Business + Economy – The Conversation

What the RBA wants Australians to do next to fight inflation – or risk more rate hikes

2026-02-04T01:20:44Z

When the Reserve Bank of Australia (RBA) board voted unanimously to lift the cash rate to 3.85% on Tuesday, the decision was driven by one overriding concern. It wants to stop the rising cost of living from becoming entrenched.

For some, like self-funded retirees, the rate rise was good news. Higher interest means their savings and term deposits will earn more. But for many others, including first home buyers who might have stretched themselves just to get a foot into the housing market, it was a very bad day.

RBA Governor Michele Bullock acknowledged that, saying:

I know this is not the news that Australians with mortgages want to hear, but it is the right thing for the economy.

She warned the alternative – letting inflation keep rising – would be even harder for more Australians.

So what’s the psychology behind the RBA raising rates now and leaving the door open to further hikes if needed? And what does the central bank hope Australians will do in response?

The price squeeze you’re feeling

There’s a striking gap between how the RBA describes the economy and how most Australians experience it.

On paper, things look healthy: unemployment is low, wages are growing.

But as Bullock acknowledged on Tuesday, the daily reality has felt very different.

The price level has gone up 20% to 25% over the last few years, and people see that every time they walk into a supermarket, or they go to the doctor, or whatever – that’s I think what’s hurting people.

That relentless price squeeze is not something you forget, even when the rate of increase starts to slow.

What’s driving inflation up?

The headline consumer price index (CPI) hit 3.8% in the year to December, well above the RBA’s target band of 2–3%. The “trimmed mean” – the underlying measure the RBA watches most closely – rose to 3.3%. Both are too high and moving in the wrong direction.

Bullock singled out three factors contributing to inflation. Each behaves differently and requires a different response.

Housing was the single largest contributor to inflation in December, up 5.5% over the year. That includes rents, which rose 3.9% (or 4.2% stripping out government rent assistance), as well as insurance, utilities, and new construction costs, which rose 3% as builders passed through higher labour and material costs.

There is an irony here. Rising interest rates are intended to cool demand, but they slow housing construction. Limited supply of housing is what’s pushing rents up in the first place.

“Durable goods” are the things we buy to last, such as cars, refrigerators, washing machines, televisions and furniture. Demand for many of those has been higher in the past year.

“Market services” are items such as restaurant meals, taxis, haircuts, gym memberships, medical appointments and holiday travel.

The RBA watches these carefully, because these are services priced by supply and demand in the domestic market. Those prices tend to be “sticky”: once they start rising, they don’t come back down easily.

Wages are also a big part of market services inflation. If the people providing those services are earning more, the cost goes up.

How rate cuts made shoppers relax

This is where the behavioural psychology gets interesting.

The RBA cut interest rates three times in 2025. Each cut sent a signal, whether intentionally or not: it’s OK to spend a bit more.

And spend we did. CommBank data shows Australians spent A$23.8 billion over the two-week Black Friday period, up 4.6% on the year before.

It’s a cautionary tale about “rational expectations”. Each rate cut potentially fuelled the belief that more would follow.

If people feel like they can afford to spend, then they spend. Businesses, sensing demand, may raise their prices to match. That’s exactly the self-fulfilling dynamic central banks worry about.

The 3 ways the RBA hopes we’ll react

When prices go up, as they have been, workers ask for bigger wage rises to keep up. To pay higher wages, businesses lift prices to protect their profit margins. Together, that can create a “wage-price spiral” that becomes very hard to break.

The RBA will be hoping Australians respond to this rate rise in three ways:

spending less
saving more
not asking for big wage rises (although they’d never phrase it that way).

RBA Governor Michele Bullock described raising interest rates as “a very blunt instrument” to bring inflation down, and noted setting rates is “not a science. It’s a bit of an art, really […] We’ve just got to respond as best we can.”

The RBA can’t undo the price rises that have already happened. It can only try to slow down further increases.

Meg Elkins does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

New research shows Australians support buying local for different reasons – and not all will pay more

2026-02-03T19:07:55Z

We have now passed the annual Australia Day peak of calls urging us to “buy Australian” – especially lamb. The iconic green-and-gold “Australian Made, Australian Grown” logo, launched by then-Prime Minister Bob Hawke in 1986, turns 40 this year.

We are also often encouraged to support local businesses in tough times. The recent devastating impacts of bushfires in Victoria highlights the importance of supporting local businesses in need.

But is buying local feasible or desirable for most Australians? Who buys Australian made – and why? These questions were at the heart of our latest research, which drew on a nationally representative survey of 924 Australian consumers.

We found a majority of Australians support buying local. But their motivations for doing so vary significantly – and not all are willing to pay more.

Looking beyond the farmers’ market

Most previous research has focused on local food. Much less is known about motivations for buying other kinds of local goods.

We asked people whether they sought to buy locally produced goods across a wide range of categories, including fruit and vegetables, meat, alcoholic drinks, clothing, furniture, decorative items, personal accessories and other household goods.

If the answer was yes, we asked why – and whether they were willing to pay more to do so.

Who buys Australian made and why?

We found the desire to “buy local” cannot be neatly categorised as progressive or conservative, nor is the desire to support local confined to any one demographic group.

We found most Australians had a strong desire to buy local. Overall, the top three reasons were:

“to support the local economy and jobs”
“better quality”
“I prefer to support small business”.

This was consistent across all product categories, with supporting the local economy and jobs by far the strongest motivation.

What matters to men and women

But there were some notable variations. For example, while responses by gender were fairly similar, men were far more likely than women to seek out Australian-made alcoholic beverages, which they saw as “better quality” and “safer and more trustworthy”.

In the same product category, women were far more interested in the “story” of such products, choosing the response “I like to know where and how it is produced” more frequently than men.

When it came to clothing and personal accessories, concern for labour conditions and environmental impacts emerged as stronger drivers for women.

Who’s willing to pay more?

Perhaps surprisingly, we found income level has little to do with whether people are willing to pay more for locally produced goods. This is where other values come into play.

We found those aged over 45 had the strongest preference for buying local, and this was primarily motivated by a desire to support the local economy and jobs. However, they were also the least willing to pay more. Notably, ethical or values-based considerations were less of a driver for this group.

In contrast, younger people were more likely to buy local for environmental reasons or for reasons related to labour conditions and workplace ethics. Despite being on lower incomes, younger people were generally willing to pay more for these considerations.

Additional differences became clear when we considered respondents’ political views – particularly their views on immigration.

Those aged over 45, who held the strongest desire to support local economy and jobs, also held the most negative views about immigration – saying they felt that immigration numbers were too high and should be tightened.

This was in contrast to the younger respondents who also sought to buy local for reasons extending beyond supporting the local economy. More motivated to buy local for environmental or ethical reasons, this cohort tended to have more positive views about immigration, feeling that immigration numbers were “about right” or could be higher.

Why this matters

The disruption of COVID made local production and buying more urgent and more common. This sped up a shift towards small-scale and local production that began before the pandemic.

Since the pandemic, Australian businesses have experienced further economic and environmental disruptions: natural disasters, the United States’ reintroduction of tariffs, and the ongoing cost of living crisis, to name a few.

However, our research suggests the same act of buying local holds different meanings across demographics and the political spectrum.

These findings are important to consider at the present moment, as anti-immigration sentiment becomes more visible.

Susan Luckman receives funding from the Australian Research Council.

Michelle Phillipov receives funding from the Australian Research Council.

RBA raises interest rates as inflation pressures remain high

2026-02-03T04:51:33Z

The Reserve Bank of Australia (RBA) has lifted the cash rate by 25 basis points to 3.85%, adding to pressure on households and businesses. While the move was widely expected by markets and most economists, the Reserve Bank says inflation risks remain too high to be comfortable.

The RBA said inflation “picked up materially” in the second half of 2025. Governor Michele Bullock told a press conference:

Based on the data we have seen and the conditions here and around the world, the board now thinks it will take longer for inflation to return to target and this is not an acceptable outcome.

The rate rise reflects concern that inflation will not return to the RBA’s 2–3% target range until June 2027, according to the bank’s updated forecasts also released today.

Stronger than expected economic growth means capacity pressures are rising and keeping inflation higher than expected. Progress could stall unless interest rates are pushed a little higher.

It was the first rate increase since November 2023, and followed three cuts in 2025 when inflation was cooling.

Policy set for a year ahead

In the lead-up to the meeting, there appeared to be a gap between market expectations and the RBA’s own comments. Markets and many economists focused on the latest inflation data, which showed a renewed uptick, particularly in prices for services. That data strengthened the case for a rate rise at this meeting.

The RBA, however, has repeatedly emphasised it does not set policy based on short-term movements in inflation.

That message has been reflected in recent meeting minutes and reinforced in a January ABC interview with Andrew Hauser, the RBA’s deputy governor. He said interest rate decisions are guided by where inflation is expected to be in about a year’s time – not where it has been over the past quarter or two.

Today’s decision suggests that, on that forward-looking view, the RBA became less comfortable with the inflation outlook. Rather than a temporary overshoot, the path back to the 2-3% inflation target will take longer than previously thought.

What’s driving inflation?

The latest consumer price index (CPI) figures help explain the Reserve Bank’s caution. Trimmed mean inflation – the RBA’s preferred underlying measure – was 3.3% in the year to December, up from 3.2% in the year to November. That puts underlying inflation clearly above the target range.

More importantly, recent inflation pressures have been led by services prices. Costs related to rents, insurance, health and education have continued to rise, reflecting domestic pressures such as wages and business operating costs.

In its statement, the RBA pointed to stronger demand and ongoing capacity constraints as key concerns:

Private demand is growing more quickly than expected, capacity pressures are greater than previously assessed and labour market conditions are a little tight.

Services inflation tends to fall slowly. Unlike petrol or food prices, it does not usually reverse quickly once it picks up. For the RBA, this persistence increases the risk inflation could remain above target for longer than hoped.

Why the RBA moved now

Faced with these risks, the bank appears to have concluded that waiting would have been the bigger gamble. If inflation stayed above target for too long, or if expectations began to drift higher, the RBA could later be forced into sharper and more disruptive rate rises.

By lifting the cash rate to 3.85% now, the Reserve Bank is trying to stay ahead of the problem. A modest move today may reduce the chance of more aggressive action later.

Australia is out of step

This decision also puts Australia out of step with several other major economies.

In the United States, the Federal Reserve cut interest rates three times in 2025 and is signalling further cuts are likely this year. The European Central Bank has moved even faster, cutting rates eight times between June 2024 and June 2025 to boost growth.

By contrast, Australia’s inflation challenge appears more domestically driven, particularly through persistent services inflation. That helps explain why it is moving in the opposite direction to many of its global peers.

Credibility and what comes next

The quick turnaround after the last rate cut in August may raise questions about the RBA’s earlier judgement. But inflation risks remain tilted to the upside.

The board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target.

For households and businesses, the message is clear. Borrowing costs and mortgage repayments are rising again.

What happens next will depend largely on whether services inflation begins to cool and whether wage growth shows clearer signs of moderation.

If inflation resumes a steady decline towards the target band, this increase could be a one-off rise. If not, the RBA has signalled it is prepared to do more.

For now, the message from the Reserve Bank is simple: inflation is lower than it was, but still too high for comfort – and interest rates are likely to stay higher for longer until that changes.

Stella Huangfu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Australia’s Pacific worker scheme is far from perfect – but we can make it better

2026-02-02T19:05:51Z

The Pacific Australia Labour Mobility scheme (PALM) is a crucial source of workers across regional Australia. About 32,000 people from nine Pacific nations and Timor-Leste work in Australia under PALM.

Over seven months of researching the scheme – interviewing workers, employers, country liaison officers, trade union organisers, community volunteers and academics, as well as digging into the data on it – I didn’t encounter anyone who thought it was a bad idea.

But there were many calls for change to make it work better for everyone. My , published today, suggests where we could start.

Who benefits from PALM now?

PALM has short- and long-term streams. Under the short-term stream, operating since 2012, workers can stay for nine months to do seasonal jobs such as fruit picking.

The long-term stream, introduced in 2018, allows for a four-year stay. Most long-term workers are employed in meat processing.

PALM is widely credited with delivering a triple win.

The first win is for Pacific participants and their communities.

In 2024-25 PALM workers remitted A$450 million to their home countries, an average of $1,500 each per person per month. The money bought food, paid school fees, upgraded housing and financed small enterprises.

Benefits flow beyond immediate families. After working in an Australian abattoir, Devid John Suma returned to Vanuatu and invested $30,000 to supply clean drinking water to his remote village.

The second win is for Australia’s economy. PALM workers make a significant contribution to regional businesses that struggle to attract local workers, from farms to abattoirs.

The third win is that PALM advances Australia’s strategic interests, not least by providing a counter to China’s wooing of Pacific nations.

Pacific leaders might wish for more aid from Canberra and be frustrated by the government’s tepid action on climate change. But well-paid work is something Australia offers that China does not.

Persistent problems

Yet the wins of the PALM scheme have countervailing costs in the pain of separated families, loneliness and broken marriages.

PALM is dogged by reports of workers being abused, underpaid or housed in substandard, overpriced or overcrowded accommodation.

Thousands of PALM workers have quit their approved jobs, “disengaging” from the scheme. This breaches their visa conditions and leaves them vulnerable to exploitation.

Drifting from its original mission

PALM has profoundly changed migration between the Pacific and Australia.

It brings workers to Australia from countries that have seen minimal migration to Australia since Federation, despite their geographic proximity — particularly the Melanesian countries Papua New Guinea, Solomon Islands and Vanuatu that were sources of labour in the late 19th century, when indentured South Sea Islanders built Queensland’s plantation economy.

But the future of PALM is not guaranteed.

Some Pacific countries, including Papua New Guinea, would like more of their nationals engaged under the scheme, while others worry it creates workforce shortages and disrupts community life.

Participation peaked at 34,830 workers in September 2023 and was at 32,365 in November 2025. Numbers in the long-term stream are steady, but fewer short-term workers are being recruited as employers revert to using backpackers — a cheaper, less regulated workforce — for seasonal jobs.

So, PALM has drifted from its original mission of filling seasonal gaps in the rural economy through annual circular migration, to become a labour program for sectors like meat processing and aged care with a constant demand for workers.

In April 2022, three-quarters of all PALM workers were in the short-term stream and a quarter were long-term. Now, more than half of all PALM workers hold long-term visas.

How to make the scheme work better

The PALM scheme changes lives and communities in the Pacific and Australia, often for the better. But its problems must be addressed to realise its potential.

Australian employers will turn away from a scheme that is too bureaucratic, expensive or cumbersome. PALM’s future won’t be secured by burying it under layers of rules and reporting.

has ten recommendations to improve PALM. These include:

making it easier for PALM workers to change jobs, rather than tying them to a single employer
simplifying PALM scheme rules for employers
regulating labour hire at the national level
giving workers access to Medicare while they’re in Australia to stop them missing out on medical attention
and reforming working holiday programs by phasing out the second and third visas offered to backpackers who do work like fruit picking in regional areas.

Australia’s interest in fostering Pacific development and rivalry with China are added reasons to limiting working holidays and expanding the PALM scheme instead.

PALM is a work in progress and will never be perfect. The scheme is shaped by the power differential between Australia and its Pacific partners. And there are tensions between three priorities: being a development program enhancing Pacific wellbeing, being a labour market program benefiting Australia’s economy, and serving a strategic purpose in Australia’s rivalry with China.

Yet when it operates well, PALM is far more than transactional.

Beyond wages earned, jobs filled and diplomatic points scored, it also fosters cultural exchange and personal engagement, binding the peoples of Australia and the region more fully into a “Pacific family”.

Peter Mares received funding from The Scanlon Foundation Research Institute to research and write "Improving PALM: Pacific Australia Labour Mobility", but the views in this article are the views of the author alone and do not represent the position of the Scanlon Foundation. Peter Mares is a fellow at the Centre for Policy Development and a sessional moderator with Cranlana Centre for Ethical Leadership. He is a regular contributor to Inside Story magazine. He has also received past Australian Research Council funding.

ASIC flags $40 million in refunds after review of risky financial products

2026-02-02T03:31:01Z

Australia’s corporate regulator has secured refunds of A$40 million to more than 38,000 investors in risky financial products, following a review of the industry.

The Australian Securities and Investments Commission (ASIC) raised concerns that marketing of high-risk products known as “contracts for difference” or CFDs, failed to clearly explain the risks involved.

This is just ASIC’s latest intervention in more than 15 years of ongoing concern with the potential harm of CFDs to retail investors.

Fine-tuning the marketing of these complex financial products to a suitable audience remains an unfinished task for the regulator.

What are CFDs?

In its report, ASIC said thousands of Australians lose money trading CFDs every year. In 2023-34, over 133,000 people, or 68% of retail clients, lost more than $458 million.

Contracts for difference are a type of financial instrument known as derivatives because they follow the price of an underlying asset, such as stocks, the Australian dollar, and other financial products.

They are traded “over-the-counter” (meaning not on a public exchange) on platforms run by CFD providers.

Investors can profit from both upward or downward movements in financial assets with CFDs. Unlike buying shares, investors need only pay a fraction of the price (the margin) up front to enter into a CFD to track a financial product, with the hope of making a profit.

CFDs are leveraged products, which means an investor is borrowing money to speculate on the price of an asset. A small price change in the underlying stock or commodity can have an amplified effect by increasing the gain – or the loss – on the CFD.

For example, this can be as little as paying $1 upfront to gain the same trading power as $100.

Let’s say you buy a CFD on one Apple share. As you only need to pay a fifth of the Apple stock for the CFD, you can buy five Apple CFDs for the price of one Apple share. So if the price of Apple rises by $1, you could make $5. But if it falls by $1, you could lose $5 dollars.

CFDs are therefore popular with investors as they can trade many financial instruments (betting on rises or falls) and magnify their trading power.

The downside is that trading on margin also amplifies losses if the market goes against the bet that a price will rise or fall. This has led to financial distress and cases of attempted self-harm.

ASIC has been particularly concerned about issuers offering “margin discounts” to clients on particular trades, to reduce the amount or “margin” that the investor pays up front.

This contravenes ASIC’s 2021 product intervention order. ASIC published a further warning to CFD issuers in 2024 to stop this practice.

The complexity and risk of CFDs has meant they are effectively banned in the United States. In Singapore, prospective traders need to pass a customer knowledge assessment before they are allowed to trade CFDs.

Who are the products being marketed to?

CFDs are not for the faint of heart and would only suit investors who are very knowledgeable and have a large appetite for risk. Despite this, retail investors (regular people) are the dominant market targeted by CFDs issuers in their marketing and advertising.

In ASIC’s recent report, the regulator found that CFD issuer websites misled consumers.

Some examples were promoting the underlying instruments, such as shares or commodities, rather than actual CFDs, and overstating the benefits of trading CFDs and understating the risks.

ASIC has forced 46 issuers to rewrite their websites by removing misleading content and making them clearly state that they are offering CFDs, among other changes. One issuer amended 1,000 web pages.

ASIC chair Joe Longo last week floated the idea of banning advertising for high-risk financial products, which would also include CFDs.

The underlying concern is that unsophisticated investors are being attracted to complex financial products that carry great risk of financial loss.

Indeed, ASIC’s report found that only 32% of retail clients made money from CFDs after fees. Of those that traded the most per month (over 50 trades), only 19% were profitable after fees.

Fears vulnerable investors still slipping through the cracks

The key difference is between retail and wholesale clients.

Wholesale clients are generally institutions or sophisticated investors, highly experienced and more likely to trade complex derivatives and make a profit. Wholesale clients are defined in law based on certain tests.

Wholesale clients also lose some of the consumer protections that apply to retail investors, such as receiving product disclosure statements and having access to dispute resolution.

Yet, ASIC found that even wholesale clients lost money, with only 30% making profits.

This raises concerns for ASIC of whether some retail clients were misclassified as wholesale clients by the CFD issuers.

So, it is not the laws that need changing, which clearly define sophisticated investors. What is needed is more scrutiny of how issuers misclassify potentially vulnerable investors.

The statistics are concerning as this means the large majority of investors are losing money trading CFDs, driven largely by paying fees. On the flip side, this means CFD issuers are profiting from some of these losses as they earn the fees.

This raises questions of whether CFD issuers are attracting suitable clientele through advertising, as the losses by investors seem excessive. This suggests that advertising should carry warning labels, similar to advertising for other risky activities, such as sports betting.

Walking a fine line

CFDs have existed for over two decades, with a market that is predominantly comprised of retail investors.

ASIC has managed the fine balance of permitting their access, while regulating issuers on their marketing and operations without banning them outright. Potential investors would be wise to do their own homework to carefully assess the costs and risks of CFDs before wading into the market.

Adrian Lee receives funding from the Australian Research Council. The author is working on a separate ASIC project related to crypto trading.

NZ’s $2.5 billion shoddy building bill: how to fix the ‘build now, fix later’ culture

2026-02-02T00:43:38Z

Getty Images

New Zealand’s residential construction industry contributes roughly NZ$26 billion annually to the economy and employs around 70,000 workers. Yet despite its significance and scale, the sector’s productivity levels have flatlined since the mid-1980s.

In housing construction, “productivity” isn’t a simple measure of output per worker; it refers to the industry’s ability to deliver the right quantity of high-quality homes without significant delays or flaws.

If a builder spends ten hours rectifying avoidable mistakes, for instance, their productivity for the day is effectively zero. And this has become all too common within the sector.

A 2014 study by the Building Research Association of New Zealand (BRANZ) confirms 92% of new houses surveyed had compliance defects.

Subsequent analysis carried out for BRANZ by the New Zealand Institute for Economic Research estimated the annual cost of defective building to the overall economy:

The results show that economy-wide effects of an increase in productivity would see New Zealand’s GDP rise by $2.5 billion, as the industry’s overall costs of production decrease.

That means nearly 10% of the sector’s total value is lost to systemic quality failure. Based on the average construction cost of an Auckland house, that loss represents around 5,000 missing homes every year.

Recognising the productivity problem, the government last year introduced major reforms aimed at speeding up consent processes and allocating financial liability for defective buildings to those responsible.

But while poor productivity is often blamed on procurement methods, technology or labour, our research suggests better quality management is key to remedying the industry’s “build now, fix later” culture.

Commercial viability before quality control

We surveyed the views of 106 residential construction professionals, including general managers, construction managers, site managers, project managers and subcontractors.

They were asked about the influence of quality management on improving residential construction productivity, and about the effects of government policy. The views expressed suggested a culture prioritising time and cost over quality is a systemic norm at the industry level.

We then traced the industry’s problems back to the major policy shifts that began in the mid-1980s. Before then, building quality was anchored in the prescriptive standards set by the Ministry of Works.

By specifying how to build, the ministry acted as a national governor of technical standards. But by 1988, those standards were viewed as a barrier to efficient market operation, effectively ending the era of the state as master builder.

The New Zealand Building Code subsequently replaced the previous prescriptive system with a performance-based model focused solely on outcomes.

Without strict procedural guidance, the industry moved towards a culture that prioritised speed and commercial viability over rigorous quality management.

A ‘tick-box’ culture

To understand why industry performance stalled, we refer to what’s called the “theory of constraints”, which argues a system is only as strong as its weakest link.

In New Zealand’s residential construction sector, we argue, the weakest link is not just poor quality control but the absence of a quality-focused culture in general.

The 1980s shift to a hands-off, self-regulated model helped foster a “tick-box” culture rather than genuine organisational reform. This has meant that with every step forward, the industry is pulled back by the need to fix previous errors, stalling productivity.

On the building site, this manifested as a disconnect between the “work as imagined” (the manuals and checklists from head office) and the “work as done” by builders and subcontractors.

The worst outcomes are well known. New Zealand is still paying for the nearly $47 billion legacy of the leaky homes crisis, which peaked in the early 2000s. Poor quality, damp and mouldy housing contributes to respiratory illnesses costing $145 million annually in hospitalisations.

While policies such as the healthy homes standards for rental properties now exist, such measures mainly treat the symptoms of a deeper problem.

In Auckland alone, one-third of all projects fail their final inspection. The high volume of remedial work required chokes the entire system’s throughput.

The government must lead

Fixing an annual $2.5 billion problem requires a structural shift. Our research proposes a framework where the state, as the primary funder and driver of major construction, sets the standard the rest of the industry must adopt.

The proposed framework is underpinned by “lean principles” designed to minimise waste and encourage continuous improvement through a “plan-do-check-act” cycle. It uses the ISO 9000 standards New Zealand already has in place for exports.

To help achieve this, we argue the government would need to do two things.

Establish a national construction, productivity and quality commission. This would be a nonpartisan body staffed by industry and academic experts to ensure reform survives beyond three-year election cycles.
Mandate quality management systems that align with existing ISO 9000 standards for all government-funded residential projects.

The aim is to create a trickle-down effect, driving culture change throughout the industry. To win stable government contracts, subcontractors would be forced to up-skill and formalise standards-based oversight of their work.

Improved quality and productivity should not be aspirational. New Zealand has 2.5 billion reasons to create the genuine structural reform required.

The author acknowledges the contributions of Senior Lecturer Funmilayo Ebun Rotimi and Associate Professor Nicola Naismith of AUT to the research described in this article.

Mark Kirby does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Why Trump’s new pick for Fed chair hit gold and silver markets – for good reasons

2026-02-01T00:59:23Z

Kevork Djansezian/Getty Images

After months of speculation, US President Donald Trump confirmed he will be nominating Kevin Warsh as the next chair of the US Federal Reserve. The appointment has been closely watched in the context of Trump’s ongoing conflict with the Fed and its current chairman Jerome Powell.

The immediate reaction to the announcement was a significant crash in gold and silver markets. After months of record highs and stretched valuations, spot prices for gold and silver dropped 9% and 28% respectively after the announcement. The US stock market also fell, with major indexes all reporting modest losses.

However, in the context of concerns over Trump’s interference with the Fed, the market crash can ironically be understood as an early vote of confidence in Warsh’s independence and suitability for the role.

Understanding why requires the context of Trump’s ongoing conflict with the Federal Reserve, and the importance of central bank independence to our current global financial system.

Trump’s war with the Fed

The last year has seen Trump in an unprecedented conflict with the Federal Reserve.

Trump appointed current Chairman Jerome Powell back in 2017. However, the relationship quickly soured when Powell did not cut interest rates as quickly as Trump wanted. In characteristically colourful language, Trump has since called Powell a “clown” with “some real mental problems”, adding “I’d love to fire his ass”.

The war of words descended into legal threats. Trump’s Justice Department announced an investigation into Federal Reserve Governor Lisa Cook over alleged fraud in historical mortgage documents. Then last month, in a shocking escalation the Justice Department opened a criminal investigation into Powell relating to overspending in renovations of the Federal Reserve offices.

Both sets of allegations are widely viewed as baseless. However, Trump has tried to use the investigation as grounds to fire Cook. The case is currently before the Supreme Court.

Powell has hit back strongly at Trump, saying the legal threats were

a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.

Powell received support from 14 international central bank chiefs, who noted “the independence of central banks is a cornerstone of price, financial and economic stability”.

Historically, presidential interference with the Fed was a major cause of the stagflation crisis in the 1970s. More recently, both Argentina and Turkey have experienced significant financial crises caused by interference with central bank independence.

Who is Kevin Warsh?

Kevin Warsh is a former banker and Federal Reserve governor, who previously served as economic advisor to both President George W Bush and President Trump.

Originally Trump seemed likely to favour the current director of Trump’s National Economic Council, Kevin Hassett, for the job. However, Hassett was widely viewed as being too influenced by Trump, intensifying fears about Fed independence.

Warsh appears more independent and brings a reputation as an inflation “hawk”.

What is an inflation hawk?

The Federal Reserve is responsible for setting US interest rates. Put simply, lower interest rates can increase economic growth and employment, but risk creating inflation. Higher interest rates can control inflation, but at the cost of higher unemployment and lower growth.

Getting the balance right is the central role of the Federal Reserve. Central bank independence is essential to ensure this delicate task is guided by the best evidence and long-term needs of the economy, rather than the short-term political goals.

An inflation “hawk” refers to a central banker who prioritises fighting inflation, compared to a “dove” who prioritises growth and jobs.

From Warsh’s previous time at the Federal Reserve, he established a strong reputation as an inflation hawk. Even in the aftermath of the global financial crisis of 2008, Warsh was more worried about inflation than jobs.

Given Trump’s past conflict with Powell around cutting interest rates, Warsh might seem a curious choice of candidate.

More recently though, Warsh has moderated his views, echoing Trump’s criticism of the Fed and demands for lower interest rates. Whether this support will continue, or if his hawkish tendencies return leading to future conflict with Trump, remains to be seen.

The market reaction

The crash in gold and silver, and decline in stock markets, suggests investors view interest rate cuts as less likely under Warsh than alternative candidates.

Gold and silver prices typically rise in response to instability or fears of inflation.

The previous record highs were driven by many factors, including global instability, concerns over Fed independence, and a speculative bubble.

That Warsh’s appointment has triggered a market correction in precious metals means investors expect lower inflation, and greater financial stability. The US dollar trading higher also supports this view.

The credibility of the Fed is at stake

The past month has seen much discussion of the changing world order. Canadian Prime Minister Mark Carney recently decried the end of the international rules-based order and called for a break from “American hegemony”.

The global dominance of the US dollar is a crucial plank of US economic hegemony. Though Trump clearly remains sceptical of central bank independence, his appointment of Warsh suggests he recognises the importance of retaining the credibility of the US currency and Federal Reserve.

Whether that recognition can continue to temper Trump’s instinct to interfere with the setting of interest rates remains to be seen.

Henry Maher does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Silver and gold hit record highs – then crashed. Before joining the rush, you need to know this

2026-01-31T00:37:47Z

Zlaťáky.cz/Pexels, CC BY

The start of 2026 has seen gold and silver surge to record highs – only to crash on Friday.

Gold prices peaked above US$5,500 (A$7,900) per ounce for the first time on Thursday, well above previous highs. But by the end of Friday, it had dropped to around US$5068 (A$7,282).

Silver had been making gains even faster than gold. It hit more than US$120 (A$172) per ounce last week, marking one of its strongest runs in decades, before crashing on Friday to US$98.50 (A$141.50).

So what’s behind those surges and falls? And what should everyday investors know about the risks of investing in precious metals right now?

Why gold has been hitting new highs

Gold is the classic safe haven: an asset people buy to protect their savings when worried about financial risks.

With international political tensions rising, trade war threats, shifting signals about where interest rates are heading and a potential changing world order, investors are seeking assets that feel stable when everything else looks shaky.

Friday’s crash in gold and silver was sparked by financial markets reacting to early news of Donald Trump’s nomination of Kevin Warsh as chair of the US Federal Reserve. The US central bank plays a key role in global financial stability.

Central banks around the world have been buying gold at a rapid pace, reinforcing its reputation as a place to park value during periods of uncertainty.

But it’s not just big institutions moving the market. In Australia and overseas, retail investors – individuals buying and selling smaller amounts for themselves – have played a part too.

Those individuals have been increasingly treating gold, silver and other precious metals as a hedge against so much uncertainty, as well as a momentum play – trying to buy in to keep up with others.

As prices have trended upward, more everyday investors have bought in, especially through gold exchange-traded funds (ETFs), which make it simple to gain exposure without storing physical gold bullion.

What’s been driving silver’s surge

While gold was grabbing headlines for much of 2025, silver has been the real showstopper. Before Friday’s fall, the metal had surged more than 60% in just the past month, far outpacing gold’s still impressive run of around 30%.

Unlike gold, silver has a split personality. Industrial uses are driving up demand for silver. It’s critical for clean energy technologies including solar panels, electric vehicles (EVs), and semiconductors.

This dual appeal – as a safe haven, but also as an in-demand industrial commodity – is drawing investors who see multiple reasons for prices to keep climbing.

Every solar panel contains about 20 grams of silver. The solar industry consumes nearly 30% of total global demand for silver.

EVs also use 25–50 grams each, and AI data centres need silver for semiconductors.

The kicker? The silver market has run a supply deficit for five consecutive years. We’re consuming more than we’re mining, and most silver comes as a byproduct of other metals. You can’t simply open more silver mines.

Individual buyers have piled into silver

One of Australia’s most popular online investment platforms for retail investors is CommSec, with around 3 million customers.

Bloomberg tracking of CommSec trades shows how much retail purchases of silver ETFs in particular have spiked higher in the past year.

Over the past year, gold ETF trades on CommSec grew 47%, with cumulative net buying reaching A$158 million. That reflects gold’s established role in portfolios.

Yet despite attracting slightly lower total investment overall at A$104 million, silver trading activity exploded by far more: it’s been 1,000% higher than the year before.

This means retail investors made far more frequent, smaller trades in silver. This is classic momentum-chasing behaviour, as everyday investors piled into an asset showing dramatic price gains.

The pattern is unmistakable: while gold remains the anchor, silver has become the speculative play.

Its lower per-ounce price, industrial demand narrative, and social media buzz make it particularly accessible to retail investors seeking exposure to the precious metals rally, at a much lower price than gold.

The risks every investor needs to know

The data shows Australian retail investors have been buying as prices rise. But this “fear of missing out” approach comes with serious risks.

Volatility cuts both ways. From February 2025 to just before Friday’s sharp drop, the price of silver had surged 269%. But even before that fall, silver’s spectacular gain had come with 36% “annualised volatility” (which measures how much a stock price varies over one year). That was nearly double gold’s 20% volatility over the same period.

What does that mean in practice? As we’ve just seen, what goes up fast can come down quickly too.

Buying high is dangerous. When retail investors pile in after major price increases, they often end up buying near the top. Professional investors and central banks have been accumulating gold and silver for years, at much lower prices.

No income, higher risk. Unlike shares or bonds, metals don’t pay dividends or interest. Your entire return depends on prices rising further from already elevated levels. And as the past few days have shown, the potential for sharp drawdowns is substantial.

Keep it modest. Financial advisers typically recommend precious metals comprise 5–15% of a diversified portfolio. After such extraordinary price volatility, that guideline matters more than ever.

Disclaimer: This article provides general information only and is not intended as financial advice. All investments carry risk.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

NZ’s finance industry is required by law to treat customers fairly – but how do we define ‘fair’?

2026-01-30T01:17:06Z

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Most of us would agree fairness is a good guiding principle in life. Actually defining and applying it in the law, however, isn’t quite so simple.

Since March last year, New Zealand’s financial sector – including banks, insurers and credit unions – has been governed by the Conduct of Financial Institutions regime.

At its centre sits a principle that “financial institutions must treat consumers fairly”. Under the Financial Markets Conduct Act 2013 (and amendments made in 2022), the regime is administered and enforced by the Financial Markets Authority.

Each financial institution must establish, maintain and publish a fair-conduct program that satisfies a set of statutory minimum requirements.

These prescribe internal systems, controls, monitoring and governance processes intended to demonstrate the institution treats consumers fairly in practice. Breaches can incur a “pecuniary penalty order”.

On its face, this is uncontroversial. Fairness offers moral comfort and signals decency and responsibility. But translating fairness into a legal obligation is not without cost.

It also risks compromising consumer autonomy and informed choice by forcing financial institutions to limit the shape or scope of products and services that might otherwise be attractive.

Subjective regulation

While section 446C of the act provides broad definitions of fair treatment, it leaves significant scope for interpretation by regulators and institutions.

The result is a regulatory model that is essentially subjective and which shapes the design and distribution of financial products before they go to market.

This presents practical challenges for intuitions adapting to a fairness standard that is inherently vague. But it also raises questions about the balance between consumer protection and potential regulatory overreach.

In 2024, the government consulted on whether the statutory minimum requirements for fair conduct programs should be repealed or amended.

This was in response to industry concerns that some fairness requirements were either unnecessary or duplicated other regulations, or they were unduly prescriptive given the actual risks of harm to consumers.

Industry submissions generally acknowledged the high compliance costs associated with the current framework while supporting the broader objective of fair consumer treatment.

In response, the government chose to amend rather than repeal those minimum fairness requirements. In 2025, it introduced a draft amendment bill proposing changes to the statutory requirements for fair conduct programs.

If enacted, this may make the regime less strict. But it would also force institutions that have already invested heavily in compliance under the existing law to review and modify their programs once again.

Unintended consequences

This revisiting of the law reflects the the difficulty of defining fairness as a legally enforceable standard. Fairness is not an objective concept. It’s subjective and evaluative. What’s fair to one person may not be fair to another.

Yet the law now requires that financial institutions effectively prove they are designing and offering products and services in ways that align with the Financial Markets Authority’s evolving understanding of fair treatment.

As a result, even where consumers understand a product’s features and willingly accept its risks, the fairness obligation may still require institutions to reconsider whether the product should be offered at all.

On the surface, prioritising consumer interests over consumer choice might seem reasonable. But it can have unintended consequences.

In 2021, for example, the government amended the Credit Contracts and Consumer Finance Act to impose highly prescriptive affordability checks on all consumer lending.

A 2022 investigation by the Ministry of Business, Innovation and Employment found the reforms had caused borrowers who should have passed the affordability test were being declined or offered reduced credit.

Fairness and risk

Because the fairness principle is broad and subjective, even if the Financial Markets Authority’s current interpretation is reasonable there is no guarantee future enforcement will be.

Once parliament embeds an open-ended moral concept in law, it hands significant discretion to whoever interprets it next.

Of course fairness matters. But it should be a moral compass for financial institutions and a cultural expectation for financial markets rather than an opaque licence for regulatory paternalism.

It risks turning financial institutions into overseers of consumer behaviour rather than providers of products and services.

It would be more straightforward to enforce existing laws such as the Credit Contracts and Consumer Finance Act and the fair-dealing provisions in the Financial Markets Conduct Act.

The aim should be to target specific misconduct, strengthen consumers’ financial literacy through education, and intervene where there is genuine, demonstrated harm.

The law should preserve the space for consumers to make their own decisions, even when those decisions involve risk. Fairness is a virtue, autonomy is a right. We should be careful not to sacrifice the second in the name of the first.

Benjamin Liu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

‘Bold’. ‘Elegant’. ‘Introverted’? How words describing wine get lost in translation

2026-01-29T19:12:42Z

karelnoppe/Getty

I recently watched a participant at a wine tasting freeze when asked for their opinion. “It’s … nice?” they ventured, clearly wanting to say more but lacking the specific vocabulary to do so.

The sommelier quickly intervened, noting the wine was “quite elegant, with beautiful structure.” The participant simply nodded, and the conversation ended.

Wine is a multi-billion-dollar export commodity, yet industry “winespeak” can actually stop people feeling they can join in conversations about wine. And often words can get lost in translation – or mean something very different – in fast-growing wine markets such as China, Vietnam and Thailand.

My new research systematically reviewed 77 studies on wine language and metaphor. Building on my earlier research tracking how wine metaphors evolve, it reveals a surprising disconnect: the language used to taste and talk about wine does not travel across cultures as smoothly as the industry assumes.

This matters for the wine industry, because wine descriptions directly influence purchasing decisions and overall enjoyment.

Images in English that don’t travel

The problem is not the use of metaphor itself. In their 1980 book, Metaphors We Live By, George Lakoff and Mark Johnson argue metaphors are essential cognitive tools we use every day, often without even noticing.

When we say a wine has “body” or “backbone,” we draw on our intimate knowledge of physical experience to make sense of taste and texture. This is how human language works.

The problem is when metaphors fail to travel. Consider “body,” a fundamental concept in English-speaking wine cultures when talking about weight and mouthfeel.

Research shows even native English speakers interpret “body” differently. Some believe it refers to flavour, others to texture, still others to alcohol content.

When translated where the word lacks the same associations, confusion multiplies. In Dutch, German, and Hungarian, literal translations (“lichaam”, “Körper”, “test”) trigger awkward anatomical associations. What sounds natural in English reads as bizarre in translation.

The enigma of ‘elegance’

“Elegance” presents a similar challenge. Wine experts across cultures share a core understanding – that a wine is smooth, balanced, refined, or complex. Yet cultural associations can vary.

In Chinese wine reviews, elegance is expressed through mírén (迷人), meaning “charming”, and nèiliǎn (內斂), meaning “introverted”. These are social-aesthetic metaphors that activate entirely different cultural scripts.

This is significant, because wine is what’s called an “experience good”. You cannot judge taste or quality until after you purchase. Consumers rely on descriptions to signal what they are buying.

When metaphors don’t align culturally, the industry is not just failing to communicate but actively eroding people’s trust.

Why some words affect wine ratings

The wine world’s most widespread linguistic habit is anthropomorphism – the attribution of human characteristics.

Industry reviews routinely characterise wines as “shy,” “honest,” or “aggressive”. This is not decorative language; it is cognitive scaffolding.

Describing wine as a person helps us communicate complex sensory perceptions by drawing on our personal experience of human behaviour and emotion.

However, these particular metaphors can carry cultural baggage. Research suggests that wines labelled with feminine terms (such as “delicate” or “elegant”) are perceived as hedonistic products meant for quick consumption, leading consumers to believe they decline at a younger age.

Conversely, wines with masculine descriptors (“powerful”, “bold”) are linked to ageing potential, and receive higher quality ratings.

Although these gendered metaphors might not always hit the price tag directly, they can fundamentally alter if and when a consumer decides to drink the bottle.

Creating better metaphors

As global wine trade increases, industry is eager to connect with new consumers in emerging markets. Yet they often do so using vocabulary rooted in European traditions and Western thinking that do not communicate clearly to international audiences.

Wine marketers find themselves caught between traditional wine language maintaining prestige and authority, and pressure to create new metaphors resonating globally.

The solution is not to stop using metaphors to describe wine – that would be impossible. The question is how metaphors can work inclusively across cultures, rather than carrying cultural baggage that can lead to bias and market undervaluation.

My research suggests a need to rethink how we communicate about wine. This could include writing tasting notes that incorporate more universally understood sensory cues and culturally consistent evaluative language, in addition to traditional expert vocabulary.

Without deliberate attention to how metaphors travel, or fail to travel, across cultures, the gap between expert “winespeak” and consumer understanding will only widen. The industry is not building a Tower of Babel through metaphor itself, but through the assumption that everyone speaks the same metaphorical language.

Allison Creed is affiliated with The University of Melbourne, Wine Communicators of Australia, and the Global Wine Business Institute.

What the ‘mother of all deals’ between India and the EU means for global trade

2026-01-29T01:02:22Z

The “mother of all deals”: that’s how European Commission President Ursula von der Leyen described the new free trade agreement between the European Union and India, announced on Tuesday after about two decades of negotiations.

The deal will affect a combined population of 2 billion people across economies representing about a quarter of global GDP.

Speaking in New Delhi, von der Leyen characterised the agreement as a “tale of two giants” who “choose partnership, in a true win-win fashion”.

So, what have both sides agreed to – and why does it matter so much for global trade?

What has been agreed

Under this agreement, tariffs on 96.6% of EU goods exported to India will be eliminated or reduced. This will reportedly mean savings of approximately €4 billion (about A$6.8 billion) annually in customs duties on European products.

The automotive sector is the big winner. European carmakers – including Volkswagen, BMW, Mercedes-Benz and Renault – will see tariffs on their vehicles gradually reduced from the current punitive rate of 110% to as little as 10%.

The reduced tariffs will apply to an annual quota of 250,000 vehicles, which is six times larger than the quota the UK received in its deal with India.

To protect India’s domestic manufacturers, European cars priced below €15,000 (A$25,500) will face higher tariffs, while electric vehicles get a five-year grace period.

India will almost entirely eliminate tariffs on machinery (which previously faced rates up to 44%), chemicals (22%) and pharmaceuticals (11%).

Wine is particularly notable – tariffs are being slashed from 150% to between 20–30% for medium and premium varieties. Spirits face cuts from 150% to 40%.

In return, the EU is also opening up its market. It will reduce tariffs on 99.5% of goods imported from India. EU tariffs on Indian marine products (such as shrimp), leather goods, textiles, handicrafts, gems and jewellery, plastics and toys will be eliminated.

These are labour-intensive sectors where India has genuine competitive advantage. Indian exporters in marine products, textiles and gems have faced tough conditions in recent years, partly due to US tariff pressures. That makes this EU access particularly valuable.

What’s been left out

This deal, while ambitious by India standards, has limits. It explicitly excludes deeper policy harmonisation on several fronts. Perhaps most significantly, the deal doesn’t include comprehensive provisions on labour rights, environmental standards or climate commitments.

While there are references to carbon border adjustment mechanisms (by which the EU imposes its domestic carbon price on imports into their common market), these likely fall short of enforceable environmental standards increasingly common in EU deals.

And the deal keeps protections for sensitive sectors in Europe: the EU maintains tariffs on beef, chicken, dairy, rice and sugar. Consumers in Delhi might enjoy cheaper European cars, while Europe’s farmers are protected from competition.

India’s seafood exporters stand to benefit from the deal. Elke Scholiers/Getty

Why now?

Three forces converged to make this deal happen. First, a growing need to diversify from traditional partners amid economic uncertainty.

Second, the Donald Trump factor. Both the EU and India currently face significant US tariffs: India faces a 50% tariff on goods, while the EU faces headline tariffs of 15% (and recently avoided more in Trump’s threats over Greenland). This deal provides an alternative market for both sides.

And third, there’s what economists call “trade diversion” – notably, when Chinese products are diverted to other markets after the US closes its doors to them.

Both the EU and India want to avoid becoming dumping grounds for products that would normally go to the American market.

A dealmaking spree

The EU has been on something of a dealmaking spree recently. Earlier this month, it signed an agreement with Mercosur, a South American trade bloc.

That deal, however, has hit complications. On January 21, the European Parliament voted to refer it to the EU Court of Justice for legal review, which could delay ratification.

This creates a cautionary tale for the India deal. The legal uncertainty around Mercosur shows how well-intentioned trade deals can face obstacles.

The EU also finalised negotiations with Indonesia in September; EU–Indonesia trade was valued at €27 billion in 2024 (about A$46 billion).

For India, this deal with the EU is considerably bigger than recent agreements with New Zealand, Oman and the UK. It positions India as a diversified trading nation pursuing multiple partnerships.

However, the EU–India trade deal should be understood not as a purely commercial breakthrough, but also as a strategic signal — aimed primarily at the US.

In effect, it communicates that even close allies will actively seek alternative economic partners when faced with the threat of economic coercion or politicised trade pressure.

This interpretation is reinforced by both the deal’s timing and how it was announced. The announcement came even though key details still need to be negotiated and there remains some distance to go before final ratification.

That suggests the immediate objective was to deliver a message: the EU has options, and it will use them.

What does this mean for Australia and India?

For Australians, this deal matters more than you might think. Australia already has the Australia-India Economic Cooperation and Trade Agreement, which came into force in late 2022.

Australia has eliminated tariffs on all Indian exports, while India has removed duties on 90% of Australian goods by value, rising from an original commitment of 85%.

This EU-India deal should provide impetus for Australia and India to finalise their more comprehensive Comprehensive Economic Cooperation Agreement, under negotiation since 2023.

The 11th round of negotiations took place in August, covering goods, services, digital trade, rules of origin, and – importantly – labour and environmental standards.

The EU deal suggests India is willing to engage seriously on tariff liberalisation. However, it remains to be seen whether that appetite will transfer to the newer issues increasingly central to global trade, notably those Australia is now trying to secure with Indian negotiators.

Chasing an Australia-EU deal

Australia should take heart from the EU’s success in building alternative trading relationships.

This should encourage negotiators still pursuing an EU–Australia free trade agreement, negotiations for which were renewed last June after collapsing in 2023.

These deals signal something important about the global trading system: countries are adapting to American protectionism not by becoming protectionist themselves, but by deepening partnerships with each other.

The world’s democracies are saying they want to trade, invest, and cooperate on rules-based terms.

Nathan Howard Gray receives funding from Department of Foreign Affairs and Trade.

Mandar Oak and Peter Draper do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

Australian inflation jumps, adding to chances of an RBA interest rate hike

2026-01-28T03:49:13Z

Inflation has risen further above the Reserve Bank of Australia’s 2–3% target. There is now a very real prospect the Reserve Bank will feel it needs to increase interest rates at its meeting next week, with an announcement due on Tuesday afternoon.

Inflation rose 3.8% in the year to December, up from 3.4% in the year to November, according to the latest Australian Bureau of Statistics consumer price index (CPI) report.

The Reserve Bank will look at the data for the December quarter at its February 2-3 meeting.

Financial markets and economists had been leaning towards the possibility of an interest rate rise, as inflation proved stubbornly high in recent months and the jobs market picked up. Today’s inflation data has led markets to regard an interest rate increase as more likely.

Where prices moved the most

Comparing prices in the December quarter of 2025 with the same period in 2024, strong rises were recorded for beef and veal, up 10.7%, reflecting strong overseas demand for Australian red meat.

The ending of rebates saw electricity prices rise 26%, reversing previous sharp declines. The cost of child care was up 11.3%. The prices of some food items, such as pork, poultry, seafoods and cheese, were little changed over the year. So were prices of furniture and pharmaceuticals. But very few goods and services showed significant price falls.

The Reserve Bank’s preferred indicator for the underlying trend in inflation is the “trimmed mean”, which takes out items with the most extreme price changes. This measure was 3.4% in the December quarter, up from 3.0% in the September quarter.

This is significantly above the top of the target range and almost 1% above the mid-point of the range, which is where the central bank would like to see inflation. It is also above the RBA’s most recently published forecast.

This measure of underlying inflation initially dropped rapidly from its 6.8% peak at end of 2022, once the Reserve Bank started raising interest rates. Progress in returning to the target range, unsurprisingly, slowed going into 2025. But inflation has now risen again.

The International Monetary Fund recently warned Australia is “projected to see some drawn-out persistence in above-target inflation”.

But another international body, the Organisation for Economic Co-operation and Development, was more optimistic, commenting “if, as expected, inflation turns back down during 2026, there may be some space for further easing” in interest rates.

The more volatile monthly series

As well as the long-running quarterly series, the Bureau of Statistics has recently published monthly data. The December 2025 data is only the third complete monthly CPI issued.

Previously, the monthly update was called an “indicator” because it covered fewer goods and services than the long-running quarterly CPI report.

But the complete monthly CPI is not only new, it is also more volatile than the long-running quarterly series. So this increase in reported inflation needs to be interpreted with care.

As you can see from the chart above there have been periods such as August–September 2023 when the monthly measure briefly spiked up but inflation was still on a downward trajectory. So the annual increase of 3.8% in December may be exaggerating the problem.

Why the latest jobs data matters too

The recent jobs data showed a very healthy labour market. About 65,000 more people were employed in December than November. The unemployment rate dropped from 4.3% to 4.1%.

Low unemployment is a good thing. Indeed, full employment is explicitly an objective of the Reserve Bank.

The RBA would only be concerned about lower unemployment if they thought the labour market was overheating and causing inflationary pressures. Wages growth has been 3.5% or less for the past year. The RBA’s latest forecast is for it to slow to 3%. If labour productivity can grow close to 1%, as the bank expects, that would be consistent with inflation around the middle of the RBA’s 2–3% target range.

Nor is the latest annual growth in the economy, around 2%, indicating an economy that is overheating.

What it all means for interest rates

The increase to 3.4% in the RBA’s preferred measure of underlying inflation means the bank will seriously consider lifting its key interest rate, the “cash rate”.

This would be an unusually rapid turnaround after the recent interest rate cuts. Generally, the RBA will hold rates steady for a longer time – perhaps a year or so – before reversing course.

The Reserve Bank would want to be sure there has truly been a sustained increase in the inflationary pressures in the economy, or that they had earlier been underestimating them.

The central bank would want to avoid a situation where, after cutting rates last August, it raised them again in February – then had to cut again soon after if the economy slowed again.

John Hawkins formerly worked as a senior economist at the Reserve Bank.

A new company tax mix has been proposed. We need to be careful how we assess it

2026-01-27T18:49:15Z

Steven Wei/Unsplash

Australia has a problem. Across the economy, business investment has been sluggish for the past decade, leaving policymakers reaching for solutions.

Weak business investment can leave the economy stuck in low gear, operating without enough equipment or technology and failing to meet its potential. It’s tempting to think that if investment could be revived, higher living standards would follow. But it is not that simple.

In a recent report on creating a more dynamic and resilient economy, Australia’s Productivity Commission proposed some big changes to the way businesses are taxed in Australia, including lowering the corporate tax rate for most businesses and introducing a unique new cash flow tax.

So, what exactly is the Productivity Commission proposing – and would it help boost business investment? And crucially, would it improve living standards for Australian people?

Lower tax rates – with a catch

Right now, there are two rates of company tax. Businesses with turnover of less than A$50 million a year are taxed at 25%. Larger businesses, with turnover of more than $50 million, face a 30% tax rate.

The proposed reform of the corporate tax system has two key elements. First, almost all businesses would be taxed at 20%. Very large corporations, with turnover above $1 billion, would face a rate of 28%.

Second, all businesses would pay a new 5% tax on their “net cash flow”. The government would collect less revenue through company tax, but it would get some of it back through the net cash flow tax. More on this later.

The profitability problem

The Productivity Commission is concerned about potentially profitable business ideas that become unprofitable when company taxes are taken into account.

For example, $1 million invested in building a restaurant might generate profits of $1.3 million over its lifetime, making it a profitable activity. But after paying 25% in corporate tax, or $325,000, the restaurant only generates $975,000 for the investor.

Knowing she will make a loss, the investor will decide not to make the investment.

Tax obligations may erode the profitability of certain investments. Louis Hansel/Unsplash

Now, suppose the corporate tax rate was cut to 20%. Corporate tax paid by the restaurant would be $260,000, leaving $1.04 million for the investor. The investor sees she will make a positive return and decides to finance the restaurant. This argument is at the heart of the Productivity Commission’s recommendation to cut the rate of company tax.

In reality, the picture isn’t quite this simple. The investor must also account for the time value of money, various risks and opportunity cost, and the returns she could be making if she invested the money in other ways.

When calculating profits, the tax office includes depreciation as a cost. This deduction reduces the corporate tax bill significantly compared to our hypothetical example. Depreciation deductions are spread over many years so they are worth less than if the deduction on the whole investment was allowed up front. This is important when we talk about a cash flow tax later.

Foreign and domestic investors

Another complication is Australia’s unique dividend imputation system. If the investor lives in Australia, the tax the company has already paid on its profits is treated as if she paid it herself.

When she does her tax return, that company tax counts as a franking credit towards the income tax she owes on all her income. This means the investor is indifferent to the company tax rate because it works like an advance payment towards the personal tax she has to pay anyway.

If dividend imputation was available to everybody, the corporate tax system would be a very leaky bucket indeed – all the revenue it collected would be lost again when credited to the personal income tax paid by investors.

But a lot of the money invested in Australia comes from foreign investors. They don’t pay personal income taxes to the Australian government, so the company tax we collect from them stays in the bucket.

This is the key to making corporate income tax cuts have an impact. But it is also the reason we need to be careful about how we assess the success of the proposed policy.

With lower corporate taxes, foreign investors will likely invest more in Australia, leading to a larger economy. Our economic modelling at the Centre of Policy Studies, published in the Productivity Commission’s interim report, finds the economy (or GDP) will be larger by 0.2% in the long run. This sounds good – but there’s a catch.

When the Australian government collects less tax from foreign investors, Australia’s income falls. Our modelling finds gross national income will be smaller by 0.3% in the long run. The economy will be larger, but less of it will belong to us.

A new tax on cash flow

Alongside recommendations to cut the corporate tax rate, the Productivity Commission has proposed introducing a cash flow tax.

This is a relatively rare form of taxation used in only a few countries. Like corporate tax, a cash flow tax is levied on profits.

But the big difference is that a cash flow tax treats investment costs as an immediate tax deduction, rather than gradually depreciating the investment.

This is attractive because it does not change the incentive to invest. By treating the investment as one big tax deduction at the beginning of its life, an investment that is profitable in a tax-free world will also be profitable under a cash flow tax.

This means the government can collect tax revenue from companies without having a negative impact on investment.

Under a cash flow tax, highly profitable businesses will pay a relatively large amount of tax, while businesses that are just breaking even will pay very little. Unsurprisingly, lobbyists for big business have urged Treasurer Jim Chalmers to ignore the recommendation.

A company tax cut results in lower income for Australians, but adding a cash flow tax reverses these losses by collecting more revenue from foreign investors and multinational corporations. Our modelling finds this package would lead to gains in Australia’s gross national income of 0.4% in the long run. The Productivity Commission’s report now rests with the treasurer for consideration.

The Centre of Policy Studies at Victoria University was commissioned to conduct some of the economic modelling which is quoted in the Productivity Commission's interim and final reports mentioned in this article.

Back to school: what are the money lessons to teach your kids at every age?

2026-01-26T18:54:20Z

Atlantic Ambience/Pexels

As parents prepare for another school year, there’s one subject that often gets overlooked: money.

Financial literacy isn’t just about numbers. It’s about building skills that will shape your child’s future decisions, from buying their first car to planning for retirement.

The good news? You don’t need to be a finance expert to teach these lessons. Start with age-appropriate concepts and build from there. Here’s what to focus on at each stage.

Primary school (ages 6–12): Making money real

Young children understand money better when they can see it and touch it. This is the perfect time to introduce pocket money – a regular allowance that teaches them money doesn’t appear magically. And once it’s gone, it’s gone.

Start small. Five dollars a week gives a seven-year-old enough to make choices without overwhelming them. Should they buy that chocolate bar now, or save for three weeks to get the Lego set they really want?

Making saving visible can help young kids. cottonbro studio/pexels

This waiting game is crucial. It teaches delayed gratification, which research shows is linked to better financial outcomes later in life. When your child saves for weeks to buy something they’ve been eyeing, they’re learning that big goals require patience and planning.

Use clear jars or piggy banks so kids can literally watch their money grow. It makes saving visible and satisfying. Some families use a three-jar system: spending, saving, and sharing (for charity or gifts). This introduces the idea that money serves multiple purposes.

Let them make small mistakes too. If your eight-year-old blows their entire allowance on stickers and regrets it by Wednesday, that’s a five-dollar lesson that could save them thousands later.

Secondary school (ages 12–18): Real-world money management

Teenagers are ready for more complex financial concepts. This is when you shift from teaching about money to teaching with money.

Open a bank account together. Walk them through how banks work. Tell them that banks are not just storing money, they’re businesses that pay you interest to keep your money there and charge interest when you borrow. Explain that the interest you earn on savings is usually tiny, while the interest you pay on debts is much higher.

Introduce the concept of debit cards, but explain how they differ from credit. A debit card only spends money you already have. This is a good time to show them how to check their account balance and track spending through banking apps.

Talk about wants versus needs. Your teenager needs school shoes. They want the $200 branded pair. This isn’t about saying no. It’s about showing them trade-offs. “If you want those shoes, you’ll need to contribute $100 from your savings. Are they worth it?”

If your teenager gets a part-time job, teach them to check they’re being paid correctly. The Fair Work Ombudsman website has easy tools to calculate award rates, the minimum pay rates set for different industries and age groups. A 16-year-old working in retail should know what they’re entitled to earn.

This is also the time to introduce the concept of paying yourself first. When money comes in, savings come out first. Even putting aside 10% teaches the habit of treating savings as non-negotiable – it’s not whatever is left over.

Many young people get their first part-time job in hospitality. Frazao Studio Latino/Getty

School leavers (ages 18+): Building wealth basics

Young adults entering work face a new financial landscape. They’re earning more, but expenses grow too, such as transport, social life, and maybe rent.

Start with superannuation. This is money an employer must put aside for an employee’s retirement. It may seem irrelevant when your child is 18, but a young person who understands super early has a massive advantage.

Here’s why: compound growth. Money invested at 18 has 40+ years to grow. Even small amounts become significant. If you put an extra $20 a week into super from age 18, you could have at least an extra $300,000 by retirement, thanks to compound returns. That’s the snowball effect, when the investment gains on your contributions start earning returns as well.

Introduce investing apps, but with caution. Digital investing apps such as CommSec Pocket and Stake make investing accessible with small amounts. They let young people buy into diversified funds, which are collections of many different investments, rather than trying to pick individual shares.

Explain the fundamental trade-off: higher potential returns come with higher risk. Shares can grow more than savings accounts, but they can also fall in value quickly.

Teach them about the share market without jargon. When you buy shares, you own a tiny piece of a company. If the company does well, your share becomes more valuable. If it doesn’t, your share can lose value.

Diversification – spreading money across many companies – reduces the risk of losing everything if one company fails.

The lessons that matter most

Financial education isn’t really just about money. It’s about decision-making, delayed gratification, and understanding that every choice has trade-offs. It’s a life skill you build over time, one conversation and one decision at a time.

The most valuable lesson you can teach at any age? Money is a tool, not a goal. It gives you choices and security. Teaching your children to use that tool wisely is one of the greatest gifts you can give them.

Start these conversations early. Make them normal. And remember, you’re teaching as much by how you handle money as by what you say about it. Children notice when you compare prices, when you talk about saving for holidays, when you decide something isn’t worth the price.

Angel Zhong does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

How this ‘dirtbag’ billionaire chose to do capitalism differently

2026-01-25T18:43:09Z

Budrul Chukrut/SOPA Images/LightRocket via Getty Images

Few people globally have influenced business, sport, the environment and philanthropy like Patagonia founder Yvon Chouinard.

Chouinard’s inventive approach across these spheres makes the recent biography Dirtbag Billionaire by The New York Times journalist David Gelles an intriguing read.

Review: Dirtbag Billionaire: How Yvon Chouinard Built Patagonia, Made a Fortune, and Gave It All Away – David Gelles (Text Publishing)

The anti-authoritarian entrepreneur started out making basic rock-climbing equipment. He then built a business reputation based on ethical commerce, and eventually gave away his company, promising all profits to fighting the climate crisis.

From an Australian perspective, there are lessons to learn given growing environmental and climate concerns, while both corporate giving and corporate distrust have surged in the past decade.

The wild early years

Chouinard prefers the “dirtbag” label to that of businessman or billionaire. It’s a reference from his 1960s lifestyle, a term for someone who sleeps rough, roams widely and disdains material possessions.

As a young climber chasing adventures with friends on rock faces, rivers and waves, Chouinard lived frugally. He ate cat food, squirrels and porcupines.

In these years, inventive Chouinard revolutionised climbing. Using a junkyard forge, he hand-crafted innovative, reusable, softer metal spikes to drive into rock faces. At first selling from his car boot, he built up a US and international customer base.

But, faithful to his environmental values, Chouinard then risked the company by ditching his original top-selling metal spike that damaged rock faces for one that did less harm to the cliff face.

Yvon Chouinard at an event in 2023. Patagonia built customer trust with the company’s environmental values. Ilya S. Savenok/Getty Images

Along the way he employed many fellow climbing, surfing and kayaking enthusiasts, prioritising employee wellbeing and engagement in the business. This was decades before employees were seen as a stakeholder, or internal culture was considered important in a business.

A clash of values

However, with the success of his Patagonia clothing business formed in 1973, Chouinard the conservationist had entered a highly capitalistic sector. The retail market was based on trend-driven overconsumption and exploitative labour and environmental practices.

His quest to do capitalism differently is instructive.

Despite higher costs, Chouinard moved the company into organic cotton use and encouraged regenerative topsoil practices. The principled actions built customer trust and loyalty.

His approach also inspired others who saw decisions that put environmental considerations above profit were good business all round.

As Patagonia grew into a billion-dollar company, he maintained a policy of donating 1% of sales (not just profit) to the environment, no matter how tight the times.

Chouinard co-established 1% for the Planet in 2001 as an accrediting body to encourage companies worldwide to donate 1% of their sales to environmental organisations. Since founding, over 11,000 companies in 110 countries have donated a total of US$823 million (A$1.2 billion).

Chouinard also actively called out corporate greenwashing, and Patagonia was a corporate activist on multiple issues. This included suing US President Donald Trump in 2017 to keep wilderness reserves safe from oil and gas exploration and land development.

Chouinard started out supplying basic rock climbing equipment. Yente van Eynde/Unsplash

One of the first B Corps

In another leadership move, Patagonia in 2012 became the first California company to become a certified Benefit Corporation, better known as a B Corp.

This is a legally binding, transparently measured commitment to act sustainably, live up to independent performance standards and consider worker, society and environmental interests.

Then, aged 83 in 2022, Chouinard established a pioneering succession trust structure and nonprofit collective for the business. This would see Patagonia continue as an independent, environment-led activist company rather than be floated or sold and have its values and foundations diluted.

This organisational restructure supercharged Chouinard’s philanthropy.

The family retains a voice, while giving away 100% of their estimated US$3 billion and all of Patagonia’s future profits that are not reinvested in the business. (US$100 million in 2022).

Even the legendary industrialist and philanthropist Andrew Carnegie only gave away 90% of his fortune.

Lessons for future philanthropists

My previous research records the top five motivations for Australian philanthropists as:

making a difference
giving back to the community
personal satisfaction
aligning with moral or philosophical beliefs, and
setting an example.

Chouinard’s philanthropy touches on all of these.

US philanthropy researcher Paul Schervish uses the phrase “hyperagency” to capture the character and capacity that some individuals have to achieve the outcomes they deem important for society.

Schervish suggests such changemakers build their own world rather than staying within the constraints of traditional approaches.

Chouinard built his own version of capitalism. He continues to argue the Earth is the only resource base for business, and is therefore the prime business stakeholder. Without it, there are no customers, shareholders, employees or business.

Patagonia’s core mission became: “We’re in business to save our home planet”. The company established Earth as its major shareholder.

A message in Dirtbag Billionaire for givers small and large, individual and corporate, is that authentic giving is about values.

Such authentic giving across a lifetime using money, time, voice, networks, workplaces and ethical principles is rarely so well on display as in the life of Yvon Chouinard.

Wendy Scaife does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Digital ‘tokenisation’ is reshaping the global financial industry. Is NZ ready?

2026-01-22T19:07:01Z

Getty Images

Imagine investing in a premium Central Otago vineyard, or owning a slice of prime Wellington commercial property, all without needing millions in upfront capital.

Through asset “tokenisation”, this is becoming a reality.

Essentially, tokenisation converts physical and financial assets into digital records, called tokens, which are stored using blockchain technology.

Some tokens represent ownership in the way digital property titles or share certificates do. Others might be used for customer loyalty schemes, digital event tickets to prevent scalping, or a means to make fast, low-cost international payments.

The blockchain itself is basically a shared digital ledger distributed across computers, with transactions linked into a cryptographic chain. This decentralisation and transparency makes tokenisation both trustworthy and efficient.

Why tokenise assets?

For decades, investing in real-world assets has meant navigating lawyers, banks, brokers, registries, mountains of paperwork, hefty transaction costs and prohibitive minimum spends.

A $10 million commercial building, for example, might require investors to commit large proportions of the full amount, locking out all but the wealthiest buyers.

Tokenisation changes this equation for both buyers and sellers. That same building could be split into 100 digital tokens, each representing 1% ownership worth $100,000.

Like owning shares in a company, token holders benefit from rental income and property appreciation proportional to their stake. For sellers, it’s a way to raise capital by attracting many smaller investors rather than a few large ones.

Tokenisation is already happening

Digital assets are already woven into New Zealand’s economy. BlockchainNZ reports nearly NZ$8 billion of digital assets traded annually, with interest in digital assets becoming more common.

But New Zealand stands at an important juncture. Existing financial regulations weren’t designed with tokenisation in mind, meaning progress is slow and complex.

Industry bodies such as BlockchainNZ, the Banking Association and Payments NZ warn that even slight changes in a token’s features can alter its legal classification, making compliance confusing and expensive.

Without clear rules, New Zealand risks losing billions to overseas markets offering greater regulatory certainty.

Global momentum is undeniable

Executives from multinational investment company BlackRock have compared tokenisation today to the internet in 1996, something poised for explosive growth.

Accounting firm Deloitte projects US$4 trillion in global real estate will be tokenised by 2035, up from less than US$0.3 trillion in 2024.

In November 2025, Australia introduced legislation for digital asset platforms, with Treasurer Jim Chalmers citing potential annual gains of A$24 billion.

Dubai launched its first tokenised real estate platform in May 2025, projecting US$16 billion in value by 2033. J.P. Morgan Asset Management has launched MONY, a tokenised cash fund that invests in relatively safe short-term debt securities.

BlockChainNZ held New Zealand’s first real estate tokenisation forum in Auckland in July 2025. Industry analysis suggests tokenising just 2–3% of the domestic property market could unlock over NZ$60 billion in transaction volume.

New Zealand’s position

New Zealand has genuine advantages: internet penetration exceeds 95% of the population; it is a member of the intergovernmental Digital Nations coalition; and it operates an established digital land-title system, ideal for real estate tokenisation.

The regulatory conversation is underway, with the Financial Markets Authority releasing a discussion paper on tokenisation in September 2025.

But the Banking Association has identified a critical gap: while existing laws are technology-neutral, they lack clarity for tokenised products.

It recommends legislative reviews, controlled testing of tokenised financial products, and guidance for industry participants and consumers on regulation and compliance.

Ultimately, New Zealand will need a cohesive framework that actively enables safe innovation. As one industry insider has argued:

the rails for tokenisation are being laid now and if we don’t help build them, we’ll be forced to run on tracks designed by others.

Navigating the risks

Tokenisation also brings serious challenges. Local financial laws were written for paper certificates and bank vaults, not digital tokens and blockchain networks.

When an Auckland property developer tokenises an apartment building, or a Marlborough winery offers digital shares, which rules apply? Are these securities? Property titles? This uncertainty creates a compliance minefield.

Technology risks compound these problems: cybersecurity vulnerabilities, digital key theft or loss, bugs or flaws in blockchain code that hackers can exploit, and malfunctions in the technology infrastructure can all cause irreversible losses.

Energy-intensive blockchain systems raise environmental concerns, while weak consumer protections can expose users to fraud and scams.

Tokenised assets can be highly volatile, with rapid price swings encouraging speculation and panic selling. Easy round-the-clock trading amplifies boom-and-bust cycles. When everyone can trade with a few clicks, panic can spread rapidly.

The Financial Markets Authority has warned that market manipulation becomes easier across multiple unregulated platforms, money laundering may be harder to detect in cross-border transactions, and fraud (from fake tokenised assets to digital Ponzi schemes) can scale quickly.

None of this means tokenisation should (or can) be avoided. The challenge for New Zealand is to keep up with this form of financial innovation, and to retain investment dollars that might otherwise migrate to other jurisdictions.

How to get managers to say yes to flexible work arrangements, according to new research

2026-01-22T19:06:13Z

Diva Plavalaguna/Pexels

In the modern workplace, flexible arrangements can be as important as salary for some. For many employees, flexibility is no longer a nice-to-have luxury. It has become a fundamental requirement for staying in the workforce, especially after COVID.

Reports – from the Chartered Institute of Personnel and Development, professional services firm Aon and UNSW – indicate while a substantial number of workers prioritise flexibility, many of their requests are still being declined.

This leaves many employees with a stark choice: either conform to standard, rigid office hours or look for better conditions elsewhere.

The stakes of these negotiations are remarkably high. For the employee, a successful deal can mean the difference between professional growth and total burnout. For the employer, it is a major lever for retaining top talent.

Yet, many employees approach these conversations as simple “asks”, unaware that the success of their requests often hinge on invisible factors that have little to do with their actual job performance.

In our new research, published in the Journal of Occupational and Organizational Psychology, we wanted to provide an evidence base for how to negotiate for flexible work, so both employers and employees can benefit.

Request for approval

To understand why some flexible work requests are approved and others are rejected, we ran two studies with more than 300 participants.

Successfully negotiating flexible working arrangements with a manager can be tricky. charlesdeluvio/Unsplash

Instead of asking people what they think influences flexible work approvals, we asked them to make real decisions on a series of requests presented to them.

To strengthen our findings, all participants had management experience.

In both studies, participants read short requests from hypothetical employees asking to work flexibly.

Each request was designed to look realistic, but was given a focus on one of four different things:

caring responsibilities
improved productivity
greater wellbeing via work-life integration
task completion instead of hours worked.

In the second study, we varied both the gender of the requester and how much flexibility they asked for: either two or four days working from home.

What we found

Across both studies, a clear pattern emerged. Requests related to caring responsibilities and improved productivity had the greatest success. Requests which focused on improved personal wellbeing or greater autonomy over their time were less successful.

However, contrary to what we expected, we found men and women were equally likely to be approved for flexible work.

This suggests that, at least at the approval stage, “gendered flexibility stigma”, or bias against workers (usually women) who access flexible work arrangements, may be less pronounced than earlier research has suggested.

Overall, we found managers have a clear preference for fewer days of flexible working. Requests for two days of flexible work were much more likely to be approved than requests for four days.

Some good news for parents

Remote work, normalised in the pandemic, allowed fathers to become more engaged in caring.

Our results indicate fathers won’t be penalised for asking for flexible work to provide care to their children. However, there’s an important caveat. While their requests were just as likely as women’s to be approved, our research cannot speak to the impact on men’s (or any workers’) careers after they take up flexible work.

The stigma against those who cannot be seen in the office or workplace – a perceived lack of commitment, judgements about decreased productivity, reduced likelihood of getting promoted – may still be present.

Workplace changes caused by the pandemic allowed fathers to become more engaged in caring. Vitaly Gariev/Unsplash

Other ways to make a strong case

Flexible work debates often focus on and even favour parents. That can leave non-parents with fewer options. Our research provides good news for those without caring responsibilities who still want to embrace the benefits of flexible work.

We found the business case was equally as effective as the child-care argument. Non-carers should strongly consider the mutual benefits to their employers and to themselves and be sure to make a strong case for how the company will reap the rewards.

For example, workers could highlight the possibility for increased productivity or fewer sick days.

Resources and tools are available to help employees construct their business cases, such as the Workplace Gender Equality Agency’s page on legal requirements in Australia and evidence for a business case.

What the law says

Anyone can ask for flexible working arrangements; your boss might say no, but it’s worth a shot. At a national level, in Australia where this study was conducted, employers cannot unreasonably refuse flexible working arrangements for people in certain circumstances, including those who have worked for the same employer for more than 12 months and who are:

pregnant
a person with disability
have various caring responsibilities
55 or older
experiencing family and domestic violence
providing care for someone who is experiencing family and domestic violence.

Employers are legally required to respond to such flexible work requests in writing within 21 days, and make their approval decisions based on “reasonable business grounds”.

Room to make things fairer

Together, our findings show that flexible work is still not doled out fairly. Because these negotiations often occur on a one-on-one basis, they are highly susceptible to individual bias, favouritism, and assumptions about who deserves to work flexibly.

One factor outside an employee’s control is their manager’s attitude. Our research found managers who held positive views about flexible work were more likely to approve requests of any kind. Those with negative attitudes were more likely to say no, regardless of how the request was framed.

Ultimately, success depends on how the request is framed, how much flexibility is asked for, and who is making the decision.

Melissa Wheeler has engaged in paid and pro-bono consulting and research relating to issues of applied ethics and gender equality (including Our Watch, Queen Victoria Women’s Centre, VicHealth). She has previously worked for research centres that receive funding from several partner organisations in the private and public sector, including from the Victorian government. She holds a Board of Directors role with the Frankston Social Enterprise and Innovation Hub.

Anne Bardoel, Asanka Gunasekara, and Lindsie Arthur do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

As Trump’s threats over Greenland escalate, will Europe use its ‘trade bazooka’?

2026-01-21T04:26:19Z

The renewed campaign by United States President Donald Trump to acquire Greenland has escalated, with tariff threats against European allies. Asked on Tuesday how far he is willing to go to “acquire” Greenland, Trump replied: “You’ll find out”.

This is the latest episode in a long-running effort under Trump 2.0 to remake the international order with major geopolitical implications:

the potential rupture of NATO
further pressure on transatlantic trade
a shock to stock and bond markets.

There is a chance of both escalation and de-escalation when Trump holds meetings this week on Greenland with European leaders at the World Economic Forum in Davos, Switzerland.

US–Greenland relations and the ownership question

Trump first floated the idea of acquiring Greenland during his first presidency, which at the time was dismissed as “absurd” and a diplomatic curiosity.

Greenland, while part of the Danish realm, is a self-governing territory with its own parliament and a right to self-determination under international law. Under a 1951 agreement, the US already has extensive rights to install and operate military bases in Greenland.
Trump’s arguments around Greenland have shifted from access to resources to defence arguments.

Trump has now explicitly linked the acquisition of Greenland to trade sanctions against eight – ostensibly allied – European countries unless they cooperate in facilitating a deal. He is using trade as a weapon.

Tariffs as foreign policy coercion

Trump announced tariffs of 10% on imports from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland beginning February 1, rising to 25% by June 1, until the “Complete and Total purchase of Greenland” has been achieved.

These tariffs are in addition to the so-called Liberation Day tariffs announced in April 2025. The legality of these tariffs under US law is currently under scrutiny by the US Supreme Court. The outcome is important: if Trump loses, he would not be able to impose tariffs over Greenland without Congressional involvement.

This is not regular trade policy. Tariffs are traditionally imposed as remedies against trade measures by other governments. Here, they are being used outside any international legal constraints as leverage to extract unrelated territorial concessions from allies. While national security exceptions exist, its use against close allies – and in pursuit of territorial objectives – pushes that exception well beyond its limits.

What is the EU’s trade ‘bazooka’?

European leaders are forced to choose between multiple unattractive options. They strongly rejected this latest round of US coercion, emphasising Greenland’s sovereignty and self-determination.

French President Emmanuel Macron, speaking in Davos, said the “endless accumulation of new tariffs […] are fundamentally unacceptable, even more so when they are used as leverage against territorial sovereignty”.

“We do prefer respect to bullies. And we do prefer rule of law to brutality,” Macron said. German Chancellor Friedrich Merz was more conciliatory.

European leaders warned of a “dangerous downward spiral” in transatlantic ties and possible retaliatory measures. Such counter tariffs had already been drafted up in response to Trump’s 2025 tariff threats, up to a value of €93 billion (A$162 billion).

While such tit-for-tat trade measures are already concerning, the EU has another measure at its disposal: its Anti-Coercion Instrument or ACI, sometimes referred to as its “trade bazooka”. This was initially designed to deter economic coercion by China.

Macron has raised the spectre of using the Anti-Coercion Instrument against the US. This would allow the EU to select from a range of measures, including:

the imposition of tariffs on US goods
restrictions on imports and exports of good and services such as banking or insurance
investment screening, such as preventing US investors from buying companies in the defence or energy sectors
restrictions on intellectual property rights, which would put pressure on US tech giants.

The decision over whether to impose such measures has to be taken by EU member governments in the Council of the European Union.

In addition to the time it takes to reach such a decision (officials indicated it could take up to six months), it would also test the ability of EU leaders to resist opposition from within. Hungary’s Victor Orban, a close Trump ally, could try to play the role of spoiler. Although even for him, Trump’s power play over Greenland may be a step too far into unknown waters.

In financial markets, Europeans are also large holders of US government bonds. One Danish pension fund on Tuesday announced plans to sell off its holdings of US Treasuries worth US$100 million (A$148 million). Any broader sell-downs could put pressure on the US bond market.

For the time being, European leaders appear to want to keep the EU trade bazooka dry, indicating a path of de-escalation bordering on appeasement rather than outright confrontation despite Trump’s tactics.

If the EU retaliates, it is likely Trump will respond in kind, possibly resulting in a ratcheting up of trade measures on both sides of the Atlantic. This would have devastating consequences for consumers and exporters alike.

NATO’s greatest test

Trump’s antagonism is not just an odd foreign policy episode, but a test of the strength and depth of the NATO alliance, international legal norms, and trade governance.

The outcome of this conflict – which is entirely of Trump’s making – will signal whether the post-Cold War order can withstand transactional geopolitics cloaked as national security.

Trump has had multiple off-ramps, none of which he appears to be willing to take. His actions will determine whether the US can retain its status as a reliable superpower or will be seen as a pariah in international relations.

Markus Wagner receives funding from the Australian Department of Defence as principal investigator for the Weaponised Trade project.

A stronger focus on prevention could help governments rein in health care and social spending

2026-01-20T19:17:50Z

Deb Cohn-Orbach/UCG/Universal Images Group via Getty Images

At the start of the new year, many of us will commit to joining a gym, eating healthier or cutting back on drinking and smoking. We do this knowing that investing in our health today will pay off into to the future – that prevention is better (and cheaper) than the cure.

It’s advice the Productivity Commission thinks federal and state governments should also follow to improve Australia’s finances and productivity.

Late last year, my co-authors and I gave the federal government the final report of our inquiry on delivering quality care more efficiently.

We found preventative investments could save taxpayers billions of dollars in health and social care costs. But to achieve these gains, the way we think about investing in prevention needs to change.

Investing in early intervention

Australia’s spending on health and social care is growing as a share of the economy and now makes up five of the top seven fiscal pressures facing the federal budget. The care sector is also absorbing more of our workforce – close to one-third of new jobs since the pandemic have been in the care sector.

In many respects this reflects changing preferences. As the nation has become wealthier, we care more about our health and wellbeing. But making the most of this spending is one of Australia’s key productivity challenges.

That means investing early to save costs later. Take for example the SunSmart skin cancer awareness campaign, which is estimated to have prevented more than 43,000 skin cancers from 1988 to 2010.

Investments like this save lives and money. We estimate that an investment of A$1.5 billion across all prevention programs over five years could be expected to save governments $2.7 billion over ten years. Factoring in the broader health, social and economic benefits, the total benefits would be about $5.4 billion.

Other countries are ahead of the game: Canada, the UK and Finland spend over twice as much of their health budgets on prevention as Australia.

Australia’s own health prevention strategy recommends that we increase spending on prevention from 2% to 5% of the health budget.

The big picture

Prevention goes beyond just health care. Investments in youth justice, out of home care and homelessness improve outcomes in a range of other areas, improving Australians’ quality of life and governments’ bottom lines.

For example, when people experiencing homelessness get stable housing, they tend to end up in hospital less often, make fewer trips to the emergency department, and in some cases, even avoid incarceration. It’s also easier to look for and hold down a job when you have a stable place to call home.

Such investments can also address systemic inequities in both access and quality of care.

One early childhood education program in outer Melbourne led to improved IQ and language development among socially disadvantaged Australian children, with participants reaching the same level of development as their peers within three years.

Evaluations of similar initiatives in the United States suggest that benefits can persist well into adulthood and even intergenerationally, through improved lifetime education attainment, employment and health, and reduced criminal behaviour.

A whole of government approach

Unfortunately, the way our government is structured can work against these investments. While it’s often one agency or level of government that needs to put up the money for these investments, they only enjoy part of the benefit.

The way governments think about and invest in prevention and early intervention needs to change. The Productivity Commission’s proposed solution is for a National Prevention and Early Intervention Framework to support strategic investments in programs that improve outcomes and reduce demand for future services.

The framework’s consistent approach to assessing interventions would bring all levels of government to the table, so that worthwhile investments no longer fall between the cracks.

It offers a practical way to put into operation the government’s Measuring What Matters framework. By directing funding towards outcomes and tracking progress against them, it would give federal and state governments confidence that they are investing in effective programs.

Like a person struggling with a new year’s resolution, policymakers often find it hard to delay gratification.

But given health and social care spending is only set to grow further, we need to start thinking long term to ensure we can afford to give future generations the standard of care we enjoy today. With a greater focus on prevention and early intervention, we can better care for future generations and put our care sector on a more sustainable path.

Angela Jackson is the Social Policy Commissioner at the Productivity Commission, as well as the chair of the Women in Economics Network. She has previously served on the board of Melbourne Health, which operates Royal Melbourne Hospital.

To sustain prosperity as its population shrinks, China will have to invest big at home

2026-01-20T05:30:22Z

China’s economy met the government’s official growth target in 2025, with official figures showing real gross domestic product (GDP) expanded by 5%.

Exports played an outsized role in delivering this headline growth. Despite a simmering trade war with the United States, China finished up the year with a record-breaking trade surplus of US$1.2 trillion as it lifted exports to new markets in the rest of the world.

Yet behind these headline figures, China’s economy continues to face some stubborn headwinds. Consumer spending remains subdued. Exports – while strong – face mounting global uncertainty. And government expenditure is constrained by public sector debt pressures.

Adding to this, China’s population continued to shrink for the fourth straight year in 2025 as the birth rate reached a record low, reinforcing concerns an ageing population will hold back the economy in coming years.

A shrinking population isn’t necessarily incompatible with rising living standards. What matters is whether productivity growth can compensate for a smaller workforce.

For China, that means domestic investment, rather than consumption or expansionary government spending, is likely to be the key mechanism for sustaining growth.

Problems at home

Recent data suggest China’s weak household consumption is not merely a temporary, post-pandemic phenomenon but instead reflects deeper structural factors.

While China’s GDP growth reached its annual target in 2025, retail sales grew by only 0.9% year-on-year in December, the slowest pace since late 2022.

This highlights the fragility of consumer demand, despite policy measures aimed at supporting spending.

Although the services sector continues to expand and accounts for more than half of GDP, household consumption as a share of the economy remains low by international standards.

High savings rates, lingering uncertainty linked to the property downturn, and concerns about job and income security continue to weigh on spending decisions.

This is consistent with long-running trends identified in academic research. Policies to stimulate consumption can boost spending in the short term, but they have not fundamentally altered households’ preferences to save rather than spend.

Strong exports

Manufacturing output remained resilient, and net exports contributed significantly to overall expansion. This helped offset weak domestic demand.

China’s exports to the US did fall in 2025. But a shift to new markets in Southeast Asia, South America, Europe and Africa more than offset this decline.

However, China’s reliance on net exports as a source of growth is vulnerable. While exports contributed unusually heavily to growth in 2025, this pattern may be difficult to repeat amid protectionist pressures and potential tariff escalations.

Constraints on government spending

In theory, government spending could step in to stabilise demand. Right now, that’s difficult in practice.

Local governments face high debt burdens, falling revenues from land sales and rising pressures related to social programs and maintaining infrastructure.

This limits their capacity for large-scale government spending without making financial risks worse.

Despite this, China continues to generate very high national savings. In 2024, China’s national savings reached 43.4% of GDP. Meanwhile, consumption as a share of GDP – the reverse side of the savings rate – remained around 20 percentage points below the global average.

Turning savings into investment

If a country’s savings are not absorbed domestically through productive investment, they end up fuelling a current account surplus. This can expose an economy to tensions with trading partners.

In 2025, investment in fixed assets (long-term investments such as buildings and equipment) fell 3.8%, with property investment plunging by about 17%.

This signals both the scale of the investment decline in the real estate sector and the need to pivot investment toward higher-returning sectors, such as manufacturing, services and technology.

In the long run, channelling China’s high national savings into efficient domestic investment could have greater impact than government stimulus measures. That’s as long as capital is allocated to productive firms and sectors rather than bridges to nowhere.

A shrinking population

China’s shrinking population adds a further important dimension to this challenge. Population contraction is not necessarily incompatible with rising living standards.

But it creates a need to boost productivity, through technological progress, innovation and upskilling the labour force.

Official statistics already show technology-intensive services and high-value manufacturing segments are expanding faster than the rest of the economy.

China’s 2025 growth outcome masks a set of enduring structural realities. Consumer spending is likely to remain subdued, exports face increasing global uncertainty, and fiscal policy is constrained by debt burdens.

The key policy challenge, therefore, is not to reverse demographic trends at any cost. It is to accelerate the transition toward a more productive, capital- and knowledge-intensive growth model.

Yixiao Zhou does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Research reveals a surprising line of defence against cyber attacks: accountants

2026-01-19T17:14:52Z

Egor Komarov/Unsplash

When Optus, Medibank and non-bank lender Latitude Financial were hit by separate cyber attacks in the past few years, millions of Australians felt the fallout: stolen personal data, disrupted services and weeks of uncertainty. Each breach raised the same uncomfortable question: how can this keep happening?

Australians are often told cybercrime is unavoidable. Companies store vast amounts of data. Systems are complex. Attackers are sophisticated. Breaches feel like a matter of “when”, not “if”.

As a result, responses tend to focus on technology: firewalls, encryption, software updates and staff training. These are all important. But cyber risk is not just a technical problem. It is also a governance problem.

Our research suggests a quieter line of defence against attacks is already embedded inside many companies, albeit one many people rarely think about: auditors – a specialised type of financial accountant.

We found auditors who have previously worked with a company that suffered a cyber breach become far more vigilant across all their other clients. That experience changes how closely they question systems, controls and risk – even at companies that have never been hacked.

Asking the tough questions

Behind every system in a company sits a set of decisions: who is responsible, how risks are monitored, whether warnings are acted on and whether controls work in practice. This is where auditors come in.

Auditors are independent professionals who examine whether a company’s financial reporting systems and internal controls are working as they should. Internal controls are the checks and processes that help prevent errors, fraud or system failures.

Auditors do not write code or manage servers. But they ask hard questions about how systems are designed, who oversees them and whether management understands the risks.

As companies have become more digital, financial systems and IT systems have become deeply intertwined. A failure in one can quickly affect the other.

Company IT systems are increasingly a major focus for auditors. Fili Santillán/Unsplash

What we did and what we found

Our research examined more than 2,800 companies in the United States over a 16-year period. We tracked what happened after an auditor’s client suffered a cyber breach – and how that experience affected the auditor’s work with other clients.

The pattern was clear. Auditors who had dealt with a breached client became tougher elsewhere. We found they were 21% more likely to identify serious weaknesses in systems and controls at their other clients.

These were not random or defensive decisions. The weaknesses were often linked to technology oversight and access controls, areas closely tied to cyber risk.

Just as importantly, when these auditors issued a clean bill of health – meaning they did not identify major control problems – those companies were less likely to suffer a cyber breach later. Their clean assessments were more reliable.

A tougher mindset

We also interviewed auditors who had worked with breached clients. Their responses revealed a shift in mindset. One told us:

In the past, whatever came from the system, we said, “it’s OK, because it’s from the system”. Now we always ask: “is this really accurate?”

Others described spending more time testing controls, questioning management assumptions and involving IT specialists earlier. Living through a breach made risks tangible rather than abstract.

As one interviewee put it, breach experience becomes something that “can be brought across different clients”.

Lessons for Australia

Although our study uses US data, the implications are highly relevant to Australia.

Australia has experienced some of the world’s most high-profile cyber breaches in recent years. Cybercrime is one of the fastest-growing threats to Australian businesses.

Regulators are responding. The Australian Securities and Investments Commission has warned boards that cyber resilience is now a core governance responsibility. The Australian Prudential Regulation Authority requires financial institutions to demonstrate strong information security practices.

There is another local reason this matters. Australia’s largest listed companies are audited largely by global firms such as PwC, Deloitte, EY and KPMG. These firms share methodologies and lessons across borders.

That means insights from overseas breaches can influence audit practice in Australia before the next crisis hits.

Another dimension of cyber risk

Auditors are not cybersecurity experts, and responsibility still lies with company management and boards.

But auditors bring scepticism, independence and a system-wide perspective that many organisations lack internally. Their work often happens quietly, long before consumers feel the impact of a breach.

For investors, there is also a signal. Companies audited by breach-experienced auditors, especially when those auditors give a clean assessment, are statistically less likely to be hacked later. Audit quality is another dimension of cyber risk.

As cyber threats escalate, the auditing profession may be forced to evolve further. For Australian companies, that evolution could be timely. With public trust fragile and regulatory scrutiny increasing, learning from past breaches, even those overseas, may help prevent the next major data breach headline at home.

Charlene Chen does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

What makes people more likely to give to charity after a disaster: new research

2026-01-18T19:07:44Z

The scope and breadth of natural disasters facing Australia right now can feel overwhelming.

Victoria, still reeling from disastrous, widespread bushfires, faced a new threat last week as a “historic deluge” caused flash flooding in several coastal towns. Queenslanders, meanwhile, have been grappling with flooding from ex-Cyclone Koji.

Disasters like these don’t just only destroy homes and lives, they also leave lasting scars on individuals, communities, and the environment. Though local support efforts are vital, they aren’t always enough, and further help becomes essential.

To fill in these gaps, many charities launch campaigns to raise money and encourage action that helps others from people who are far-removed and unaffected. However, with so many causes competing for attention and global priorities constantly shifting, it’s harder than ever for these campaigns to break through the noise.

Our new research, published in the Journal of Public Policy and Marketing, wanted to understand something big: does distance really matter when it comes to helping others?

And if it does, how can charities use that knowledge to make their campaigns more effective – whether the cause is close to home or far away?

Different types of distance

To find out, we dug into 17 years of research, reviewing experimental studies on campaigns for causes that were “distant” in different ways.

Some were geographically distant – think helping people overseas versus those in your local community.

Others were socially distant – helping people who are nothing like you, compared to those you feel connected to. Think about supporting complete strangers versus people who share your background, interests or community.

And then some were “temporally distant”: causes focused on a distant time point in the future. Examples include climate change outcomes or long-term recovery, versus immediate support for fire and flood victims – such as those in Victoria and Queensland who still need help on the ground right now.

By looking at all these different forms, we started to see that distance isn’t just about kilometres – it’s a concept that shapes how people decide to help.

What we found was fascinating: different types of distance don’t all work the same way. Although people are likely to help when the cause is close to home, what matters even more is social proximity: how similar or connected we feel to people in need.

In other words, helping “people like me” often outweighs helping those nearby. This opens up a big opportunity for charities – if a cause is far away, making it feel socially closer could be the key to success.

Creating a sense of closeness

While we’re not the first to show the power of social identification in charitable decision making, we focused on studies that looked at real campaigns.

What we found is that social closeness can be created through relational ties or highlighting similarities between the donor and the person in need. This can include sharing the same name, age or even ethnicity.

When people notice these points of connection, it may make the cause feel more personal and, in turn, increases the likelihood of helping.

Matching the message

We believe there’s another layer to this story. The closer something feels, the easier it is to picture. When a cause is near in time, similar to us, or geographically close, we can imagine it more vividly. That sense of vividness matters because it shapes how people process and respond to campaigns.

Our review found some evidence that when a campaign fits the level of vividness the cause naturally evokes, it may help people engage more deeply. In other words, matching the message to the psychological “distance” of the cause could make the campaign more effective.

For causes that feel close, vivid and concrete elements, like focusing on individual victims and asking for direct donations, may align best.

For causes that feel distant, broader and less concrete approaches, such as collective stories and effort-based actions like advocacy or volunteering, could be more suitable.

Bridging the gap

In the face of bushfires and flooding in Victoria and Queensland, charities are facing a critical test: how to turn individual concern both at home and overseas into action that helps others.

The takeaway from our research is simple: closeness isn’t just about kilometres. It’s about connection. When a cause feels relatable, we are more likely to act. And when charities tell stories that bridge those gaps, generosity can flow, near or far.

After decades of decline, this is how unions can rebuild their role in Australian work

2026-01-15T23:14:09Z

As recently as the early 1990s, 40% of Australian workers were union members. While there was a slight increase in 2024 – the first in a decade – that membership is now at 13.1%.

This decline has been used to argue unions have become less important in Australians’ lives.

Although some unions have recently made headlines for the wrong reasons, including allegations of corruption, bullying and violence, others – such as the Transport Workers Union (TWU) – have scored surprisingly big wins.

This includes a A$90 million fine for Qantas’ illegal sacking of 1,800 workers, and a deal with Uber and DoorDash to improve food delivery workers’ pay and safety.

Our research examines what the TWU did over 30 years to reassert its legitimacy – and how its campaigns have impacted Australians’ lives.

New approaches amid falling membership

The story begins in the 1990s, when the shift to “enterprise bargaining” fragmented unions’ industrial strength.

Thousands of agreements struck at the enterprise level replaced a few industry-wide instruments. This spread union resources thin, making it difficult to achieve outcomes in workplaces with low membership.

In response, the TWU focused on large retailers, whose pricing decisions heavily influenced wage rates throughout their supply chains. This allowed the TWU to concentrate resources and regain influence.

At the same time, the TWU partnered with transport companies it had previously been at odds with. Their interests now aligned: large retailer’s price pressures squeezed transport companies’ revenue, wages, and undermined road safety.

Making a public safety case

The TWU “safe rates” campaign, which began in the 1990s and is ongoing, sought to show how many road accidents were caused by unrealistic delivery deadlines and retailers cutting costs.

Talking about how better conditions for transport workers would improve public safety shifted the debate from the workplace into the community.

To make this message stick, evidence was crucial. Government inquiries into interstate trucking and academic reports over the past two decades made it harder to dismiss the union’s claims.

This eventually resulted in the creation of the Road Safety Remuneration Tribunal in 2012, which – although abolished in 2016 – showed that the TWU had changed norms and assumptions about working conditions in road transport.

How a costly gamble paid off

Years of outsourcing at Qantas had eroded the TWU’s aviation membership. Attempts to adapt the successful road transport safety message had failed.

But the arrival of COVID-19 provided an unexpected opportunity.

The TWU’s concerns about aviation working conditions had not gained widespread attention until Qantas outsourced 1,800 jobs during the pandemic. The TWU took Qantas to court – costing the union millions in legal fees – alleging this was done illegally.

Last year, Qantas was ordered to pay $90 million for illegally outsourcing jobs – Australia’s biggest ever penalty for violations of industrial relations laws.

The court awarded $50 million of that total to the TWU. As Federal Court Justice Michael Lee said:

It will send a message to Qantas and other well-resourced employers that not only […] will they face potentially significant penalties for the breach of the act, but those penalties will be provided to trade unions to resource those unions in their role as enforcers of the act.

Emboldened, the TWU has called for the creation of a Safe and Secure Skies Commission, to improve standards at airports and airlines, including for workers and passengers.

Improving conditions for gig workers

The TWU initially struggled to establish a presence in the gig economy delivery sector.

But this began to change as more food delivery workers were injured or killed during the pandemic.

As home deliveries surged during and since the pandemic, Amazon’s reliance on independent contractors created challenges for other delivery companies, significantly undercutting their revenue.

Dubbed the “Amazon effect”, the TWU warned this business model threatened job quality and – eventually – the viability of the delivery industry.

This reasoning brought platform companies, traditional delivery operators, and policymakers to the negotiating table. In 2023 and 2024, the Closing the Loopholes reforms established minimum standards for workers classified as “employee-like” and for transport contractors more broadly.

Looking ahead

Last year, a TWU survey found many rideshare drivers wait hours for work, skip meals to save money, and drink less to minimise toilet breaks. More than half drove while fatigued, with some sleeping in their cars due to low wages.

In response, the TWU made an application with the Fair Work Commission to create a safety net for rideshare drivers. If successful, it would be a world-first.

While the TWU lost many members over the last 30 years, it is recovering slowly. Membership increased from 55,570 at the end of 2022 to 58,885 at the end of 2024.

Over time, it rebuilt its influence by forging alliances and creating broadly resonant messages to help shift both public expectations and the law.

The TWU’s long game offers an instructive path for other Australian unions: start where workers are feeling the sharpest impacts, craft a story that explains what needs to change, then build evidence and alliances to enact that change.

Martijn Boersma previously worked for Catalyst Australia, a trade union funded think tank (since amalgamated with The Australia Institute's Centre for Future Work) from 2012 to 2016. He was employed by the United Workers Union (then known as United Voice) in 2017. This research was done independently, without any external funding.

Emmanuel Josserand does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Do Woolworths shoppers want Google AI adding items to buy? We’ll soon find out

2026-01-15T18:42:18Z

Woolworths has announced a partnership with Google to incorporate agentic artificial intelligence into its “Olive” chatbot, starting in Australia later this year.

Until now, Olive has largely answered questions, resolved problems and directed shoppers to information.

Soon, Olive will be able to do more: planning meals, interpreting handwritten recipes, applying loyalty discounts and placing suggested items directly into a customer’s online shopping basket.

What the Olive chatbot can currently do – but big changes are on the way. Woolworths

Woolworths says Olive will not complete purchases automatically, and customers will still need to approve and pay for orders.

This distinction is important, but risks understating what’s actually changing. By the time a shopper reaches the checkout, many of the substantive decisions about what to buy may already have been shaped by the system.

From helper to decision maker

The most significant change for shoppers is how decisions will be made during the shopping process – and who makes them.

Google describes its new system as a “proactive digital concierge” that understands customer intent, reasons through multi-step tasks, and executes actions.

Major United States retailers, including Walmart, Kroger and Lowe’s, are adopting the same technology. The move forms part of a broader strategy by Google to promote agent-based commerce across retail.

In practical terms, if Woolworths shoppers give their permission, the new Google Gemini version of Olive will increasingly assemble shopping baskets autonomously.

For example, a customer who uploads a photo of a handwritten recipe could receive a completed list of ingredients, reflecting product availability and discounts.

Alternatively, a customer who asks for a meal plan could receive a ready-made basket based on past preferences, current promotions and local stock levels.

This fundamentally changes the role of the shopper.

Instead of actively selecting products through browsing and comparison, shoppers will increasingly review and approve selections made for them. Decision-making shifts away from the individual towards the system.

This delegation may appear minor when considered in isolation. Over time, however, repeated delegation shapes habits, preferences and spending patterns. That is why this new change deserves careful scrutiny.

Nudging by design

Woolworths presents Olive’s expanded role as a practical convenience to save time and effort, while increasing personalisation. These claims are not incorrect, but they obscure an important point.

Agent-based shopping systems are designed to nudge behaviour in ways that differ markedly from traditional advertising.

When Olive highlights discounted products or promotional offers for a shopper, it doesn’t rely on neutral criteria. Instead, its priorities reflect pricing strategies, promotional priorities and commercial relationships – not an objective assessment of the consumer’s interests.

Once such judgements are embedded within an AI system that guides shopping decisions, nudging becomes part of the structure of choice, rather than a visible layer placed on top of it.

This is a particularly powerful form of influence. Traditional advertising is recognisable. Shoppers know when they are being persuaded and can discount or ignore it.

Algorithmic nudging, by contrast, operates upstream. It shapes which options are surfaced, combined, or omitted before the shopper encounters them. Over time, this influence becomes routine and difficult to detect.

Agent-based shopping also means AI does the browsing, comparing prices and weighing alternatives for us. Shoppers are increasingly presented with curated outcomes that invite acceptance, rather than deliberation.

As fewer options are made visible and fewer trade-offs are explicitly presented, convenience begins to replace informed choice.

For these reasons, it would be wrong to treat agent-led shopping as value neutral. Systems designed to increase loyalty and revenue should not automatically be assumed to act in the best interests of consumers, even when they deliver genuine convenience.

Unresolved data privacy questions

Data privacy is an even greater concern.

Grocery shopping reveals far more than brand preference. Meal planning can disclose health conditions, dietary restrictions, cultural practices, religious observance, family composition and financial pressures. When an AI system manages these tasks, domestic life becomes legible to the platform that supports it.

Google has stated customer data used in its system is not used to train models and that strict safety standards apply.

These assurances are important, but they do not resolve all concerns. It’s not yet clear how long household data is retained, how it’s aggregated, or how insights from such data are used elsewhere.

Consent offers limited protection in this context. It is typically granted once, while profiling and optimisation continue over time. Even without direct data sharing, inferences drawn from household behaviour can shape system performance and design.

These privacy risks do not depend on misuse or data breaches. They arise from the growing intimacy of data used to shape behaviour, rather than merely record it.

Convenience shouldn’t end the conversation

For many households, Olive’s expanded capabilities will save time, reduce friction and improve the shopping experience.

But when AI moves from assistance to action, it reshapes how choices are made and how much agency people give up.

This shift should prompt a broader discussion about where convenience ends and consumer autonomy begins. When AI systems start making everyday decisions, we must ask whether consumers retain meaningful control over their choices.

Transparency about how recommendations are generated, limits on commercial incentives shaping agent behaviour, and boundaries on household data use should be treated as baseline expectations, not optional safeguards.

Without such scrutiny, agent-led shopping risks quietly reconfiguring consumer behaviour in ways that are difficult to detect – and even harder to reverse.

Uri Gal does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Australia is betting on a new ‘strategic reserve’ to loosen China’s grip on critical minerals

2026-01-15T01:48:30Z

MirageC/Getty

The federal government has unveiled new details of its plan to create a A$1.2 billion critical mineral reserve.

Three minerals will initially be the focus: antimony, gallium and rare earths (a group of 17 different elements).

The details came as Treasurer Jim Chalmers travelled to Washington this week to promote the new reserve to key allies. At a meeting with finance ministers from the “G7 plus” group of countries, hosted by US Treasury Secretary Scott Bessent, Chalmers said the move was:

all about helping us and our partners shore up access to critical minerals during periods of market disruption.

The announcement puts meat on the bones of an idea first outlined by Labor in the lead-up to the last federal election.

Australia has untapped reserves of all three minerals in question. However, China currently dominates their processing. It accounts for 48% of global antimony production, 98% of gallium and 69% of rare earths.

So, why have these particular minerals been deemed so internationally important? And can Australia, as the government hopes, successfully establish itself as its allies’ “most reliable” critical minerals partner?

What are critical minerals?

Critical minerals are metals and minerals we rely upon for modern technologies that currently have no real alternative.

They’re essential for a range of applications, including:

solar and wind power
lithium-ion batteries
defence technologies (such as radar, fighter jets, submarines, and unmanned aerial vehicles)
communications
computing
medicine
other high-tech industries.

Many of the minerals Australia has in abundance still have a high supply risk, because we depend on importing the finished product.

For example, Australia exports most of its critical minerals to China for processing before they are on-sold to become parts of goods such as solar panels.

Critical mineral markets are also vulnerable to supply disruptions, such as global pandemics or trade disputes.

Why choose these three?

All three of the minerals nominated for Australia’s strategic reserve can be used to produce “dual-use” technologies for both civilian and military purposes.

Antimony can be used in flame retardants, lead-acid batteries, night vision goggles and ammunition. Gallium has applications in integrated circuits, optical devices, semiconductors, radar systems and solar panels.

And rare earths are needed for permanent magnets (used in fighter jets), metal alloys, medical imaging and lasers.

How it will work

With the strategic reserve, Australia will use its export finance credit agency to enable buyers to make “offtake agreements”. This is where buyers – which in this case will include the government itself – agree to buy the minerals as security, in some cases before the mining has begun. Buyers can then sell the minerals to Australia’s international allies and partners.

Currently, the West is not as competitive in establishing off-take agreements for critical minerals.

Chinese investors are more willing to provide equity and long term off-take agreements early in mining projects. China also has cost and technical knowledge advantages over Western companies.

Pitching to the G7

Australia’s decision to announce details of the reserve before this week’s G7 plus meeting was no accident. The G7 comprises the United States, Britain, Canada, France, Germany, Italy and Japan.

Ministers from India, Mexico and South Korea were also invited.

Short for “Group of Seven”, the G7 began as an informal meeting of the world’s largest economies (though all except the US have been overtaken by China). It has enabled financial decisions to be made quickly, without being hampered by a formal agreement or treaty.

Australia is not part of the G7, but often aligns on positions taken by the group.

Critical minerals mining and processing requires significant investment from both public and private sources using a range of financial tools, including export credits and development finance. Export credits, often provided by national agencies, include providing credit, loans, or guarantees to aid companies selling goods overseas.

That’s important, because entering these markets is risky. For example, lithium mining in Australia boomed as a result of the high demand for elective vehicles (EVs) using lithium-ion batteries. But the market went bust when EV sales slowed, leading some mines to stop or scale back production.

Countering China’s dominance won’t be easy

With the announcement, Australia has signalled it’s willing to intervene in critical mineral markets to further the needs of its allies and like-minded states.

Perhaps above all, Australia is seeking to reassure the US it’s a reliable partner for providing critical minerals. The US is urgently seeking critical minerals, even threatening to acquire Greenland for its minerals and strategic position in the Arctic circle.

Australia’s strategic reserve is what might be called a “geoeconomic” decision. This is where economic decisions are made based on accessing resources that benefit Australia and its partners and diversifying away from being dependent on China.

Many members of the G7 are part of the Minerals Security Partnership, which aims to secure a sustainable supply chain of critical minerals from diverse sources by working with industry and other governments.

It also contributes to the five-point plan agreed upon by the G7 in 2023 for critical minerals security.

The new strategic reserve may provide the West with greater access to minerals. But China still dominates the processing of many of them with advanced knowledge, skills and technology.

Susan M Park receives funding from the Australian Research Council.