour but hit business with just a $4.10 increase.”
“This looks like one of the worst examples of price gouging we have seen by big business in Australia,” said David Richardson, a senior researcher at The Australia Institute, who did the calculations for this Telegraph story.
The price gouging coincides with Origin Energy doubling its profits in the last six months from $399 million to $995 million, while AGL’s profits were up 78% and EnergyAustralia’s tripled its local revenue to $94 million.
Given PM Albanese has the big supermarkets on notice for price gouging, it seems only fair that these new identified price gougers are put on the shortlist for Prime Ministerial persecution!
But is this a fair comparison? The power companies say no, arguing that bigger businesses are easier to service, while small residential properties are relatively dearer. In economics, we call it economies of scale, meaning as you do something on a bigger scale, the average cost comes down
“When the whole country is suffering in a cost of living crisis, how can they happily go along bumping up profits and price gouging?” Mr Richardson asked. However, David Richardson isn’t backing down on the matter, reminding us that the difference for a measurable amount of power for big business to a household used to be $131 but recent price rises have taken it to $198.50 over the past year!

As they say to criminals in UK police dramas: “Gotcha!”

Matt Benns told us that “…the average household uses 2.76 megawatt hours of electricity every six months. That is costing them $276 more for six months than the previous year – $552 more a year.”

And that means “AGL household customers are paying just over $1,000 more than a big business for the same amount of electricity.”

The ball is actually now in Energy Minister Chris Bowen’s court, as he has promised to get prices down by $275 by the end of 2025. But so far, the independent Australian Energy Regulator has had no success in holding back this price gouging.

Power companies have payment assistance plans but these don’t really deliver price cuts and given the Government’s policies to promote alternative sources of power, it has to be duty bound to stop power companies price gouging.

Clearly, these claims have to be tested to see if David Richardson is right. If he is, Chris Bowen needs to act with full force, as energy prices have contributed to high inflation, which in turn has led to higher interest rates.

The cost of living is now the number one issue for Australian voters and the Government can’t afford to sit back and ignore this huge story.

Will Albo enshrine working from home into law?

Prime Minister Albanese wants proof that working from home can deliver a positive productivity dividend that could deliver his government four payoffs. And not all of them are economic gifts.

First, he could have arguments to justify not getting public servants offside by asking them to come back to work. This comes as many non-government workers were surprised to learn that the AFR revealed that “the number of federal public servants working from home – including Reserve Bank, Treasury and other key department staff – has more than doubled since before the pandemic.” So that means 40% of these 180,000 public servants now work from home two or three days a week.

Second, the PM and his team will have another policy that might annoy the business sector that employs workers, but Labor will have a new policy that will more than likely please employees, who also can be considered voters!

Third, he actually might get some academic/survey data that says working from home actually is a plus for the economy and fourth he wins the next election.

The Albanese Government is trawling for all policies that non-business owning employees might either like or might feel aren’t threatening to them. In the future, this could be a plus to them if their circumstances change. It’s clever politics but potentially could be ruinous for some businesses, damaging to the economy and may result in higher unemployment. However, these negative effects could years after the possible law changes that mandate a worker’s right to work from home.

This kind of policy works when unemployment is low, as it is now at 4.1%. However, when it starts to rise significantly, then some of these worker-friendly/anti-business policies could come back to bite Labor, though that would more likely happen after the next election.

So, as The Brisbane Times says, the PM “…has backed an examination of the productivity benefits of working from home following revelations the government is looking into the obstacles preventing workplaces from tapping into the phenomenon.”

And he is backed by Productivity Commission chair Danielle Wood, who argues that “remote work was not a drag on productivity and, if managed well, could benefit the economy.”

Albanese is also planting a message in the public domain saying he likes not only the potential productivity but also the “flexibility” it offers workers and families. Clearly, this isn’t a hard thing to sell to potential employee voters.

Right now, “…the Fair Work Commission is investigating if working-from-home rights should be incorporated into industrial awards that cover millions of Australians,” Angus Thompson and Rachel Clun

from The Brisbane Times report. “Speaking at a press conference in Sydney, Albanese said while the appropriateness of working from home depended on the job, for many people it provided flexibility as well as improvements in productivity, which the government is determined to boost.”

And what employee would argue with this comment from the PM? “Rather than spending up to three hours – many people travel an hour and a half each way to and from work – that activity can be done more productively.”

He then linked his initiative to his belief that working from home has been “positive for working parents”.

Albo wants to find that working from home is a win-win but how can it be so clearcut for all businesses that it becomes a mandated right of workers? And even if they isolate this to specific industries, how can you assume all businesses do business exactly the same way?

Only a politician who has never run a business would think that this should be a right of a worker. It should be a practice that should be encouraged, especially if objective analysis says it works as a plus for employers and employees, but to make it a legal right looks more like a great idea politically but not necessarily economically.

Employers worry that too much working from home undermines workplace culture and the learning process for employees from being in the company of other workers. And Opposition Leader Peter Dutton accused the government of presiding over a union wish list. “Flexibility is fine for workers, and we encourage that. But, in the end, we have to be careful that the Albanese government just doesn’t side with the union on every occasion,” Dutton said at a press conference in Sydney.

As we eventually slide into pre-election mode, this could easily become a political ‘hot potato’ for Peter Dutton but a nice bag of chips for Albo.

Should we cheer wages outpacing inflation?

There’s good news and bad news on the economy. The good news is that wages have increased faster than inflation. The bad news is wages have increased faster than inflation!
And yes, I know I have two views on the same facts but right now we don’t know all the economic facts. That means this news about real wages rising could be good or bad news. The year-on-year 4.2% jump in the wage price index to the December quarter being bigger than the annual inflation of 4.1%, is in isolation something we should cheer. However, we need to look at what happened to productivity to cheer unreservedly.
When wages outpace inflation, economists say real wages are rising. This hasn’t happened for three years and you can see why a Labor Treasurer in Jim Chalmers would welcome news but then say he wasn’t “getting carried away” about it.
He'd say that because beating inflation is his main goal (apart from being re-elected) and if rapidly rising wages keeps inflation sticky above the Reserve Bank’s 2-3% band, then the Reserve bank will delay rate cuts. Now that could be an election problem for PM Albanese and his team’s re-election plans!
Yesterday I attended the Business Sydney breakfast where the star guest was Opposition Leader Peter Dutton, who was surprisingly impressive. He seems to be showing that he’s growing into his job better than most of us would have expected.
Dutton made the point that the PM could opt for a November election if interest rates are on the slide, which on top of the tax cuts could be enough for voters to ‘forgive and forget’ about the smashing of voters’ lives, thanks to the spike in the cost of living under Labor’s regime.
Of course, there were multiple contributors to the rise in the cost of living but the government in power often cops the total blame, as there’s no way the ordinary Aussie can punish the RBA for mistaken monetary moves.
In achieving the annual real wage rise, we’ve seen three quarters of real wage rises and a Labor Treasurer understandably would cheer this. As this is what Albo and Dr Jim were promising for 2024 not 2023, they’d see this as something to crow about.
Clearly, Australians with wages that can buy more goods and services because their pay is rising faster than the lift in inflation is good. But if productivity isn’t rising, then higher wages push up costs and then inflation.
On productivity, the story hasn’t been great, as Treasury revealed in 2023 with this: “Labour productivity growth has slowed in Australia since the mid 2000s. In the decade to 2020, Australia's productivity growth was the slowest in 60 years. Average productivity growth over the past 20 years to 2021–22 is around 1.2 percent.”
However, tells us that for “…the first quarter since March 2022, labour productivity rose in September 2023 by 0.9%, although labour productivity was still down 2.1% through the 12 months to September. The rise in the September quarter reflected a 0.2% rise in GDP coupled with a 0.7% fall in hours worked.”
And while it’s good to see productivity sneaking up in one quarter, as the old saying goes “one swallow doesn’t make a summer!”
If productivity keeps on rising, then a real wage rise is good economic and social news. But if the efforts of Labor’s Minister for Industrial Relations, Tony Burke and the unions mean wages rise faster than inflation and productivity rises don’t kick, then inflation will remain high and rate cuts will be delayed.
That would be bad news for interest rate sufferers and Labor’s re-election plans. And it could make the ‘new’ and improving Peter Dutton more sellable to a cheesed-off public.
While on the subject of the Government, The Guardian’s Greg Jericho has raised an issue that will spook employers who use non-compete clauses to stop employees switching jobs and stealing their clients.
The ABS has found that 21% of businesses use non-compete clauses, which Doc Chalmers sees as “concerning”. “The assistant minister for employment, Andrew Leigh, has long argued non-compete clauses help to suppress wages, as employers are disincentivised to offer pay rises, knowing an employee would be unable to leave for a similar role in another organisation,” Jericho reveals. “Leigh said non-compete clauses, which can also prevent someone from starting their own business in the industry they worked in, were becoming a growing concern internationally and “may be hampering business innovation and productivity”.
He says the big users of non-compete clauses were the financial services sector, rental, hiring and real estate services, but lately hairdressers, yoga instructors and early childcare educators, were adopting these measures to stop employees taking customers.
This is an issue that will only lose Labor votes with employers but given what they’ve endured since Albo won Canberra, there aren’t too many businesses left to lose! Imagine Andrew Leigh and Albo trying to run a business!

Virgin boss is flying the coop before it goes public

Virgin Australia must say bon voyage to its CEO American Jayne Hrdlicka, who surprised stock players with her announcement about her exit.
They’re left wondering when the airline will actually re-list and become a public company again.
The current owner is Bain Capital, which bought the airline after the Covid collapse of the company, following the Morrison Government refusing to bail out the airline. Bain has delayed the re-listing, which was slated for some time in 2023, clearly waiting for the perfect time to get investors to part with their money to buy into the airline on the stock market.
While most of 2023 was a tough time for the stock market (as the graph below shows), the last quarter until now has been a good time for share players, and the airline has missed an opportunity to get in while the going is good.

S&P/ASX 200 (one year)

That’s only a 4.4% rise over the past 12 months, though the calendar year gain was close to 9%, so there were opportunities. But for most of 2023, the market was on a slight slide as interest rates rose.
The current Bain thinking would be to wait until interest rates are falling and the chances of a recession are on the low side, which I expect is right, and then take a gamble that the stock market will surge as investors welcome the prospect of lower interest rates. History has shown that lower rates help stock prices and remember, many companies have seen their share prices smashed because they had debt and rising rates had to hit their bottom lines.
Given the fact that Bain Capital turned a nice profit of $129 million for 2022-23, which is the first for 11 years, there can hardly be an argument that Ms Hrdlicka hasn’t done a creditable job.
The CEO who will stay in the job until her replacement is found, redefined the airline as a “value carrier”, stopped competing with Jetstar, which she used to run, and dropped Tigerair. Also, she effectively didn’t take Qantas on for business class travellers, which was a battlefield for Qantas boss Alan Joyce and Virgin’s John Borghetti, which proved costly for both airlines.
Ms Hrdlicka has had the benefit of the post-Covid escalation if airfares and the fact that there isn’t cutthroat competition. But the job of a CEO is to create profit, not cheese off the customer base and even keep workers onside if you can’t make them love you.
And given what the Transport Workers Union’s national secretary said to, she was seen as an easier commodity to deal with compared to Alan Joyce.
“The decision to answer workers’ call with more insourced airport jobs in stark contrast to Qantas’ destructive model of fragmentation was, in our view, one of the best leadership decisions made by Hrdlicka and her team. It showed that listening to workers’ ideas on the best way forward for the airline is a valuable attribute for the CEO of Virgin Australia,” Kaine said.
Hrdlicka has had a nice ride with Virgin, despite post-Covid issues that have unsettled customers, such as very high fares, on-time performance, staffing levels and baggage handling operations.
Ironically, her old colleague at Qantas (where she was once a senior executive), Alan Joyce, and his public fall from grace has helped keep the spotlight off Virgin Australia, permitting her to make the airline relatively attractive when Bain decides to press the button on a re-listing.
All this was achieved by Ms Hrdlicka as she had to nurse her husband in recent years, who tragically passed away last year.
This is what she told her 7,500 staff on Tuesday: “I have decided the time is right for me to signal CEO transition for this great airline and ultimately to pass the baton on. This is not a decision I have taken lightly, but the last four years have been heavy lifting across the organisation during the toughest of times.”
And in a coincidence, this week, a company that Ms Hrdlicka was CEO of for a short time — A2Milk — finally reported well and saw its share price spike by 16% in a day. This wasn’t a great time for this very successful public company executive but if she still holds A2M stock, she might have had reason to pop a bottle of champagne (or a bottle of milk!) this week.
Bon Voyage Jayne Hrdlicka!

Son of James Packer shows enormous promise

At the heart of inspirational leadership are exceptional core values that have the ability to attract followers and then, as a consequence, result in better actions from those people they influence and then better results. It applies in politics, business, sporting teams and every endeavour humans are involved in.
So, when we see the heir to one of the country’s greatest fortunes show admirable leadership and socially caring qualities, you have to conclude that while the younger generation can at times be challenging for parents, bosses, and other older generation leaders, they can be inspirationally positive.
Like all human beings, they can have conflicted characteristics, such as caring a lot about the world, climate change, recycling and working with businesses that have purpose. But they can be damn hard on their parents, who often end up being their bankers!
Toleration of older Australians learnt behaviour (which is often at odds with the younger generation’s important values, attitudes, and behaviour) isn’t one of their strongest suits, as age-discriminated locals might testify to. But I guess that’s life.
These reflections on leadership and the society we live and work in came to me as I saw the first public showing of James Packer’s son and apparent heir, Jackson Lloyd Packer.
A Current Affair introduced the 14-year old to his fellow country men and women after the journalist Tess McCracken told us that “Jackson is following in his mother’s footsteps, joining her on a trip to Moldova to witness the work of UNICEF Australia.”
And it looks like his mum Erica has the right kind of leadership qualities that could create a Packer that will see the family’s wealth do a power of good.
The pair travelled to the country neighbouring Ukraine to help children living in refugee camps and has spent time witnessing the work completed by the aid organisation in early learning centres in one of Europe’s poorest countries. “I definitely want to help out … I’ve had so much growing up and I’m so thankful for that,” Jackson told A Current Affair on Monday night. “These kids have been stripped to have nothing and it’s just better if we can, you know, all share what we have and make life easier for these kids going through an incredibly hard time.”
You have to hope that our next generation of billionaires will be better than the ones of the past. Interestingly, average Australians are pretty good givers as the following shows: “Early in 2022, the Charities Aid Foundation ranks Australia as the eighth highest of more than 140 countries over 10 years (2009 to 2018) of the World Giving Index, with 60% of all Australians making a financial donation to a charity.”
That’s not bad for the world’s 12th richest countries per head of population but on another measure, we don’t have much to crow about.
“Australia’s environment for philanthropy ranks 19th in the world. At 4.28 out of 5, our Global Philanthropy Environment Index score is reasonable, but in a bracket below a group of 12 advanced economies with scores in the 4.5–5.0 range,” a report from Philanthropy Australia tells us.
With kids like Jackson, who clearly has had some influence from others in his life, it looks likely this is a Packer who could do his family proud, as the following from him shows: “You see those camps and those children and they’re still smiling. They’re still playing. And it really shows how, not only is it the little things that count, but it shows how some things that we obsess over, that we shouldn’t really care about, aren’t that important.”
That’s a big realisation for a 14-year old who has lived a life most people only dream of. It suggests this kid could do us all proud.

Switzer Investing TV | 19th February 2024

Under the cost-of-living pump? Try these 25 cost cutting tips

The run of economic data is telling us that 13 interest rate rises and the impost of inflation that topped out at just over 8% at the end of 2022 is starting to tell on many Australians. In fact, Prime Minister Anthony Albanese’ broken promise about tax cuts was inexorably linked to his knowledge that the cost of living could change where he’s living right now in The Lodge, if he didn’t do something before next year’s election.
In fact, that poll could be later this year, if the PM’s economic number crunchers forecast that the news could get worse before it gets better.
Of course, many everyday Australians who are feeling the pinch the Reserve Bank put on us to kill inflation, really might not be able to wait for the July 1 tax cuts to kick in. They could need some relief right now, as the relentless repayment or rent demands continue to put pressure on their disposable income.
Recently, Gwen, a 2GB listener, bought my book Join The Rich Club after another listener called my colleague Ben Fordham to say how he spent the time looking at his spending and by looking for alternatives or asking for existing suppliers for discounts or reduced repayments he was staggered about what he saved.
I told Ben that my book addressed many of these smart money managing tricks that our listener listed but when Gwen went looking for it, they weren’t in just one area of the book! Apologising to Gwen, I promised to put it altogether in one of my daily pieces, so here goes.
I’ll call this my “how to KO your cost-of-living problem”, so here goes:
1. Create a plan to KO your cost-of-living problem. List all your hip pocket challenges and quantify them, so you know how much money you need to find to keep making your repayments or covering your rent. (This pressure won’t last forever but what you teach yourself in these tough times will be lessons you remember forever and will help you build wealth in the future.
2. Do a budget by putting your income and spending life on the lawn! See where you’re spending and work out what’s left. What’s left is called your savings.
3. Look at every item you spend money on and ask: do I really need to spend that money?
4. Look at every spending item and try to GST your life, to reduce spending by 10%. If you spend $50,000 a year and you can save 10%, that’s a $5,000 saving.
5. Reducing your home loan repayments by 10% might not seem easy but if you’re under the pump, go to your lender and ask for a rate cut. Also go to a mortgage broker or two or three and see what potential savings are out there.
6. Shop in cheaper suburbs because often prices are set to accommodate the consumers who live in that area.
7. Shop in businesses that are famous for price discounting, such as Aldi.
8. Buy in bulk. Maybe a trip to COSTCO is way overdue.
9. Shop with a list so you don’t stray and buy stuff you don’t really need.
10. Become an expert on Gumtree, ebay and other online buying platforms.
11. Carry cash and, where it seems appropriate, ask: “How much for cash?”
12. Ask your boss for a raise.
13. Switch jobs for higher pay.
14. Start a part-time business, which the Yanks call a “side-hustle”. Ever heard of Uber?
15. Convert the garage into an Airbnb studio.
16. Think about renting out a room to a student.
17. Go to a tax agent and make sure you’re getting all the tax deductions you’re entitled to.
18. Have a garage sale and get rid of valuable stuff that is collecting dust in your garage or in a cupboard.
19. Sell your car and buy a cheaper one.
20. Sell your car and start using public transport if it makes money-saving sense.
21. Sell your house and pocket the capital gain.
22. Move in with the parents and rent your house out to bolster your cash flow.
23. Capture the tax benefits of negative gearing when you go from being a resident of your own home to a landlord, who lives with parents.
24. Rent your house out and move to a cheaper suburb where the rents are lower than the rent you’ll receive from renting yours.
25. Get a loan from the bank of mum and dad!

There are 25 ideas that someone should consider to get through the challenges of the current spike in the cost of living. Clearly, many of these ideas could be insufferable to many Aussies, but in desperate times you need to be able to do desperate things. And as I always say, if anything’s worth doing, it’s worth doing for money. And there are other great sayings, such as “when the going gets tough, the tough get going” and “if nothing changes, nothing changes.”
The high achievers of the world think and act outside the square and many of my 25 ideas could seem horrible options under normal circumstances, but many Aussies could be living through abnormally tight times so being innovative, as well as open to ideas that ordinarily you wouldn’t even consider, might be the best line of action.
Gwen, I hope this helps either you or the family member or members you wanted to help.
Here’s one last bonus idea: make sure you or the people you’re trying to help read the whole book of my book Join the Rich Club. It was written to help Australians get richer through knowledge, and as the US actress Sophie Tucker once said: “I’ve been rich. I’ve been poor. Rich is better.”