Bumper profits for Westpac, Telstra; jobs boom might delay rate cut

Bumper profits for Westpac, Telstra; jobs boom might delay rate cut

News in brief

24,500 new jobs were created in July, sending the unemployment rate down from 4.3pc in June to 4.2pc last month. That was in line with expectations, and demonstrates the remarkable resilience of the Australian economy - and may see the next interest rate cut delayed.

 

ASIC has proposed a change to the way it looks at super funds that invest in housing, ahead of next week's reform roundtable. The change could unlock more than $8 billion in new housing development paid for by super funds and fast-track the development of 35,000 new homes. 

 

Speaking of ASIC - the regulator is suing Mercer Super for its approach to refunding insurance premiums to dead members. ASIC alleges the $70 billion fund has a “pattern of long-standing and systemic failure” to comply with the law.

 

Telstra has delivered an annual net profit of $2.3 billion, up 31pc on last year. Mobile earnings were up 3.5% as the telco again lifted the price of phone plans, but the big story was a reduction in costs, partly on the back of letting some 3200 jobs go. 

 

European leaders say they have agreed a strategy with US president Donald Trump ahead of his meeting with Vladimir Putin today in Alaska. Trump has agreed not to negotiate territory, and instead leave those talks up to Ukraine and Russia directly.

Fear-o-meter

Former Qantas CEO Alan Joyce has made his first public speech since leaving the airline in 2023, addressing the Australian Aviation Summit about both his time at Qantas, and the need for change in the industry.

 

"Qantas was the only major Australian airline not to go bankrupt during or after the pandemic. That wasn’t luck. That was resilience. But here’s the real insight: resilience isn’t a reaction. It’s a decision made years in advance, often when it’s uncomfortable, even unpopular.

 

We had spent the better part of a decade strengthening our balance sheet, simplifying our fleet, digitising our operations, and building the kind of flexibility that shows its true value when everything else is falling apart.

 

...Australia is fortunate to have the strong aviation industry it does today. But let’s not be naive. The next crisis is always just around the corner.

 

What we need now is progress, not paralysis. A bold plan, not guilt. And that plan starts quite literally with fuel. 

 

So, let me be blunt. Australia should act – and act now – to build a sustainable aviation fuel industry. This will help build our global reputation as a nation that takes environmental protection seriously. It will deliver economic benefits too, reducing our purchase of carbon offsets and our reliance on imported fuel – and stop handing future jobs to other countries.”

Fear & Greed Q+A today

Is the four day working week just a pipe dream?

 

Adam Lang and Michael Thompson from the Fear & Greed team discuss the likelihood of it happening in Australia, after the ACTU's proposal this week.

 

"There's been trials in the UK [and] Iceland. Those particular trials have stated that they have had no drop in productivity with better wellbeing and retention. So in those instances, they found a way to make it at least productivity neutral or even better. They've had to reschedule the roster, like maybe decide on opening hours or availability times.

 

They've tested doing that in New Zealand, a company Perpetual Guardian was able to do that and showed a productivity jump of 25%. In some ways you look at that and go, that's fantastic. Then you're wondering, well, what were you doing before that stopped you from achieving that?

 

Manufacturing, obviously in-person healthcare, entertainment, hospitality, they will always face bigger hurdles in how to make this work well and still be productive. I think it's really difficult... to mandate. So to your question, do you ever think we'll get to a four-day working week? My answer is yes, but it doesn't mean it can work for everyone. And I don't think it will ever work all of the time, right? I think it should be a choice based on commercial realities."

It’s Friday the 15th of August. Westpac has posted a cracker of a result under new CEO Anthony Miller, with quarterly net profit lifting to $1.9 billion. Miller says households are benefiting from lower inflation and falling interest rates, which means lower levels of customer stress. His first numbers are a gift for shareholders - investors flocked back to Westpac's shares, sending them up more than 6pc, and helping the S&P/ASX 200 to a new high.

Greed-o-meter

Bank	Share price	Year change
CBA	$167.21	+24.59%
Westpac	$36.04	+24.92%
NAB	$38.88	+8.63%
ANZ	$32.50	+13.12%
Macquarie	$216.62	+5.26%

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A stellar week for Westpac's share price, not so great for Commonwealth Bank. Here's where the banks are sitting right now, based on market cap, and the change in their share price over the last 12 months:

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Source: Market Index