The 6 biggest business stories of the year

Sascha: [00:00:03] From Equity Mates Media. This is The Dive. I'm your host, Sascha Kelly. We've had a huge since launching. At the end of April, we released 149 episodes, written a quarter of a million Words and Nights, Won Best Business Podcast at this year's Australian Podcast Awards and been downloaded hundreds of thousands of times by you. It's Wednesday, the 21st of December, and it's our last episode for 2022. And today I asked the team, What are the biggest business stories of the year? To start with, I'm welcoming Bryce Leske, co-founder and CEO of Equity Mates. Bryce, welcome. 

Bryce: [00:00:43] Hi, Sascha. Good to be back for the last episode of the year. 

Sascha: [00:00:46] All right. So what was your big story? 

Bryce: [00:00:49] Well, Sascha, we can't go past house prices. And I came in with a story on the dive at the start of the year that looked at some of the hottest property markets around the world and how they were starting to cool off. 

Audio Clip: [00:01:02] More signs. The red hot housing market is chilling. 

Bryce: [00:01:05] Now, this hasn't quite transpired in all markets around the world. We know that in some areas in the states, for example, house prices are up for the year. But let's just concentrate on the story here in Australia because Australians love property. We've seen over the last 12 months across Australia house prices are down 3.2%, which is the largest annual decline in national home values since September 2019. Now this story isn't applied to all major cities. We've seen some growth areas. Adelaide has shot the lights out. It's up 13% over the past 12 months. But Sydney and Melbourne, the two big property markets are both down. Melbourne down 7% and Sydney 11%. 

Sascha: [00:01:43] Wow, 11%. Well, maybe there's hope for me yet. Why the differentiation between states, though? Aren't interest rates the same everywhere or did I miss something?

Bryce: [00:01:52] No, Sascha. Interest rates work the same wherever you are in Australia. But the key difference with Adelaide is that it is dealing with a real supply shortage. The population growth is outstripping the growth in property supply. So that's why we're seeing an increase in prices here in Sydney and Melbourne. No doubt that the increase in interest rates from the RBA since the start of the year is starting to have an impact. 

Sascha: [00:02:15] It's going to continue as a story in 2023 too isn't it? 

Bryce: [00:02:18] That's right, because one of the key differences between the Australian property market and some others around the world is that we are very much dominated by variable mortgages, not fixed mortgages. And so what that actually means is for an American who borrows and fixes their mortgage at say 3%, that is what they pay for 30 years. Must be nice. But here in Australia, if it's variable and the RBA change the interest rates, then your mortgage changes accordingly. So the impact of this is that the RBA say that in 2023 about 25% of mortgages that are currently fixed will move to variable, meaning home borrowers are going to see an increase in their mortgage repayments. This is certainly a story for 2023. 

Sascha: [00:03:00] If you want to hear more about house prices, we've put that episode Bryce mentioned in the show notes. Thanks, Bryce, for joining me today. 

Bryce: [00:03:07] Thanks, Sascha, and Happy New Year. 

Sascha: [00:03:09] So from Bryce, I'm welcoming for the very first time a head of growth. Alf Eddy, what was your big story for the year? 

Alf: [00:03:16] All right, so the story this interests me is about the gig economy. So 2020, 2021, we saw these new apps popping up claiming they can get groceries to us in 10 to 15 minutes. Sounded a bit too good to be true. But then this year we're seeing all the headlines about the app shutting down send shut down in May this year, volley shut down last month. And then we just read about Deliveroo stopping their operations in Australia. So what's going on? Some are saying it's the macro environment. Inflation's back. Consumers are looking to go to the supermarket to look for a bargain instead of splurging on these delivery apps. Another argument is they were doomed from the start, you know, competing with Coles and Woollies with their key differentiator being the 10 to 15 minute delivery. It just wasn't sustainable. They were throwing heaps of cash at the problem trying to create growth, but they were doing for the start the unit economics were bad, the margins were bad, it just wasn't going to work. So it's quite a fascinating topic, probably something that most listeners can relate to having ordered through milk runs and delivery. Woollies actually launched their own Metro 60 app recently, which does the same thing. So a lot of competition in the area. Definitely a difficult market to be in when people are trying to spend less and capital isn't as free flowing to these start ups. So overall, a really fascinating story for me. We actually did two episodes on it on the Dive. What's the deal with the gig economy back in May and then just last month we did Will Food Delivery Services Ever Deliver Profits? Check them out. 

Sascha: [00:04:48] And of course, those links are in the show notes. Thank you so much, alf. Now, as someone who's no stranger to the dive, it's my colleague and regular dive co-host. It's Darcy Cordell Darcy, welcome to the Dive. 

Darcy: [00:05:01] High season final episode of the year. It's been a huge year. Let's finish it off.

Sascha: [00:05:05] Yeah. So what are you bringing today?

Darcy: [00:05:07] The biggest story of the year is Russia's invasion of Ukraine and the consequences that have been felt around the world. On the 24th of February, Putin sent Russian troops into Ukraine and immediately there was widespread condemnation and a flurry of sanctions imposed on Russia. You remember many of them. Germany halted approval of a second gas pipeline across the Baltic Sea. There were countless sanctions on oil imports. Russian airlines were banned in the EU. Access to swift international payments system was blocked and European investors were banned from trading Russian state bonds and many stocks. But along with that, countries also seised assets and banned travel from Russian oligarchs. Germany even, says Dilbar, the world's largest superyacht, owned by Russian billionaire and business tycoon Alisher Usmanov. If you want to listen to that full episode, just search. Why has Germany seised the world's largest superyacht? But in many ways, Sascha, the sanctions on Russia have caused the high inflation and global price volatility that we're experiencing today. Russia is the world's largest gas exporter. Ukraine and Russia were two of the largest grain exporters, and Russia was also one of the largest oil exporters. So they're massive players in global trade, and the war has sent energy prices skyrocketing and food prices through the roof. And these have been the two major factors in high inflation we're seeing around the world. So Russia's invasion brought on a lot of pain, mainly to the Ukrainian people, but the ripple effects were felt around the world. And while Russia remains in parts of Ukraine, that pain certainly isn't over yet. It's not the most positive story, Sascha, but one that needs to be told. In my mind, the biggest business story of the year, if not the biggest story overall. 

Sascha: [00:06:45] Thanks, Darcy. Have a great break. And thanks for being such a great colleague this year. 

Darcy: [00:06:49] Thanks, Sascha. 

Sascha: [00:06:50] We're going to take a quick break. I'm going to be back with three more of our top stories from 2022. More. Welcome back to the dive. In this final episode for the year, we are rounding out our big stories in the business world and the whole team is joining me to do a bit of a recap. So now in her dive debut, it's Em Croker, our head of Partnerships. Em, it's a pleasure to welcome you to the dive for the first time ever. 

Em: [00:07:25] Hi, Sascha. Great to be here. 

Sascha: [00:07:27] So what are you bringing to the table for this episode? 

Em: [00:07:31] So, Sascha, the biggest story of the year, it was impossible to miss in the news because it wasn't only in the news. It was affecting your hip pocket. It was inflation. Prices were up, interest rates were up and the stock markets were down. And in Australia, iceberg lettuce reached 12 AUD ahead, causing outrage.

Sascha: [00:07:51] How did inflation compared to previous decades? 

Em: [00:07:54] Inflation was hitting its highest level since the 1980s. Australia is predicted to reach 7.75% in the December quarter. The US is currently sitting at 7.1% inflation levels over the last 12 months and the UK is hitting a whopping 10.7% across the last 12 months. But all these numbers pale in comparison to Turkey, which reached 73% in July this year. 

Sascha: [00:08:19] Now you mentioned iceberg lettuce reaching ridiculous prices here in Australia. That wasn't the only part and symbol of inflation though, was it? 

Em: [00:08:29] That is true. There was a photo that caused outrage in L.A., in downtown L.A. with a gas station selling $8 a gallon for gas in the US. 

Sascha: [00:08:40] So previously we heard from Darcy talking about Ukraine. Was that the driver of these high prices?

Em: [00:08:46] There are two big stories that drove these prices. And yes, Russia invading Ukraine was one of them. As those markets are critical for global supply chains, for both oil and natural gas, but also as suppliers of the world's wheat and 75% of the world's sunflower seed oil. The other big reason was China's COPE zero policy. With Chinese cities shut down. We saw factories stop producing and backlogs at ports leading to product shortages around the world. However, there is good news here. In 2023, amid protests after three years of lockdowns and mandates around testing, China seems to be easing these restrictions. So we'll watch this space for 2023. 

Sascha: [00:09:29] If people want to learn more about inflation, is there a dive episode they should check out?

Em: [00:09:33] Yes, there is. We have a dive episode called Lettuce is just the tip of the iceberg, inflation around the world. To go check that out to hear more. 

Sascha: [00:09:42] Thank you so much for joining me for your dive debut today, Em. 

Em: [00:09:46] Thanks so much, Sascha. See you in 2023. 

Sascha: [00:09:50] Well, I'm welcoming another familiar voice to the dive. Now it's Alec Renehant. And Alec, welcome to the final dive episode for 2022. 

Alec: [00:09:59] Hey, Sascha, good to be here. So we've covered some of the big stories, I think Darcy speaking about Russia's invasion of Ukraine and M talking about inflation. Probably a top of mind for me. But given that they're off the board, I have to talk about the man that we don't want to speak about in 2023, and that is Elon Musk. He captured headlines around the world, but no more so than his acquisition of Twitter. The will he won't he of 2022. First of all it was I'm going to buy Twitter at 54.20 a share, which works out to be about 44 billion USD. Then it was there are too many bots on the platform and I'm going to pull out Twitter serves him. And then just as they're about to go to court, Elon decides to pay the full purchase price and acquire Twitter. Operator acquires Twitter. He fires more than half the workforce, starts tweeting. Now he's leaking internal Twitter emails, which he's calling the Twitter files. It's all happening at Twitter, but I think the story underneath the story is less about Twitter and more about how it's affecting some of his other business interests. He's sold almost $40 billion worth of Tesla shares this year. His ownership stake in Tesla has gone from 17% at the start of the year to a little bit over 13%. I think Tesla shareholders are rightfully getting nervous that Elon's a little bit distracted with the new acquisition. But look, I think there are far more interesting Elon Musk stories than the Twitter story. And so if people are missing that Elon Fix over the summer break, Wade in an episode earlier this year titled 60% of the World Don't Have Internet. Elon plans to change that looking at his company, SpaceX and StarLink, the satellite Internet service that they're creating with low Earth orbit satellites. So get off Twitter and go and check that story out. Now, Sascha, you've been hosting this episode and asking the team the biggest stories that stood out for them. But we've been producing the die for almost a year. Now you've been hosting it. You've had a lot of business stories come across your desk. What's one that stands out for you? 

Sascha: [00:12:10] Mine is definitely about cybersecurity. The Optus hack was a massive story in Australia and it dominated the news cycle. It was Australia's second largest telco and they reported that they'd been hacked and the data of up to 9.8 million Australians had been stolen. Now for context, with a population of just 26 million people, that's almost 40% of our population. And then it was followed closely by a similar attack on Medibank. But if you just Google cyber attack Australia, then you'll also read reports on companies like Canva, ANU and countless others. There were so many attacks just like this this year. In our research for this episode, we learn that 45% of American companies have reported a cyber attack in the past year. And a cyber attack happens every 39 seconds. And this isn't just a technology problem. The top three sectors that report cyber breaches are education, 10%, and the government with 18%. But actually the number one industry that reports cyber attacks is healthcare with 21%. So this episode, it got me, you know, rechecking my two factor authentication and looking a little bit more closely at those cybersecurity ETFs from my portfolio. So that is my big story for 2022. Can't wait to see what's coming down the pipeline next year. I'm going to take a well-earned break and then come back ready to get into it. So that's my story. Alec, thank you for all your work and thank you for making this such a successful year. 

Alec: [00:13:50] Thanks, Sascha. What a year it's been. We managed to win Best Business Podcast at the Australian Podcast Awards, so I can't wait to see what we achieve in 2023. 

Sascha: [00:14:00] So that's it from us. We will be back in your feed on the 30th of January. If you enjoyed the dive, then please tell a friend about it as 149 episodes for them to dig into over the summer break. I'm sure that's enough listening to get you covered for the next month. Remember, you can follow us on Instagram. We're at thedivebusinessnews. You can contact us by email thedive@equitymates.com And subscribe or follow wherever you're listening right now. And then when we're back after our own break, you will hear us refreshed there in your podcast app. I'd like to say a huge thank you for joining me and my colleagues this year, and thank you for listening. Until January.