The 5 stupidest arguments against a gas price cap

Adam: [00:00:25] Hello and welcome to Comedian versus Economist. We demystify the world of money and help you get a handle on the bigger picture. My name's Adam and we're joined, as always, by my little older brother and real life economist, Thomas. Hi, Thomas. 

Thomas: [00:00:39] Good. Adam, how are you going? 

Adam: [00:00:40] Doing pretty good, thank you. Don't forget, if you're still looking for a present for Christmas for somebody, the Equity Mates get started investing in books available online at BookTopia and all good bookshops. Thomas Before we get into the show today, there's a couple of listener emails that came through that I love because they're a little quirky. Richard, send us an email cve@equitymates.com. He says Scott Phillips and Andrew Page from The Motley Fool podcast have been referred to as the ruined H.J. in of Investing. So I was thinking about names for yourselves, and I came up with the Bert and Ernie of Macroeconomics. So thoughts on Bert and Ernie? That is good. Okay. The question is, which is who I am. I, Bert, I don't know which ones Ernie was the cool guy. That's obvious. 

Thomas: [00:01:31] Ernie was the cool one. That's true. But he was the one always getting into trouble and annoying. But a lot so I think that actually yeah. It does line up. 

Adam: [00:01:41] I would have also accepted Statler and Waldorf from the Balcony. But I'm not. Sure we are quite that vintage yet. 

Thomas: [00:01:48] It is rubbish. 

Adam: [00:01:52] That's my goal. When I'm older. That's it. That's the vibe I'm going to be going for. Is this Earl Waldo of the Muppets? Gus sent us an email to cve@equitymates.com. They said, how come the non economist one sounds slightly kiwi? Is it some kind of Adelaide thing? I'm not sure what to be most offended about by this question. Because. I'm not a Kiwi four, is that not? There's nothing wrong with that. Love, love. Our dear friends across the ditch. But he referred to me not once but twice as a non economist. The podcast is literally called Comedian Versus Economist. And He couldn't bring himself to go to Ukraine. So thanks Gus, for stating it. 

Thomas: [00:02:42] We'll rebrand in the. New Year as Economist versus the non-economist. 

Adam: [00:02:51] I don't know why I sound like a Kiwi. I'm sorry if that's coming through here. Maybe I don't. Adelaide obviously we were free settled. So obviously much a higher class than the rest of Australia. Maybe when you grew up in Darwin, Adelaide changed him. South Australian born baby. All right. Massive show coming up Thomas. Let's get into it. If the cap fits, wear it. Unless it's a gas price cap, then I'm not sure what to do with it. We'll find out about the NACC. The National Anti-Corruption Commission bill got up this week. Find out what that means for your protection. Money, payments. Who do you have to pay now? Fake meat is on the nose despite having a significantly longer shelf life than regular meat. We'll take a look at what's happening there. But first, Thomas, inflation data was out last week. Two questions. One, how was the inflation data party and to what do we learn? 

Thomas: [00:03:51] You know, it was good. It was good news, actually. Yeah, we got it. Yeah. Good Goodbody. Yeah, yeah. We're done by ten. It was good too. See that we got. The monthly CPI. So we're still learning. This is new for the ABS. We normally used to get CPI quarterly and we're one of the last nations in the world to go monthly, given it's one of the most important data sets out there and it's all digital. It was hard to know what was holding that up. But. 

Adam: [00:04:19] I don't know if you peek behind the curtain at some of these. Big institutions. There's a lot of legacy tech going on there. It would have been yes, it would have been some Java version from 2003. That was. Preventing the upgrade to monthly inflation data. 

Thomas: [00:04:36] And that, to be fair, the ABS has had a lot of funding cuts recently added quite a bit through the Morrison Government. So now shout out to all our friends at ABS doing great work. Yeah, we've got monthly CPI for October that showed see headline CPI at 6.9%. That was compared to 7.4% that was expected. So that was significantly softer than expected. Yeah. Trymaine also which is, you know, a key measure that was 5.3% versus 5.7% expected. So also coming off quite a bit. All right. And food was the big driver. So food prices are now down 50% on where they were a year ago, that deflation in food prices is driving this inflation. And the headline numbers. 

Adam: [00:05:19] Is this a bit like the housing crash that we're in now, like warehousing went up 30%. And now it's like, oh, it's going down 15%. Like, is the food story the same thing where food just went gangbusters and now it's coming back off of it, but it's still kind of back. Is it back on trend? Is that the right terminology? 

Thomas: [00:05:37] Yeah, yeah. I have zero information about that. I don't really know. But it doesn't really matter because when we're talking about inflation, we only care about the growth rate. So when the RBA is looking at the prices, you know, they've got a mandate for stable prices. They don't care about the levels, they only care about the growth rate since the growth rates that really throw things around because that's what interest rates and everything kill. So yeah, it could still be at a high level, but if it's slowing down or deflating, then good news as far as the headline numbers are concerned. 

Adam: [00:06:10] Is inflation then peaking? We hit the top. We've reached the summit. 

Thomas: [00:06:15] It's certainly starting to look that way. And if you look at the interesting thing is that all of the supply chain bottlenecks that were driving inflation over the past couple of years, seem to have largely moved through the system. So Goldman Sachs has a bottleneck index. 

Adam: [00:06:31] Really? 

Thomas: [00:06:31] Yeah. 

Adam: [00:06:32] And is this a new thing? This is part of the upgrade. 

Thomas: [00:06:37] I've only seen charts going back to February 2020, so in time, it might be a new thing. I mean, no, no, it wasn't an issue. Bottlenecks wasn't a concept until COVID hit. You know, no one was really no one was talking about it until then. So. So they've somehow constructed an index. I don't know what's under the hood of that, but the index was around two. I don't know what these numbers mean, but. Focus, focus on relativity. 

Adam: [00:07:05] If we keep going that way again, we're going to have to call it non economist versus non economists. 

Thomas: [00:07:12] It was At two in February 2020. It reached a peak of ten at the start of this year. That was the worst that got. And it's now down to 3.7. So it's come off significantly over the past ten months. 

Adam: [00:07:25] Three months, 3.7 bananas. We don't know what this is. Is ten bad? 

Thomas: [00:07:32] Well, it. Definitely is much bigger than. 3.7. If you know the relativities, the. Levels don't matter. 

Adam: [00:07:41] Well, yeah, but yeah, it was. 

Thomas: [00:07:43] It was two pre-COVID. It was two. Right. It got up to ten. 

Adam: [00:07:47] It didn't exist, much less. I just made up the index, you know. 

Thomas: [00:07:51] But yeah, yeah. But there's some kind of measure. Like an. Audit. It is true, but you're seeing this in all the things. So container shipping rates, the cost of sending a container from China to America, was at $18,500 on September 21. That's now down to 2500. So that's August. Yeah. I mean, that's a long way.

Adam: [00:08:13] It's more expensive. If you put things in the container, then it really starts to add up. 

Thomas: [00:08:17] I don't think it does. I think they don't waste you can't do it. But it's like. 

Adam: [00:08:25] Going by some yoga that you get where you have to. Like you can just fill up your thing. First they take it to the counter. Surely it costs more to send the full container than an empty one. 

Thomas: [00:08:34] I don't reckon I've only ever seen prices quoted. No, it's not per kilogram, it's just per container. That's the price. Right. 

Adam: [00:08:42] We had to get the reset. 

Thomas: [00:08:43] Reset. Get them onto it. You're busy. This week. 

Adam: [00:08:49] All right. 

Thomas: [00:08:50] So it's consistent. You mean, you're seeing this in the earnings calls, the number of earnings calls mentioning supply chain bottlenecks has come right off. Yeah. So it definitely, definitely does seem to suggest the supply chain bottlenecks are passing through. And then that's making sense of the inflation numbers which are softening. Okay. And you look through to 2023, the sort of the key risks for inflation remain with rent. So rental prices are going through the roof. They're still growing above 10%. And we haven't, you know, immigration starting to come back and we're not building any more houses. So that's going to put more pressure on the rental market. So we're going to keep seeing rental prices grow strongly. And then your energy energy's the other one in that story. And we've already locked in as your futures prices are locking in some big increases in energy. Right. But apart from those two, it's looking like we're kind of looking at a disinflationary environment into 2023, which I think means that the RBA is going to be looking at this. I mean, maybe we can, maybe we can chill out a bit. 

Adam: [00:09:44] He doesn't strike me as someone is firing on all cylinders, feel okay. He's like, he's not a he's not you know, some people are just highly strung. He's up. Yeah. He's just taking it easy already. So did you catch it? 

Thomas: [00:09:57] His apology at the News and Economics Committee? 

Adam: [00:10:01] Believe it or not. Now, I didn't tune into the economics Committee.

Thomas: [00:10:03] You missed that one. 

Adam: [00:10:04] Yeah. So a lot of things are at school, a concert. 

Thomas: [00:10:11] You got up at 5. A.m. to. Watch. Australian versus Argentina but couldn't couldn't be. Asked the head of Australia's most important economic institution. Now someone asked him if he was sorry. For misleading the Australian public on his no rate hikes until 2024. Call him. And he said I'm sorry if people listened to what we said. 

Adam: [00:10:34] Yes. The non-apology. 

Thomas: [00:10:36] No, I'm sorry. I'm sorry. If people listen to the words we said and assume they meant what we thought they meant. 

Adam: [00:10:42] You can't just assume that the head of the RBA knows what's happening with rates despite forecasting and saying look, rates are going to stay where they are till 2024. As soon as you hear that, you go, hang on. Well, what would he know? How would he know? Out of his hands? All right, Thomas, when it's over, a gas price cap. We've been talking about intervention in the gas market for a while. Are we finally going to see some action? What's happening? 

Thomas: [00:11:14] Yeah, it's. It's looking like we might. So when this podcast comes out on Wednesday, that's when the government is expected to meet and make an announcement around introducing a price cap on gas. You know, we've been talking about this for six or nine months, I think, not. Us in particular. Yeah, no. We talked about gas reservation yonks ago. 

Adam: [00:11:33] Oh, you did? Yeah. 

Thomas: [00:11:34] Yeah. All right. 

Adam: [00:11:38] It didn't consider yourself a party. To that conversation. Oh. Was here. Now, I'm sure our listeners out there have been taking much more notice. And I have. 

Thomas: [00:11:47] Yeah. Okay, good. It is a bit like talking to a brick wall sometimes, these conversations. So if you. As you might remember, gas prices are through the roof with the war in Ukraine that's feeding through into electricity prices. We're looking at potentially, you know, 20% this year, another 20% next year's electricity prices, 40% higher than what they were. That's hurting households. The other key thing to remember is this hurts most businesses since all businesses run on electricity. Pretty much. Yeah, it hurts everyone in the economy. But Australia produces a crap ton of gas and coal. But we export it all and then end up paying, you know, global prices for our domestic coal and gas. And those prices are through the roof with the war in Ukraine. So it's sort of the situation people have been talking about, like this is a bit ridiculous. We have a natural advantage in gas and energy, but we're squandering that. So gas producers can make tons of money. Right. And they've been and they've been crushing it. Absolutely crushing it this time. And so the whole story is a bit ridiculous. You look at Western Australia. Western Australia has a domestic reservation for West Australian gas. They haven't got anywhere near the kind of inflation we've got. They're talking about electricity prices going up 2 to 3% next year. 

Adam: [00:13:11] Hang on, what's the relationship between gas and electricity? 

Thomas: [00:13:14] Gas makes electricity. 

Adam: [00:13:16] It's like coal. I forget coal, like coal fired power stations. But these gas to produce electricity as well. 

Thomas: [00:13:22] Yeah. Yeah. I think it's something like close two thirds of production and then gas is maybe 20% and then renewables is not a 1015 something. 

Adam: [00:13:31] I don't think I knew that. And I say that with not a lot of confidence, but I don't think I knew that gas was used to make electricity. 

Thomas: [00:13:38] Yeah, right. Right. And sort of like talk about it being the marginal price setter in the market. So because causes take so long to go on and off, I think it's against the sort of controls the margin. Hmm. Okay. Yeah. So Western Australia with the reservation, they're looking at electricity prices going at 2 to 3% next year. The rest of the nation is looking at 40%. Yeah, well, and then electricity prices, if we get that, that feeds through to inflation modelling. I've seen talks about it being adding 3 to 4%, four percentage points to inflation. So you're an inflation target of 2 to 3%, you're getting 3 to 4 out of it just out of electricity prices, which means that the RBA's got to keep rates higher for longer. 

Adam: [00:14:18] Even though the bottle shop index might come down. No, the final. Bottleneck index. So I'm dead on with those. My mind was. Elsewhere in the. 

Thomas: [00:14:37] Last break. We were talking about alcohol. 

Adam: [00:14:40] Let's just. Just do it online. Order a dance with some Christmas wine. So even though the bottleneck index might come down, we're still looking at inflation through gas prices.

Thomas: [00:14:56] Yeah, potentially. 

Adam: [00:14:58] So the RBA might keep rates hot. Yeah.

Thomas: [00:15:00] Yeah, yeah. So not not only will we be paying a lot for electricity, we'll also have higher rates because of it. Right. But we could avoid this whole situation by reserving some of the energy that we're exporting to the rest of the world for ourselves. And so the mechanism that there's different ways of that could be an export levy, price cap, domestic reservation, they all kind of do the same thing in an economic sense, a mechanism that. The Government seems to have landed on a price cap. Yep. And they're looking to bring that in today. The expectation is it's going to be around $12 a gigajoule, you know, so that's that's a cap. It is effective because the futures markets and current prices are higher than that, but it's still 400% higher than where it was before the war in Ukraine broke out. So, you know, gas producers should still be doing pretty well at those prices.

Adam: [00:15:51] And are they keen on it? I mean, are they? I mean, I was not keen on it because it's going to cut into their profits somewhat. But are they open to are they kind of being dragged kicking and screaming into this thing, or do they have a say even? 

Thomas: [00:16:03] They're going pretty hard. They're going pretty hard. And the context here is that in 2010, when the government tried to bring in a super profits tax, I am on the miners, they launched a massive campaign and it was one of the key factors in the downfall of the Gillard Government. Right. And so and that's sort of what a lot of analysts are saying, Labour's pretty scared to go hard against the miners because they got massacred last time with. 

Adam: [00:16:27] Democracy in action. Don't fight them because they'll flog you. 

Thomas: [00:16:34] Yeah. Yeah, right. Like a handful of companies. Like half a dozen at the most. So yeah, it's a pretty sad day for democracy, but that's where it's at. So they've been going hard the past week, lobbying against the price cap and telling anyone who listens that it would be a terrible idea. I've seen five particularly stupid arguments out of these miners about why it's a bad idea when we all go through them. 

Adam: [00:17:00] Sure give them to me. Can you name them as well? Just like can you can you at any chance you can order them from like the least controversial. The most controversial. 

Thomas: [00:17:09] How about a go from least to my stupid. 

Adam: [00:17:11] Yes. Excellent. 

Thomas: [00:17:11] Okay, so number one. Number one is that it would freeze investment. So Woodside's CEO Meg O'Neill was saying that it would withhold new gas investment. We'd struggle to see new investments be competitive with those sorts of price levels. I would also say that the Australian Government would suffer a black mark. It would make investing in Australia riskier than other jurisdictions. We have got confidence in the stability of the fiscal regime for the long haul. 

Adam: [00:17:36] She sounds certainly educated. Yes. Why is that a stupid idea? 

Thomas: [00:17:40] Well, because we're talking about a price cap of $12. Right. So what does that still a war time price? Before that, it was $4. Oh, okay. Right. So, you know, if you can't make it work at $12 when the war ends, which it inevitably will, one day, one way or another, if it doesn't stack up at $12, it doesn't stack up outside of the war time reality. Yeah. Okay. So, you know, you shouldn't be investing in a long term project like a gas field on the assumption that the war in Ukraine lasts forever. That's stupid. 

Adam: [00:18:16] Like, like buying doge at its peak. I assume it's going to stay there. And you know, you can.

Thomas: [00:18:25] Go and we'll say it wasn't and the idea was he's looked at the break-even costs in some of Woodside's projects and they're sort of between $3 and maybe $9 at the moment. So $12 is not restrictive. Okay. So it's just like whatever, like.

Adam: [00:18:41] All right, number two or.

Thomas: [00:18:42] Number two here. Okay. Firms are going to exit the market. Don't get me started. . Number two, firms are going to exit the market. Right? They're going to you know, you got to produce just leave the market. That doesn't make any sense. Mid-Ocean the big energy company owned by AIG, they just put in that monster bid for origin. Their CEO has already said they're perfectly comfortable with price caps or some kind of intervention happening in every market they're operating in right now. There's a battle over Warrego Energy, which is the small West Australian gas producer. So Kerry Stokes and Gina Rinehart are in a bidding war for that at the mine. Right. They want to buy the company. Hancock Prospecting, Gina's company put a bid in and the board said, yep, we should accept that recommendation to the shareholders, we should take that. Kerry Stokes came in, offered a higher bid. Hancock came back and offered a bid that was 22% higher than what they already had. Right. Everyone wants gas assets because they're just super profitable, even with the prospect of price caps coming in. 

Adam: [00:19:43] Because It's pretty like I guess there's an overarching theme here, which is you will find two years ago making money at, you know, $3, three or $4 dollars. Yeah. Like it's as big a big leap to go. Well, now what? I like this. I'm profitable at $12. I'm like, Yeah, yeah, tough to hold water. But yeah. 

Thomas: [00:20:03] It doesn't that doesn't hold any water. Yeah. I guess the number three is that it creates sovereign risk. So I don't know if you heard this term. Sovereign risk is the idea that you just can't trust the regulatory settings in a country and that makes it investable there. Just the industries comparing Australia to Argentina says we don't want to go down the road of Argentina again. Very. Stupid argument. I mean, one, we're sort of saying like, what is the sovereign risk here? Like, if we allow our electricity prices to soar out of control, we hollow out our entire economy because our manufacturers can't compete. You know, your cafe can't compete and becomes unprofitable. So you hollow out. You kill off the domestic economy. For what? To save six or seven producers their blood money, profits. Like instance, a dumb argument to make. Now, the other thing we are doing is sovereign risk like you look at who owns Santos like it's you know this an Australian company but like the biggest single shareholders. E and Energy which is a Chinese company. All right. And so you're sort of talking about like, so what we're trashing the Australian economy and hollowing it out just to support like Chinese companies, like really that's you know, it's hard to make a sort of a that's a good outcome from a sort of a strategic, strategic, geo strategic perspective. 

Adam: [00:21:21] Yeah, right. Okay. 

Thomas: [00:21:23] So dumb, dumb argument. But it gets worse. Good. Yeah. Number four, it hurts Aussie companies overseas. So Karen Karen Maley in the AFA ran this article and I've got to say I like the AFA. It's my guess, my go to point for financial news. But they have been useless on this Topic. Worse than useless. 

Adam: [00:21:43] Just in case. Anyone thought that you were flagging them with some sort of. Pilot endorsement. 

Thomas: [00:21:47] It's really disappointing because, you know, every other business in the economy is taking a hit to protect the super profits of the mining companies. The AFA representing the business community should be going into bat for the entire rest of the Australian economy, not for a handful of companies, which is what they've been doing. Yeah, right. It's. Yeah, it's really weak, right? Yeah. Okay. So anyway, Karen Maley, who is oh who is usually awesome, I'm a big fan of her, but I think she's been told to write this article. She's saying it hurts Aussie companies overseas. So if an affluent developed country like Australia thinks it's fine to respond to rising gas prices by changing the rules, then surely developing countries in Africa or Asia are justified in following suit changing conditions that apply to Australian mining countries operating in their country. So he's kind of saying like if we do something sensible with gas prices like other nations might do something sensible with gas prices. To. 

Adam: [00:22:44] Kind of get it. Like you can't just change the rules. Like if someone likes if I invest in, I don't know, a company, then you sort of do it with a certain understanding that conditions are going to stay the same or that the playing field is not going to change. Like I don't know. Yeah, I'm not saying I've got sympathy for the gas companies. 

Thomas: [00:23:01] None of these companies invested money on the belief that there would be a war in Ukraine that would see energy prices go up fivefold. None of them invested money in that. There's a windfall gain that they've got for having done nothing other than just be in the right place at the right time when there was a war where thousands of people are dying. Like, that's not an argument to keep having that money. And if it supports our national interests, are we really arguing that other countries in Africa and Asia shouldn't follow their own interests just to support Aussie companies? I'm not I'm not down with that argument at all. 

Adam: [00:23:34] Yeah, but again, as other countries, as long as we're not seen to be saying you can just change the rules whenever you want to support whatever agenda you're going for. I mean, in this case, you might say like the agenda is right. It's doing the right thing. But what about down the road when someone wants to change the rules again, but for more nefarious purposes, they're like, we're going to higher taxes or something. 

Thomas: [00:23:56] Yeah, but no, no, no. That argument is sort of like the full free market ideology that the government should never intervene in the markets every time. I know like I'm on lockdown with that because we're suffering the consequences of doing nothing for six, nine months alreadyYou know. 

Thomas: [00:24:15] Number five, we need the money to support consumers. So Queensland Premier Annastacia Palaszczuk said that she's opposing it, saying I'm making Queensland's position very clear, our energy assets are working well in Queensland and we will not jeopardise the returns that are going back to Queensland households. They've recently raised royalty payments. 

Adam: [00:24:36] Even I can say this one bit of a stupid way. 

Thomas: [00:24:40] Yeah. We're using the money too. Subsidise Queenslanders bills, which amounts to $575 per household over the last four years. So just a bit over $100 a year. 

Adam: [00:24:52] We're using. The money to subsidise the outrageously high household bills that people are having to pay because we've not put a price cap on gas we should. Yeah, that is, that's ridiculous. 

Thomas: [00:25:06] That is stupid isn't it. Yeah. And if I just reported it without, without qualifying as saying this is true.

Adam: [00:25:14] Mhm. Now we're looking after the people as these ridiculous prices drive inflation through the roof and they are gas prices are through the roof but we're going to give them a subsidy to help with the, with the price of gas but it's going to keep it that is in doing so is going to keep inflation really high, which means that cost of living is going to stay really high. 

Thomas: [00:25:33] And interest rates. 

Adam: [00:25:34] and Interest rates will stay really high.

Thomas: [00:25:35] Yeah, but here's 100 bucks. 

Adam: [00:25:36] You're welcome. Though I say we don't do anything for you. All right, why don't we pause here, grab a word from this week's sponsor and be back with more comedian versus economist right after this. Welcome back here on comedian versus economist. You can of course, send us an email cve@equitymates.com Or get us on Instagram and Facebook at CVE Podcast. And can I suggest doing so without delay if you're planning on it? So this week is our second to last episode for the year before we take a break over Christmas and do lots of family stuff. Final show next week. So if you have been thinking about sending an email or sending a message or you just want to share your Spotify rat stats for the year, we'd love to see those, see whether we made it into your top five podcast, for example, tag us like share whatever you need to do. We'd really appreciate it because we're just curious more than anything, but we really love the support. So yeah, if you've been thinking about it, get in touch. I'd love to hear from you. Thomas The National Anti-Corruption Commission got a bill up this week. What's going on there? 

Thomas: [00:26:44] Yeah, this has been a long time coming, but thankfully we got up. I mean, remember that the Morrison government campaigned on this in 2018 and promised to bring in a federal ICDC was what it was called, because the state bodies have their anti-corruption commission. Yes, I went back to New South Wales and then for the whole time Morrison was in government, it just didn't happen. Finally, we've got that up. Shout out to Dr. Helen Haines is the independent member for Indi. She's been doing awesome work on this for years now and really, really driving it along. So I think the great result is that this comes a lot to her. So well done. Her Yeah, but yeah, finally we've got a federal level anti-corruption commission which is yeah, great news is a good means good. Yeah. Oh, it's fantastic. Yeah. It means that, you know, we can't do corrupt stuff at the federal level anymore without there being some recourse to justice. 

Adam: [00:27:39] Um, you know, it sounds good. I mean, it sounds morally right. It sounds ridiculous. As someone who likes to pay cash for things, I just worry that this is a slippery slope of big brother overreach. Yeah. 

Thomas: [00:27:59] And we'll know the will. The federal in. An ICC is not coming for your builder. He's asking you to pay in cash. Don't have to worry Yeah. Brilliant. But now it's a good thing. It's a great thing and it's a great thing for a lot of reasons. It's a great thing from an economic perspective. Like the thing about capitalism is it does a lot of things well, but one of the key flaws that it has is that it concentrates wealth and power. It just has a natural tendency to do that, to create monopolies. And then with economic power comes political power. And left unchecked, that sort of what you end up with these sort of greater concentrations and growing inequality. And then with inequality, growing political inequality, which then erodes democracy, is sort of like the end result. So you really need civic institutions to sort of pull back against that natural tendency in capitalism. And that's what this is. So that's what this offers. And I think that that means that then the economy can work much better because once you know that when economic power becomes unbalanced, you get perverse economic outcomes. Consumers get a raw deal. Everyone gets a raw deal. You get investment in things that shouldn't get investment, infrastructure that shouldn't exist. 

Adam: [00:29:17] So is this is this like the you know, we heard of like the sports rorts and all the kind of misdirected public funds this is going to this is going to address all of that. 

Thomas: [00:29:28] Yeah. Yeah. Because up until now, we've had no mechanism other than Parliament itself to look into these and then it creates this thing, you know, like we recently had, you know, Morrison appointed himself to five industries secretly, which was a bit weird. So then we've got to look into that. And so that if Morrison had been re-elected, we wouldn't have happened. Like there would have been no enquiries in that. So then Labour launches the enquiry but then it just looks like political payback and so and that doesn't really build trust in the system. So you do need an independent body to sort of step back and so that people can trust it. And yet let's give our federal politicians some oversight and so we can trust what they're doing. 

Adam: [00:30:08] I think Scott Morrison's plan was that he was going to be the head of the National Anti-Corruption Commission, as is in his capacity of six Rome, that he was because he was put forward, I think. 

Thomas: [00:30:21] He named himself as all five commissioners. 

Adam: [00:30:27] He used his mother's maiden name, though, just to maintain independence from his other five roles for the government. It was going to be Scott Jones, head of the National Anti-Corruption Commission who has the role of scomo scott M. All right. Tom is finally on the show this week. Beyond meat is in trouble. Was fake meat just a fad after all. 

Thomas: [00:30:52] Yeah. So this I mean, this is one of the interesting stories of coverage. This is one of the market darlings. For a while, it sort of really took off. At some point it was worth $10 billion to $10 billion valuation.

Adam: [00:31:06] Yeah, well beyond me. I don't know if you remember. We might have talked about it on the show. I can't. I can't remember. But as we have already discovered, I'm not good at remembering this. But beyond the mark was that the chief operating officer was one of the ones who was in trouble. We got arrested after he bit the nose of somebody in a car park after a college football game. My. Whoa! He was one of four execs. I think that was laid off. I mean, obviously, the others, probably not for biting someone like him, are hardly a glowing endorsement for fake meat products. It just got a bit hangry. It's just like it's not. A not a good look for a CEO of a major cut of a $10 billion company. I think if we look back at the trajectory and the share market moment, that's probably about the peak. And they started dropping off after he attacked somebody else's face with his mouth, unless he was going like full Elon Musk kind of out there, visionary, you know, like pushing the boundaries of what's possible. We're not imagining beyond hamburgers. We should be like, what if we made human noses but out of fake meat? 

Adam: [00:32:22] I think people think this is the kind of these are the these are the ideas where they go. I want everyone on my desk with an idea for something that could be made out of fake meat that's currently made out of actual meat. So is it just beyond meat then. Is that it. Yeah. 

Thomas: [00:32:38] Well, I don't know. I mean, I think that company probably did get a bit bubbly. So the share price is down 83% for this year. So sales are tanking as 20% of its workforce. Yeah, it's and I think, I think beyond meat as a thing it has sort of like it exploded everyone was super excited about it and now I think it's starting to be a little bit of pushback. I mean, oddly, I think it's become a bit of a political issue. Right. So people are talking about it being woke like the sort of redneck pro meat brigade. Complaining. 

Adam: [00:33:15] Oh, man, it always happens. It always happens. It happened with like gay marriage. People came out and they're like, we can't allow this. This is an outrage. It's like, you don't have to do it. You can just not get married to another man. If you're a man, you can keep your marriage between a man and a woman. We're just going to have these other people who get to do what they want, like because happening there in some restaurant in the United States where they were like people getting angry and leaving angry messages going, I'll never be coming back to this restaurant now that you're serving fake meat, like.

Thomas: [00:33:48] Work, work because no calling. I come here for white things, for work wages, but yes. So I like it. Yeah. Is copping a bit of pushback. But I think like veganism and vegetarianism is, this is a trend that is growing. McDonald's is testing the Beyond Meat Work Burger. They're calling it mcplant mcplant again. Well Burger King is going for the impossible whopper and impossible nuggets. 

Adam: [00:34:14] The impossible. That's a brand, isn't it? That's like another matter beyond meat alternatives. 

Thomas: [00:34:18] Oh, is it? 

Adam: [00:34:18] Yeah, I think so. So I think the Cracker Barrel in the States, they did impossible patties or something. 

Thomas: [00:34:25] Impossible sausage. Oh right. I just thought that was branding for fake meat. Not meat doesn't, doesn't sell well but I. 

Adam: [00:34:34] Also think I don't get it. I don't understand why they need to pretend that it's like, give it like it's beyond meat or impossible. Can't we just call it, like, plant food? I can't give you a garden. 

Thomas: [00:34:48] But it's just vegetables.

Adam: [00:34:50] Yeah, you're like, oh. That makes it sound like you're trying to hide something, you know, like giving it, like, an impossible burger. It's like, oh, is it. Is it, like, made out of meat or is it not? Or like, why don't you just sort of go, look, this is a plant based burger. 

Thomas: [00:35:05] It's like the dairy industry tried to sue soy to stop soy calling itself milk. 

Adam: [00:35:11] Right. 

Thomas: [00:35:12] Because it's not actually milk. Milk is defined by coming out of the others and something in soy is not really milk, so shouldn't be allowed to call itself milk. It was said they argued it was fake advertising. All right. But I think they lost that case in the end. 

Adam: [00:35:27] All right. So what's the outlook for the non meat industry like meat industry? 

Thomas: [00:35:32] Yeah, I think I'm going to see I think it's still finding its feet. I think you know the demands there. But we just have to find the form that people like. And that consumers are going to go for it. And so I think fake chicken seems to be picking up and doing well. Like chicken. Yeah. It's a bit of a move from fresh to frozen right as. Well said. Yes. Just finding the right form. 

Adam: [00:35:53] Yeah. Because you don't want to, I mean if you can fake me, you don't want a fresh fragment. You want to freeze it, keep it fresh, pluck flax straight from the soybean crop, and process it into something that looks like a hamburger snap person stuck in a deep freeze. Then that's how I like that's how I like my site. All right, why don't we leave it there? That does it for this week. Thank you so much for tuning in. Oh, yeah. As I say, it is our last episode next week. If you feel like sending us a message, we'd love to hear from you cve@equitymates.com Or via the website equitymates.com/cve. You'll find us on Instagram and Facebook at CVE Podcasts. Share is your Spotify wrapped posts if you like. We'd love to see those. Other than that. That's it for us. We will talk to you again next week. Bye for now.