so who else could lead the company then

So, okay, let's look internally.

There's probably three players that stand out.

Colette Kress is the clear one.

She's the most visible member of Huang's executive team.

Now, she's the CFO, which normally under normal circumstances with all traditional company plays, the CFO is normally the one to step right in.

She's always going to be the one that does all the conference calls.

Okay, he's been described as the central banker of the AI trade, right? So where does this leave the AI trade more broadly? Because it also comes at a time when Anthropic is preparing for what could be a massive float on the US share market and is also courting Australian investors.

Talk to us about what you're seeing here.

Yeah, so look, buckle up, unfortunately, with some numbers that I'm about to run through very strongly.

The first one to look at is that trim mean number is rounded up.

The other thing that I want to show you with this is is that, again, we spoke about this at the start of the talk around getting more data and putting seasonality into it because we don't have enough time into the current numbers.

So that number that Ben gave you, that 4.3, that's trend number.

The seasonally adjusted number was actually 4.4. percent because they can do that with the quarterly figure that's why this is here is more important from my view because this is what the RBA cares about seasonally adjusted numbers are still much much better opportunities so if you go hang on a minute why is it at 3.7 it wasn't that high it was 3.6 well seasonally adjusted it was actually 3.7 percent because this is the quarterly figures that's come out here from IFM investors The other thing about it is you can see the uptick that's going there.

It is not showing any signs of breaking down.

Let's move in now to obviously by productivity by sector that you wanted to get to.

watch.

And Michelle Bullock, if you listen to her as deputy, she was honoured.

She was like, we need to go harder.

When you listen to her testimony from 21, early 22, before she became governor when she was deputy.

Yeah.

She was the most hawkish of the members sitting there going, no, we haven't got inflation under control in terms of what at her point in time, what she was controlling.

She was basically part of the economics team.

let's use

trillions, right? Yes.

Yeah.

Right.

And just let's highlight that.

That's a turt, you said, not a burt.

Yeah, it's a turt.

It's a turt.

And I know, Evan, a lot of businesses might say the amount of time, energy, and effort we put into that absolutely take the long view.

Um, so, so what, what was the driver? Where did, where did this come from?

Huge question, Rob.

So my drive for this came, I think like everybody's, when you sort of at the back of your head know it's there, but you don't really wanna embrace it.

So when I was going through school and doing all that kind of stuff, I loved psychology, I loved economics, but there was this perception that, you know, I should do something else because of what I was doing and how I was focused and what have you, and, and I actually thought I was gonna be a doctor.

So I went through that angle and, and did all the stuff, you know, when you're fifteen, sixteen, that you're trying to choose a career for when you're fifty, which is, in my view, ridiculous, but that's another story for another day.

And, you know, I, I...

Yeah.

So [laughs] what, what was the driver behind Exchanges? Is, is it, uh, an extension of that same passion and that drive that you now have?

So what soapbox are we climbing onto, mate? What are we talking about?

Concessions.

Yes.

Subsidies.

Yes.

Government spending on welfare.

Yeah, yeah, yeah.

It's

Why is that significant, especially for young people in this country?

Lots of reasons.

It's significant from the point of view that we now have a cash rate that is the highest it's been since 2011.

From a young person's perspective, it does therefore make the funding of your future opportunities just that little bit tighter.

Your ability to borrow has been squeezed because they are trying to slow things down.

They are trying to make your ability to borrow for a personal loan business loan or what most of you probably are thinking about a home loan just that little bit harder again it's not at you specifically either I do want to make this very clear the RBA is not thinking about the individual they're thinking about the whole country and they're actually thinking about the world and where Australia sits into it and how they can regulate inflation in particular because as they will point out over and over the reason they've raised rates today is that inflation is running too fast and the impact it has on living standards as a whole for the whole country is above what is comfortable to be sustainable the accumulation of about three and a half percent inflation rate that we've been running out has meant that we're now about 22 percent more expensive than levels were in 2021 and that rate of extension is too fast

What about them?

Yep.

It's not

even to shock the market.

It's the fact that, let's also call it out for what it is.

Since the government's changes to the RBA's makeup, its mandate, the way that its boards are now done, it doesn't have one board, it has two.

One is governance, one is basically the RBA rates decision board.

The other part of it is communication.

And communication, I'll give them credit.

The

I want to try and put the politics at the door because it's not about that.

Access to superannuation sounds great in principle.

It is terribly economically damaging to the person and also to the overall economy as a whole.

And why I'm so strong on that view is that we have seen this time and time again in the past where there is what is effectively a stimulus given to the person that ends up actually having an adverse effect.

So giving you access to what will effectively be 3% basis points of your superannuation.

So instead of the 12% you're currently getting, you will get 9% into your superannuation and 3% will go back to paying for rent, paying for mortgages, etc.

Is that it opens up a whole range of issues with this.

Did we see this great big influx of people going and grabbing money? We did,

That is very fair.

So the economy isn't the market and the market isn't the economy.

Why? Because a market is normally a collation of something.

So with your ETFs and what you guys do in Cletridge Slow, whether you're buying an ETF of the ASX or the NASDAQ or the S&P 500, blah, blah, blah, that is the indexation group of the 200 companies in Australia at the top.

And they're all different.

but they're also individual companies doing individual things, trying to individually improve what they do.

So when you look at trying to time the market, let's say using an economic cycle, the reason they don't mix is because an individual company may be affected or not affected at all by the timing of what's going on in the economy.

Just kept going,

Yeah

...

the government issues.

That, that has led to this scenario that we have today, and so that's where we sit.

So that's, that's the, the two figures that matter at the headline, but it's the next few charts that I really wanna drill into that matter to us.

This one scares the living daylights out of me, like it really, really does, just how far ahead our core inflation is versus the rest of the world.

And I wanna highlight the next nearest to us is the States, right? And that in itself was an interesting scenario considering all the changes that the Trump administration has brought in and what's happened.

Yep

How does property fit into supply and demand? Because I feel like everyone always says the simple thing, property is all about supply and demand, but there's more to it than just that, isn't

there? Yeah, there is.

So the demand question is much, much bigger than that simple concept.

The demand for a house is, and sounds pretty simplistic, until you remind yourself that, hang on a minute, the demand in Sydney, the demand in Melbourne, the demand in Brisbane, Adelaide, Perth, Hobart, Darwin, they're all very different.

So this is when everybody is, why is the Australian housing market doing X? I'm like, well, there's no such thing as the Australian housing market.

There's a Sydney market.

There's a Brisbane market, there's a Perth market, and they are all very different.

Really?

Like you said, inflation, all right, cool, central bank, the RBA is going to decide, interest rates are going up, they're going down, and then what else? Policy.

Policy.

So this is where the next part of the question is, which is, let's go back to monetary policy and the sledgehammer that is.

we know how fast it can change both positively and negatively.

So let's look at what the RBA did in 2025 when it cut rates three times and how quickly people's disposable income came back to them and how quickly they changed their behavior and how fast they started spending again.

So that's how quick it can change.

The catch is why we are now back in a scenario where we've had the three rate cuts they gave us last year taken away from us with three rate rises in 2026 is because we're not improving business outcomes.

Make

What is one of the biggest misconceptions you hear about the economy when it comes to everyday people?

Okay.

One of the biggest misconceptions is that the economy is about striving to make somebody better than somebody else.

I think that's the first thing that you see that this link over or that it's purely for government or whatever else.

The short answer of how we always look at economics and, and an economy is that an economy should be the old, you know, all ships rise on full tides, right? So the economy should be working for all.

So it should be, again, the way that it's most simply defined is that it's for the betterment of society.

It's about making sure that the whole economy is growing in a way that betters society and therefore living standards and therefore the ability to do what you do.

That's definitely a question I've asked multiple times.

Yeah.

But again, you're also basically, we're going to say, and I interrupted you on it, which is what's your incentive? Yeah.

Right.

So what's your incentive to work? But what's your incentive to get an education? The whole Generation Z, you can see it when they talk to you, is that they actually think the system for them doesn't work.

It's like a social contract that's been broken.

It's been broken.

So as you said, what's also known is that, as you would expect, a highly educated intern now comes out on very high five figures.

Mm-hmm.

Mm

... and not moving rates.

Now, the argument back then, [laughs] interest rates were at 1%, um, [laughs] 1.25 and 1%, and the argument from then, Philip Lowe, was, "We need the ammunition for an event." Jog on, we got COVID.

Um, but it would help their job as well.

So you'd probably have to cap inflation movement of the brackets, but it would certainly also improve it.

The one thing that we're dancing around here with regards to this debate and, you know, the...

Let's get back to the whole intergenerational inequality question you asked me before about the CGT changes.

Mm-hmm.

And how do we pay tax? What are some of the main elements that we're taxed on in life?

I'm sure all of you out there know very well that every time you get your pay packet, you can see that a certain amount has been taken out in tax.

So let's start at personal income tax.

One of my little inverted commas crusades, shall we say, Angel, is the amount of personal income tax that we pay in this country.

So it is at the moment, according to the latest budget papers, which came out on the 12th of last month, 54% of the federal government's revenue is comes from you, me and everyone listening working.

Now that is a lot and it needs to be pointed out that proportionately compared to our global peers, we do have a fairly high level of personal income tax.

So that's the number one taxation model for the feds.

So what do you think should change? They need to change the tax mix.

[laughs]

... of, of where this is.

And, and yeah, we kept hearing this term, as David just said, which is, "We are gonna be a productive budget.

We are gonna be a reform budget." With the reform part, and I'm, I'm not gonna touch the...

If you're gonna reform, do it or don't, is my argument with regardless, 'cause this is, again, you can see this is gonna be a generational budget set up.

It's not just what 2026, '7 will be, it will be '27, '28, and '28 and '29.

They clearly have to talk about personal income tax issues.

Correct.

Yep.

So there are people that will come at me that this doesn't work.

However, the reason I wanna die on it is that if we are going to address, inverted commas, the love buzzword that the media has, the housing crisis, the shortfall of first homeowners, the inability for people-

Yep

... all assets, not just this is deliberately a property, then, then that's the incentive, right? So Macca's is a great example, purely from the point of view, again, my caveat from the last discussion we had was about personal income tax.

They're gonna be on the lower, like, end o- of-

Mm-hmm.

So put that to one side, food, fuels and otherwise.

So we know that's there.

We know that that experience is there.

That's why that previous chart in terms of what the consumer is feeling has gone so rapidly quickly because we are very, very acute to those volatile changes in those kinds of things.

The trim mean one is the one that we were discussing before about the indirect.

Yep.

But the developments in the Middle East means the baseline forecast assumes that the conflict is resolved soon, fuel prices decline, seeing underlying inflation peaking higher than was expected in February, then declines as demand grows.

volatility in the market at the moment, how would you describe investor sentiment?

Remarkably resilient, I think is probably the word, Ricardo.

I mean...

Australia is not and hasn't fully recovered the losses from what happened from the 28th of February with the Iran war and what have you, but the US more than, and certainly has their volatility index is sitting about 17.

Our volatility index is sitting in roughly about the same.

It's a little bit higher than that, but not by much.

If you look at a historical 10 year average, that's about where they normally sit.

How's all this going to play out?

[laughs]

So, uh, my, my introduction is one of my big, big things that I do on this with you guys all the time, but to get to sit here and do it for the Friday Fun Time is the inspiration and the, you know, the movement of behavior from tax.

Yep.

And the taxation that's taking from that completely has been offset.

It's gone.

So this is...

Indexation doesn't exist, should exist.

Do we need to have the tax bracket so condensed to one end of the scale? No, we shouldn't.

What does all of this mean?

Yeah, so you're right.

There has been the premise that's been put in, particularly by the bigger end of town and by just business investment in general, is that the lowering of interest rates, not just in the US, but across the whole world, is on the idea that they know they have to improve technology.

They know they have to, inverted commas, improve productivity, which they'll argue what AI can do.

But to do that and to get that investment, you obviously have to make the upfront costs.

And so if the investment loans, business loans, debt that the businesses hold is reducing because rates are falling, let's take the US again, the US Federal Reserve, reducing that lending scenario isn't falling as much, the amount of investment is lower because the amount of interest repayments will be higher than forecasted into their numbers.

Now, Meta is using a nice little loophole there in their third quarter update from their third quarter numbers that yes if rates don't fall as far as we're expecting the cost of borrowing that we have will be higher therefore the gearing will impact the overall business direction that's all well and good what is clear though from what meta is saying no matter what interest rates are they're going to make the investment and i think that needs to be put in there very clearly that they are going to make the investment they know they have to they are still the leading social engineered platform on the planet that's in AI.

To what extent now is the market factoring the chance of a rate cut in the future?