Yeah, these reports make predictions, almost none of which ever come true, but still they're interesting to look into where we might be going.

yeah i mean look it's it's hard for you know even really skilled analysts to predict what's going to happen in a month's time let alone in 40 years time um and look there have been a lot of stories written this week about uh this generational report today this is the seventh one in the series they first started in 2002 and one of the stories actually had a look at where the predictions were you know looking at uh in 2002 into the future and essentially have decided well you know, we're not as rich as we thought we were going to be and things are really not quite as good as we thought they were going to be.

Well, that tells you two things.

Either the assumptions were too optimistic back then or something's gone horribly wrong.

And it's probably a combination of the two.

But look, having said that, it is an interesting exercise.

to do these things every few years and map out where you think the problems are going to arise in the future and that's what this report has done and you know and if you do look back and see well we didn't achieve the goals that we had in mind back in 2002 in 2026 why not what's gone wrong what can we do about it to ensure that we avoid those kind of things in the future but yeah look it's a really interesting report in lots of ways because It highlights the fact that we are facing massive challenges into the future.

And is this going to go on for the next 40 years?

Mm

... that you see with our, uh, productivity in Australia.

It's been declining and, uh, in, in recent, more recent times, it's actually gone into negative territory.

So bouncing back from that, well, that's gonna be a, a real challenge.

And of course- What do you have to do to improve your productivity? Well, what it gets down to is investment in infrastructure and investment in technology that makes your workers more productive, you know.

I mean, we've, we've spoken about this before, Carrington.

I mean, you know, if, if I said to you, "Hey, do you wanna go and dig up the, uh, the Melbourne Cricket Ground? And here's a shovel." Well, you'd probably come back in about eight months or a year's time and say, "Finished." But if you had a big, uh, a big tractor that, uh, you know, one of those ones Kerry Stokes owns, uh, you'd go and do it in a couple of hours.

Um, why is that? Uh, is it fair? And do you think it's gonna change?

Mm

... on, on you all the time, so...

And disclosures and all that kinda thing.

So they th- decided they'd just raise money from private individuals, inv- investors, and go around and buy companies up themselves and take them private and run them privately out, away from the public spotlight.

Well, this is the same kind of situation except instead of, uh, equity, it's debt.

And it's sprung up particularly in America, it is just huge in America.

Mm

... became president in 2016.

Is there anything really extra they can do if they can't get China to join in the action?

Well, there's no way that China will join in the action because China needs oil.

Um, it's done a very good job of trying to basically, uh, go down the path of renewables, but it still needs oil, and it does not want to be beholden to the West for oil suppliers.

So it's not going to, uh, abandon Iran and then switch to using American oil, uh, in the... [laughs] You know, what happens if there's some kind of conflict? Do they, does Xi ring up, uh, Donald Trump and say, "Can we still have the oil?" I don't think so.

So they are going to continue doing trade with Iran.

There is no way in the world they will stop that, and everybody knows that.

And, you know, and whenever you put in place these kind of sanctions, there are always workarounds.

But that has been interrupted, hasn't it?

Auckland, wasn't it? Yeah, yeah.

There were years when the Reserve Bank of New Zealand and the New Zealand government were just tearing their hair out trying to figure out what they can do to stop this incredible boom.

Well, they managed to...

Pull it off.

Because as soon as Russia invaded Ukraine and inflation took off globally and everybody started raising their rates, guess who the first country, which country was the first in the world to raise rates? It was New Zealand.

The Kiwis have been, when it comes to economics, have been real trailblazers in lots of ways.

It was the first reserve bank or central bank to target inflation back in the late 80s, early 90s.

What's happening in Canada? Canada?

Is that part of the story here, that you've got these big tech companies asking for money, and therefore the same investors are demanding more from Treasury to lend to the US government, and is it sustainable? Do we have enough cash to actually fund all these things at once?

Well, cash can be created, and it can be created on a whim.

I mean, it, the- the theory behind money is actually quite complex, and it does rely on [chuckles] faith.

Uh, it's almost like a religion, really.

Um, but you're absolutely correct that the, um, the- the, I guess the- the f- source of financing for this expansion has shifted from cash flow, from profits, from internal profits from the likes of Alf- you know, um, Meta and Alphabet and, uh, you know, Microsoft.

They were funding all of these things just through the profits they were making, and they were making enormous profits on their original businesses.

Now they've kind of got to the point where they're using up all their free cash flow, and they've had to resort to raising cash, and that may...

Aussie Home Loans, yeah.

Do you think?

Well, yeah, and I mean, one of the really interesting comparisons here is what happened between 2017 and 2019.

Now everyone's, you know, got there and jumping up and down at the moment about the, uh, the changes in the federal budget to property investors.

Um, but back in 2017, the banking regulator, the Australian Prudential Regulator, Regulation Authority, decided that they would, uh, basically, you know, kibosh investors in, in the property market, and they, they made it very, very difficult for banks to actually lend to investors.

They thought investors were taking over the market, and that, uh, prices were rising way too rapidly.

Now, this was in a, in an era when, uh, interest rates were not moving at all.

And so what we saw was r- really quite steep declines in property prices during that period.

Yeah, and also, well, the economy is slowing, isn't it? In that sense, is the, is the property market simply following whatever else, following what every- everything else is doing?

No, 'cause they're not real price increases.

Then, because they're not con- they're not in the consumer price index, because the Reserve Bank had it removed.

I mean, I, like I say, I can understand why, because if they raised interest rates during a period of high inflation is what you'd do, you'd push up mortgage rates, and that would make the problem look even worse.

And on the downside, if, uh, the economy was slowing and you cut interest rates and mortgage repayments fell, it would look like the inflation was, was declining at faster than is.

So they've tried to cut their own, um, contribution to the problems o- of the economy out of the equation.

But by doing so, it's given a lot of economists this idea that, well, housing isn't really crucial or vital or even m- you know, marginally important when it comes to, to setting interest rates, when in fact it very much is.

And in some ways, you could argue that households are being squeezed by the Reserve Bank through interest rate rises to make room for this massive private sector investment in data centers on the one hand, and then a continued upgrade in public spending forecasts, which we also saw in this statement on monetary policy.

Yeah, and I mean, look, one of the interesting things about household consumption is that it has actually stayed relatively buoyant considering that the, you know, surveys of, of consumer confidence had been at all-time lows.

Yeah.

Yeah, absolutely.

But there'd been a discount in terms of how they were valued.

So the government did a, some, a good job in, in trying to, uh, ensure better transparency around company ownership and transactions and things like that.

And then they decided, "Look, let's make it easier for Koreans to invest because we've now, you know, we've gotten rid of this kind of Korean discount, and we'll get people in there, and we can get them to make money and take their mind off that, that nasty bit of political activity that took place." And so they made it easier to invest, and not just invest with your, with your savings, but with debt as well.

Now, what we've seen in the past 12 months is the most incredible boom that I think has ever taken place in stock market history.

The Korean stock market, the index is known as the KOSPI, went up by a factor of three, three to four.

Yeah.

And what does that remind you of, another [laughs] president we see talking up the stock market and particular targets, you know? [laughs]

Yeah.

I think it was, uh, you know, firstly, uh, um, you know, the idea was to just take everybody's mind off the fact.

Then it was nation building.

You know, "We're actually a really great nation.

We've got big companies here." And they do.

They've got, you know, huge companies that are really into, uh, and crucial to the whole technology and chip making in particular, and we're talking about Samsung Electronics and SK Hynix.

... you know, looking for something a bit extra than your traditional portfolio.

Electric cars won't be useful for everyone in Australia, particularly in the bush where diesel is still going to be a thing.

I think diesel is going to be a thing for industrial use, particularly for a very long time.

Although, you know, there's been quite a bit of work done on electric vehicles.

Trucks as well.

And, you know, I've spoken to people who said it's actually rubbish that you can't make an electric truck.

We've got them here.

We run them up and down Bulleye Pass, you know, to test them all out.

And if we're going to do that with cars as well, we are going to be equally vulnerable.

It might be that this never happens because our energy mix changes enough that we reduce reliance, uh, on that crude oil need.

Yeah, that's, that's true.

I mean, it is more difficult to shift the dial towards renewables, uh, in, in industry, and particularly mining and agriculture.

Uh, they do rely on diesel.

And look, there's a couple of interesting little, uh, footnotes to all of this.

I mean, the amount of diesel we use, we, we are the world's biggest importer of diesel in this country because we've got such a massive mining industry and such huge agricultural industry, plus it's a big continent, requires a lot of transport, and it's all being done with diesel.

So Australia is the world's biggest importer of diesel.

Is this one of the ways that we're seeing the impact of this long-term thinking versus what has been a kind of long-term ignorance of this, uh, push towards electrification?

Yeah,

yeah.

So the raw material, the crude oil is out there in plentiful supply, but there's a shortage of the refined fuels.

And this all gets down to a couple of factors.

One is that, you know, we had that temporary, very, very brief ceasefire before it crumbled and a lot of crude oil came out of the Persian Gulf.

and went to various markets around the world.

We've had a huge amount of reserves that have been released over the course of the past few months, but we're now running out of those reserves.

And it's much cheaper.

Mm

... uh, or, or Kimi K3, and suddenly here we are, we're all very worried about it.

But I guess the real concern here is the fact that, particularly with artificial intelligence, it's moving from a, a closed shop of very, very, um, sophisticated corporations, uh, all interconnected, a handful of them all interconnected, with people throwing huge amounts of money at it.

It's though it's gonna be this...

Artificial intelligence is gonna be proprietary-owned, it's gonna be specialized, it's gonna be owned by just a handful of companies that are gonna control the whole thing, and now we've got this prospect of maybe it's just gonna become another commodity.

Um, it'll be a bit like, uh, electric vehicles and how, how China's essentially taken control of the, uh, automobile market by going into electric vehicles.

Uh, and most other countries, particularly America, is chugging along with, uh, good old-fashioned internal combustion engines.

These Chinese companies, CXMT, Moonshot, it seems like an almost existential threat to what's been really established major US tech titans that we are very invested in as well.

So should we be concerned? Oil prices don't seem to have gone up that much since the news yesterday that essentially the Strait of Hormuz is closed and the war is kind of back on.

It is really odd, I've got to say, that oil prices haven't risen further.

I mean, they are up around about 9% last night and a little more than that over the past few days.

But no, oil prices are incredibly stable.

And it's almost as though everyone's, particularly energy traders, are in this kind of Look, it's all going to work out.

Donald Trump always makes all these grand statements and nothing ever happens out of them.

He'll capitulate at some stage and we'll all get through this.

fuel prices, high gas prices in the States are going to be negative for Donald Trump.

Right? That, that's, that's what they were lending for.

John Elliott was buying up breweries across the world.

I mean, everybody was going crazy.

They were borrowing money here left, right and center.

And it was a similar kind of Ponzi scheme in a way because they were all using debt to, to, to basically take over companies.

And because you'd bid up the price of that company that you were taking over, other companies that, that were in the same kind of industry, the value of those rose as well.

The share prices all rose.

What would it take to move that dial so that it is more advantageous for banks and for people who want to invest, people who want to make money, to look instead to, uh, shares or investing in businesses?

Yeah.

I don't think there's any chance that it will ever go anywhere because, I mean, look, cryptocurrencies as a, I guess, a broad sphere have really kind of started to lose their appeal.

And I don't know that they'll ever really recover.

I can understand why they became so appealing in the first place.

Bitcoin was born in the midst of the global financial crisis, and you had a whole lot of people who were incredibly disillusioned with the global economy, the global financial system, the way governments and central banks manipulated currencies.

you know, a lot of people lost their jobs.

A lot of people lost their houses all around the world.

Why are people moving into data centres, Ian? Tell me.

A look o- look over here type situation.

Yeah.

And but of course, as you know from covering business, a lot of the time when there's a deal about to be struck, one side will strategically leak a lot of information to try and push the deal across the line.

And it may well be that the Nine Network decided, uh, or Nine Entertainment as a company, decided that, uh, "We'll, we'll get this out.

We're paying a huge amount of money here." Um, in the aftermath of that though, there were reports that Nine was trying to, you know, basically secure rights for the entire, not, you know, s- for Stan, and it so, as though the whole thing hadn't been decided.

So it is, it is really quite odd.

Look, i- in terms of comparison with the AFL and, uh, and the NRL, it's quite an interesting, uh, comparison because AFL traditionally is a much more valuable game for a broadcaster because it's a higher scoring game.

Um, do you think the fact that the government didn't go harder on reforms is part of the reason that there are, there is still so much money to be paid for these type of sporting rights? And how big a dent to the business model would be made if the government was to go harder and kind of heavily restrict the amount of advertising, gambling advertising they can sit around sporting events?

Mm

... by around about 25% because these chips are now just extraordinarily expensive, which is one of the things that hasn't been built into this model, which has boosted the share prices of all these companies.

I mean, costs are starting to get out of control, and you've had a breakneck speed of development when it comes to artificial intelligence.

I mean, really nothing I think anybody's ever seen before.

Mm

... to now, you've got these incredibly advanced artificial intelligence models.

Um, but to develop them, to get them out into the marketplace so that companies around the world can buy them as customers requires, um, a final step that I don't think really people have taken notice of.

But could it be that this time it truly is different and it is worthwhile?

I tend to think no, I don't think it's different.

And, uh, and I think to start with, you need to delineate the difference between the investment boom and the technology itself.

So the technology, it is obviously valid, it works.

But radio worked as well.

The internet works as well.

But the investment boom that preceded both of those revolutions in communications technology, you know, there was a lot of people who lost a lot of money out of that.

Business return.

That is what they do.

And, you know, so this week we've seen the resignation of the chairman, Martin Shepard.

We've seen the resignation of a senior partner who was involved in the audits, Eileen Hoggart.

We've seen the resignation of the chief executive some weeks ago now, Andrew Yates.

And so the casualty list is growing.

But I have to tell you that the...

The information they gave to the Senate inquiry last week was really beyond belief because, firstly, they said that they engaged two law firms to go through the investigations, the internal investigation they had.

Tell us, remind us who WiseTech is.

It has nothing to do with the company anyway." I mean, what do you make of the way this has played out and how seriously shareholders should be taking these allegations? A- and, and basically, where, where are we at now with WiseTech Global?

It's a really unique kind of situation in many ways, 'cause I don't think we've ever seen sex scandals like this played out at s- on such a grand scale, uh, and in the public quite so much.

Now, this all blew up about two years ago when, um, and again, outside the realms of the, of the public company, Richard White had had a relationship with a woman, uh, and had been involved with her and had promised a business deal.

Now, something went wrong in the course of that.

She complained that the business deal didn't, uh, proceed, and she wanted money for it, and then she sued him.

And so his personal life suddenly unraveled in front of the, you know, the entire business world and the, and the community at large.

Now, again, you could say that had nothing to do with the company, except that Richard White is not just the founder of WiseTech, wasn't just, uh, the person running it, he's also the major shareholder.

so that they can manage them privately.

I mean, in some ways, they're almost a shadow kind of administration in many respects, particularly in areas of tax and other policy advice, aren't they?

Well, defence is the big one.

And look, this started way back 25 years ago, really when John Howard became Prime Minister.

He came in with a policy essentially of, you know, making government mean and lean and – or lean and keen, if you want to describe it.

And part of that was to basically gut the public service.

You know, we were going to have a very efficient government operation running.

Now, 30,000 public servants were sacked during that period.

It's extraordinary amounts of money and something I don't think that the taxpayers are generally aware of, are they? That so much of administration is being done by these private corporations.

Until he wasn't.

Until...

Well, he was on message.

He was saying it's very consistent, you know, with what he was saying, [laughs] but he went, he took consistency to an extreme level wh- well beyond where it should've been.

Uh, and, uh, I mean, look, she, interestingly, uh, Michele Bullock made reference to that, uh, yesterday where she said, you know, "We didn't act fast enough when Russia invaded Ukraine and, uh, and inflation started to, to, to really boil up.

And we sat there and we watched it and we waited for the numbers to come through, and by that stage it was too late to act." And so sh- that was a, a pretty, you know, insightful admission, I think, from, from her perspective.

But what she's saying is clearly that, you know, th- inflation is still the major thing that they're focusing on.

I mean, what, what's your first take on this situation? And we've seen a big share price bounce in ARN Media, so people seem to be pretty happy with the numbers, even though they're paying him a lot of money to not do much.

But now he's not going to be able to.

No, well, the problem, of course, is the US economy has got the same problems that Australia's got.

We've got an inflation rate that's uncomfortably high.

And the US jobs market report came out on Friday night, which indicated that Australia Jobs growth was much stronger than expected.

And so the pressure is on to do something to rein in the economy there and particularly inflation.

And that can only mean higher interest rates, which is why Wall Street took an absolute dive on Friday night.

But yes, we've actually led the...

Possibly two.