How little we learned from COVID. March 13, 2026

25:36It's all a multifactorial thing. But you see the emails get leaked from the agents. They go, hey, we've just noticed interest rates have gone up. You could put this as a, you know, it happens, man. Because the market can bear it, not because you have to. The label doesn't go, well, bugger, I'm paying an extra$100 a month on my investment property. I couldn't possibly keep the property unless I put the rent up by the same amount. No. They're putting rent up because they can't, because of the 1 % vacancy rate. Oh, put it the other way. There's a 5 % vacancy rate. The real estate agent says, rates are up 1%.

26:05You should put your rent up. It's like, but if I do that, the tenant will leave. So I'm not going to. I'm going to charge what the market will bear in both directions. I find it too simplistic an argument. It's not a silver bullet, one and done kind of. It's everything. But I would say at a broad level, particularly given the current structure of the market, there is a reasonably decent influence of interest rates in terms of what is charged to renters. Maybe. I think the landlord is going to charge what they can charge. Right into us, folks. Anyone out there renting, I think we'll see it. So being used to the excuse is different, by the way.

26:41So just to be really clear. Sure. I'm sure they use it as an excuse. Right. But which landlord is not charging what the market will bear now, leaving money on the table, and only increases the rent because rates went up? I just don't believe they're not charging market rent already. But also, again, it's the margin thing. There's plenty of people who have bought investment properties who have leave it up to the absolute extent, and the interest rates go up. And it's like, I'm already negatively – I can't be more negatively geared because I just can't – I don't have the cash flow to service these various things.

27:11So there is a point at which it's sort of like it still does impact, not because I'm not – I'm probably charging as much as I think I can. But the moment that my costs go up even further, it's like – it's just a very strong push for me to go – not even in a perfectly rational way. Anyway, we've dovetailed off the – or we've skewed off the main thread here. Other than just sort of saying you're making the point that interest rates impact a certain percentage of the population. I was just – let's not be too general. I was just going to try it's not just the mortgage holders. Let's just call it it's some proportion of the renters as well.

27:51Yes, that's right. And so – I didn't mean to say it wasn't impacted. I just – you bristle at some things. I bristle at the whole rents are up there for rents will go up. It's like, landlords aren't like, you know what? I could charge more. I'm not going to let's put rates up. It's like, no, no, they're charging. I mean, by the way, some good landlords out there who haven't. Plenty of great ones, yeah. I've been putting rents up because I know my tenants are tough and I need the money and I'm happy to kind of, you know. That's great. 100%. But I don't know many people who leave money on the table.

28:14It's like, I can increase rents, but I'm not going to because the owner didn't put rates up. It's like, totally. No, you're going to charge as much as you can. Sorry, I interrupted. But continue your thought, which was they've increased interest rates and they're hurting the ones most under mortgage trash and let's say X percent of the rentals as well. Yes, perfect, perfect. Which is probably 10 % to 20 % of the population. Exactly. Huge. And they're bearing the entire weight. And the reason they're bearing the entire weight is twofold. One is that we choose to impact the price of money, which I know is your issue.

28:44I'm not for a second ignoring that or leaving it out. But in the current apparatus, the reason we said this before a million times ago, I keep saying, I don't care which government you like and don't like, which party you do or don't like. The government is doing nothing, literally nothing, to help the fight against inflation. And so the Reserve Bank's like, you've given me a mandate, you've given me a tool. I've got a screw here, but you give me a hammer. I'm going to hit that screw with a hammer because what else do I do? You told me to get the screw into the wood. I'm only going to hammer up.

29:13Maybe it'll work. I get that. I guess all I'm saying is you're not wrong. You're not wrong. I just find it a very, very unsatisfying. answer. It's awful. It's awful because we have to. It's like, you know, you ask someone who's mentally deranged why you're doing that. It's like, they'll give you an answer. And you're going to go, oh, because if you didn't do it, the pixies were going to come and steal your toenails in the night. I'm like, oh, okay, fair enough. No, that's madness. You've got an explanation in your head. It doesn't mean I have to accept it. And that's the part that I bristle with.

29:50Fair, fair. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

30:22for the occasional breakdown in the supply chain, if there is consequence for the breakdown in the supply chain, you're going to hold some more stock on hand. And that is not a particularly blinding insight. I'm not that smart, right? So if we need some stuff, we don't have enough of the stuff. We mentioned groceries before, right? I'm going to probably get the milk when the milk's half empty. Am I stockpiling milk? No, but I'm kind of having enough to make sure I've got enough just in case we use it a bit quicker than I think or don't get to the shop on Tuesday or whatever the reason is. It's not rocket surgery, right?

30:52And so it's just the... We do have a stockpile, by the way. You know where it is, don't you? It's in the US. It's in the US. And look, the Yanks will send to us, I'm sure. That's not far away, is it? Right, seriously. No. They'll give it to us in an emergency, won't they? Even then, it's only kind of weeks worth of supply, which is, again, fine nothing goes wrong. The point of a stockpile is... What it is is a press start. What it is, it's a political announcement that you can stand there and go, look what we did. It's like, great. But just don't look too close. We are now more than six years past the worst of the onset of COVID.

31:24It did last for a long time, so not wanting to gildly hear or get an argument about what happened when. Jan Feb 2020. Hey, not enough PPE. Hmm. Maybe we should make some – when we're through this, let's actually fix that problem. What else? So if we realise that stockpiles were important. It's perishable, though, right? Oh, no, it's non-perishable. So it'll sit there like literally for centuries before anything's wrong with it. Okay. Stockpiles are important, we learned. Okay, so what else might we need that we don't have enough of that we probably should have more of just in case? Strategic kind of – a reserve of strategic value.

31:59Yeah, strategic reserve, something like that. Something like that. And, you know, I mean, only the things that maybe if we didn't have them, we couldn't actually get around or produce products or – I don't know. I just – I don't – is there a cost? We're not a serious country. Right? We're not a serious country. The worst part of this is not a difficult decision. It's not a particularly expensive decision. No. You're going to use the stockpile. Here's what you do. It's insurance. It's insurance, right? And insurance, as we say all the time, is stupidly expensive. The premiums are stupidly expensive and a waste of money until the very day you need it, in which case they are the cheapest thing in the world.

32:36Yeah. And we learned that. I'm not saying we have to refine the stuff here. I don't care how we get it. Build some... I was going to say a bad word. Build some bloody big tanks. put the petrol in the tanks and then take the petrol out of those tanks because apparently it goes off for a certain amount of time that's cool pump the new stuff in take the old stuff out it's a really easy thing to do we were doing first in first out inventory management since Adam was a boy this is not difficult right no not at all it is just it is mind blowing that in the six years since under both parties so guess what a pox on both your houses no one went I mean having it in the States is okay maybe a six or ten year plan doesn't need to be quick just start now just build a tank and then when we finish that one and build another one, finish up and build another one, and start filling it with fuel.

33:19That's probably a good idea because what does it cost us? It costs us the holding cost, government borrowing. Is it what, 4 %? That's all. Because we've got to sell it again. We're not throwing it out. It doesn't go off. And you go, hold on that petrol. Oh, we'll pour in a bass strike because we can't use it for anything. It is not a difficult conversation. It's better than PPA. Especially if you do it when it's cheap. Right? Right. It's like when it's, you're like, that is the time to do it. It's like, you know. Be opportunistic. Yeah. What's the demand for PPA at the moment? and not much. There's actually too much around X-Log.

33:48Yeah. Well, that's a good opportunity. Again, a strategic opportunity of sorts. And then once you've got it, again, it doesn't break down. I mean, it breaks down if you don't touch it, but you just use it as an inventory pile. So you get 12 months worth of PPE in, and then you use the one you bought 12 months ago and you replace it with another one. So it's like the stockpile will go off when you need it. Yes, only if you lock it in a cement bunker and never touch it. You just don't. You say, well, this is my inventory pile, and it's massive. but we're just going to take from the front and add to the back and just keep doing that.

34:18It's not a difficult thing. Ask the supermarkets. They know what they're doing. This is not a difficult task, people. Okay, tell you a funny story. Go on. So I've got a bit of lawn to mow. I've got a ride on. Is your grass like a foot and a half tall? Oh, it's so out of control. It's out of control. Keep going. All of the rain. It's been too hard to do, which I'm not entirely upset at quite because I've given an excuse not to do it. Anyway, we did have a bit of sunshine the other day, and so I thought I'll go get some petrol. so I didn't even think here I just chucked the jerry can in the car I got up to the servo and I'm filling up the jerry can you're that guy and I'm getting all these filthy I'm getting these filthy looks and then it clicked and I'm like I'm mowing the lawn they're like sure you are no no no I've got to mow the lawn I was filling up jerry cans before it was cool it's got nothing to do with the Middle East it's just a curvy man I've got to do the same thing I've got two 10 litre jerrys I've used them both and I've been meaning to fill up the first one because I do two so I can...

35:15One's always flawless. So I've used them both. Now I'm thinking... Inventory management. There you go. Now I'm going to take two jerrycads. Look, I'm even worse than you because I'm filling up two of them. Oh, you must be really desperate. He's that guy. Wear a balaclava or something. You just do it in the middle of the night because you're going to get some filthies. Definitely. Balaclava made it go so well. I walk that one back. Good idea. But definitely in the middle of the night. I like it. A wig. I'll find a wig. People never know. It's me. A baseball cap or something. Yeah. It's a worry.

35:44Let's move on because we've done 35 minutes of winching about oil and stockpiles and economics. Speaking of, I'm not going to spend much time on this unless you want to. Just notable, as we went to record this this morning, recording on the 12th of March. Important to date stamp for all the reasons because this entire podcast could be added up on the time it goes to air. Atlassian has cut 1 ,600 jobs, including their chief technology officer. And guess what? Blaming AI. Now, part of it, by the way, for Atlassian's AI coming to take its business. The other part, though, is going to be effectively using AI to do what it needs to do.

36:21Here's the other thing. 30 % of the job cuts coming from Australia. So 480 people in Australia alone rest around the rest of the country, the rest of the world, I should say.

36:32So here's a quote from Mike Cunham-Brooks. Quote, we are doing this to self-fund further investment in AI and enterprise sales while strengthening our financial profile. We're also changing the way we work and reorganizing around our system of work to move faster, end quote. I don't really have much to add to what we talked about last week. So I'm not going to spend too much time other than to say, I was excused to be a fearmonger this morning on Twitter. I mean, maybe because I... Fearmonger and doomonger are different things, I think. Fearmonger in the sense of, am I fearful that the range of outcomes includes meaningful dislocation in jobs for a period of time?

37:07Yeah, you bet. I am worried about that. I'm fearful of that, yes. If that makes you a fearmonger, so be it. I'm not a futurist. I'm not a doomsayer. I'm not saying this will happen or must happen or anything like that. What I am worried about is that we're not prepared for that range of outcomes. It could happen and it would be bad. Speaking of stockpiling range of outcomes, what are we preparing for? And frankly, mate, here's the other thing. I hope you've got some thoughts. I have no particular way. I was going to ask you. Right? So you kind of go, well, I mean, back to our previous, how do you prepare?

37:37You run a structurally balanced budget and you have some money saved up just in case we need to use our welfare payments to how you actually prepare. Throw in a sovereign wealth fund while we're doing it. Just to go back to another favourite. Universal basic income potentially, something we've talked about a lot. So yeah. And again, when should that have been done? Five years, 10 years, 20 years ago. When else should it be done today? So look around and go, hey, go around the cabinet table. If the proverbial hits the proverbial, then what would we do and how would we do it and how would we fund it and what would it look like?

38:04And I don't have any confidence at all. Now, government shouldn't be the solution to every problem, but if safety nets are government roles and they are, this is kind of something they should absolutely be prepared for. I'm not saying, for God's sake, please don't go and made in Australia and build data sets and build local AI. We don't want a kangaroo AI, right? Just no. But we need to be aware of the risk and the potential cost and the potential implications of dealing with what might come. At the moment, it's limited to software companies. I say it like it doesn't matter. I tell you them, it's not us.

38:35I don't mean that at all. What I mean is, at the moment, it's a limited area where the job cuts have been most keenly felt. I think it was CBO NAB, sacked another 400 staff, we announced that today as well, maybe yesterday. I just think you're a massive AI bull. I'm a massive AI bull. When I say bull, I mean the technology itself. The technology, yeah. It will be revolutionary, I suspect. I don't think that's a particularly controversial view, but if it is, revolutions come with meaningful costs. And I just, I don't know what to say, mate, other than here we are again, still nothing out of Canberra.

39:09Maybe the budget will have something. I don't want more government spending on just make work garbage. And I don't think trying to have an Australian loan makes any sense. If there's a good idea, still find capital to back it. We don't need governments involved in that part of it. But broadly speaking, we need to be ready socially for what may come. Yep. I mean, I think the Atlassian news is just the only reason that we should touch on it is that, you know, one swallow does not always a summer make. And, you know, some companies are doing some cuts. And let's be real, too. I think AI is a reasonably convenient excuse for some companies that are looking to downsize.

39:46And so there's a little bit of that in there as well. But once you see it, like these aren't small cuts. This is 10 % of Atlassian staff, right? Yeah. And when you see it happening on multiple fronts of multiple different companies, I suppose the thing to underline here is that there's signal in this. Yes. If you're out there as an investor going, is this a real thing? I think at this point we can say, yeah, it's a real thing. Yes. Yeah. And by the way, we've only just seen the start of it. There will be much, much more. um yeah it's all separate question as to how we how we deal with it all but i i think it's i think it's actually in i'm going to go back to my oil thing it's probably natural and good at a at a at a very high level uh long-term kind of perspective not to not not not to downplay the the individual short-term negativity of it that's yeah and yeah but it is it's also one of those things is that we there's a lot of things in life and markets and that where you can shout at the sky because it just doesn't feel right or proper or it just but it still is like it just is you know and and and it's kind of like it's very easy to tut from the outside but i mean imagine imagine anyone listening who's trying to make ends meet with their business and someone has just gifted you a technology that increases your productivity a hundredfold and reduces your costs I mean, what are you going to do?

41:19Right? And you might go, well, no, I'm not because I'm super high and mighty and noble. It's like, yeah, well, you're competitors. And then you don't exist. You're not in business anymore. So good on you for taking the stand, but you don't exist now. And now you're not even in the game. So it is something that we will need to wrestle with and how we deal with it. I just hope we don't try and apply political solutions to very real-world problems because they never work out well. That's my issue too. And this government's got, unfortunately, a bit of a predilection for throwing money and getting involved where...

41:55Well, they all do. Arguably, they... Do you want Pepsi or do you want Coke? Well... Same thing. I suppose, yeah. They were probably more populous recently too. Andrew Hastie's came out about Made in Australia as well, so maybe they're both as bad as each other. I just... See the new Nationals leaders speech? Yeah, I do. We need more Australian babies and more Australian barbecues. More Australian jokes. All the big issues. What does that even mean? I don't even know what you're going to say. Are you just dog whistling to the racists? Yeah, that's exactly what you're doing. Sorry. Let's not go down that path.

42:26No. I will only say I suspect it's trying to be one nation. We're going to out one nation, one nation. Without being obviously offensive. We're exactly like them, just not as racist. Who goes to the polling booth and goes, you know what we need? More Australian babies. Out of all of the issues. You know what? There's not enough barbecues out there. We need, and not just barbecues, we need more Australian barbecues. Can I say the number of people on Twitter who seem to think that birth rate is a massive issue and we need more kids and mum should stay home. There was a massive, get over and listen.

43:01That's a whole other thing. Mate, honestly, the number of people who are just like, we should be encouraging more people to have kids. Why? You know what I think with that? It's like, go for it. Yeah, yeah. Go for it. No one's stopping you. Can you stop telling me how I should, me and my partner, how we should view our fertility? Do we have a fertility duty to the? No. I think we'll make our own decisions. Thanks very much. But if you feel passionately enough about it, you can pump out 10 kids if you want. Fill your boots. Yeah. Oh, no, I should do it. Oh, sorry. I should do it. Right, okay, gotcha.

43:36It's crazy. It's crazy. Anyway, it doesn't. Different conversation. Yeah, AO's big. Hey, let's go to Allegra Spender. So this was really, really cool. I tweeted, and you actually, we talked about this very briefly off air. Neither of us agree with everything she suggested. But Allegra Spender, who is the independent member for Wentworth, Malcolm Turnbull's old suit, I think it's right, isn't it? Wentworth? Yeah, I'm sure that's right. Put up a 74-page white paper on some taxation changes. when was the last time you saw anybody from any party, any part of the world put up a 74 page white paper on tax that was genuinely designed to actually improve the tax mix I don't agree with all your suggestions and not just that but was beyond a fiddling at the edges exactly it was actually you know, again I certainly didn't agree with everything there but I do applaud the bold thinking It's brilliant.

44:35Yeah. I agree with somebody just to go with this. Here's, you know, this is a really great quote, which came from the, I think it was from the paper. No, it was a speech to the National Press Club. Quote, consider someone earning$100 ,000 a year, just over the median wage. Earned as a salary, you pay$23 ,000 in tax. Split through a family trust, you pay$13 ,000. Earned as a capital gain, you pay$7 ,000. And earned from your super balance in retirement, you pay no tax at all end quote seems perfectly fair i just thought that was the clearest i wonder if there's a part of why the wealth divide's growing oh man yes nah nothing unrelated and look there are differences in people again i i'm i say to someone by the way who'd be very disadvantaged by a by a higher tax burden on capital as opposed to labor so you're an austrian by nature these days.

45:29And I'm going to criticize self-interest in one sense, but also recognize that self-interest is kind of the motivating factor, right? So you've always got to run both sides of the street on this one. Sure. The self-interest and feedback I'm getting on Twitter when I'm coming to this stuff is all largely just, but I'm a superannual, so I shouldn't have to pay tax, or, but I'm a business owner, so I want this, or, but I, capital gains should be impacted. Oh yeah, it turns out I'm an investor. It's like, how about you all just pull your heads in? And I know, and this is naive, right? This is me being Pollyanna.

45:56It's like, I'm about to say a word, you're going to laugh or a phrase. Can we just not think about the national interest instead? Like at some level, you know, yes, it's all about you and your precious little whatever's, whatever your self-interest is, I get it. And self-interest matters. But at some point, it's like, we're more than just economic machines. And the society we live in, even if you are self-interested, we've said a million times, you'd rather be self-interested in a functioning economy that's growing and where things are working than not. Even outside that, if you are on Twitter and you're talking about this stuff, I'm going to presume you're actually doing okay for yourself.

46:27Maybe not the top 1%, maybe not the top 25%. The whinging from a, I'm all right, Jack, and I'd like to be even better. I always think about people, hi, Jen, if you're listening, who are like, I'm a multi-billionaire. I'd like to pay less tax, please. And at some point, I'm just like, can you not? Have you never seen a mirror? How do you have that much money and go, you know what the problem is? I pay too much tax. You couldn't spend all the money you've got and you still can only motivate yourself to be selfish. I find that just so incredibly difficult. Anyway, that's my quick rant. Here's what she proposed, mate, just for fun.

47:02We might pick some of those apart and some others. This is straight from the Fin Review article on it. It was published on, to credit, because I'm going to read it almost forward. John Keogh wrote the article on March 11. Looked it up. It's called Spender's$29 billion plan, Cutting Income Tax by Taxing Assets More. Here's the suggestion. Again, neither you nor I agree with them all, but just for fun. She said we should cut the bottom marginal tax rate from 16 % to 13 % and cut all other marginal tax rates across the income spectrum by two and a half cents in the dollar. Reduce the CGT discount from 50 to 30 percent.

47:33Introduce a 27.5 percent tax rate on income from investments and remove the tax-free threshold for non-labor income. In other words, the tax-free threshold you get when you're earning money. If you're simply not earning anymore, you don't get that at all. Phase down negative gearing over five to 10 years and align superannuation earnings tax thresholds with thrushes in the income tax system with a Standard discount. That's the...

47:58I'm stopping because I've then read the rest of the article. Chalmers said, he had engaged with spending or tax cuts and he made important contributions. I respect the value-horedity, as Chalmers said. We've already legislated tax cuts for every taxpayer. We've just legislated our major reforms to make super-sister fair as well. It's like, so what you've really said, Jim, is blah, blah, blah. She said some things. Let me tell you what I'm doing and why you should vote for me. It's like, he's a treasurer, dude. He's a politician. What do you expect? I can tell you what. Anyway. So I got some thoughts, mate.

48:22And I'll throw mine if that's okay, and you can throw yours. Please, yeah. I wouldn't cut the bottom marginal tax rate. And the reason why is larger the cost of it. By the way, this is a$29 billion, as I mentioned in the article, headline, reallocation. Why wouldn't I cut it? Because generally doesn't need a cut in the tax-free threshold. The most expensive tax cut you can do per percentage point reduced is at the bottom end, because everybody gets them. I don't need a reduction in the marginal tax, in my tax-free threshold, or the lower marginal tax rate. Neither does Gina, neither does Twiggy.

48:52You can do it, sure. But if you had a limited amount of money to spend, you can use a low and middle income tax offset, the old Lomito, or... I kind of love the people in Canberra. Some of the bureaucrats call it the Lamington, because we're kind of L-M-I-T-O, Lamington. You've got to get Lamington out of that. The Lamington tax cut offset, which basically gave money back to low income owners without giving it to everybody who has hit those thresholds. So I wouldn't do it that way. I don't mind the rest of it. Cutting marginal rates makes a whole lot of sense. I wouldn't reduce the CGT discount.

49:17I return it to indexation. We've talked about that before. I don't know the tax rate on income from investments. That feels like a tax cut to me. But if it comes by removing the tax rate threshold, you'd have to do the maths and work out who's better off and who's worse off as a result from that one. If I, you know, she doesn't talk about franking it. I'm not sure how that would be impacted. So that one's a bit wooly. Face that negative gearing, absolutely on board with. And superannuation earnings tax thresholds, I've said before, I would tax all superannuation income streams as personal tax with a higher tax-free threshold for retirees.

49:52And you include the pension of that as well. Basically, the pension becomes effectively a universal pension like in New Zealand, and you just tax money above a tax-free threshold at marginal rates. Why? Because super is supposed to be a retirement income system not a tax shelter. And so if you're taking – you can earn 10 % on a$2 million super balance in pension phase. so you're going to 200 grand a year pay zero income tax which is just when you think of the worker on 100 grand pays 23 grand i don't know the tax rate is on right tax rate on 200 grand is probably we've all been a quarter by definition so call it 50 just for fun um more than that so someone i'm working for a quid and i own 200 grand i pay 50 000 in tax super anyone pays exactly zero yes i know they pay tax through their lives but guess what that funded the service at that point during their working lives.

50:42The servers have to be funded now. Someone's going to pay for them. And giving a super annual 200 grand tax-free is, I don't even know how you make that up. I mean, some people do. I've had it on Twitter. Yeah. What do you think, mate? What would you do differently? What do you like? What don't you like about what you said? I mean, it's just sort of, it's just directionally, it's in the right direction. Yeah. Yeah. I haven't read the 73-page document, so I would just. I haven't read the headlines. Yeah, so I won't get into specifics. I'm just going to be boring and just repeat what I said. I think it's directionally right, and I applaud the broad thinking.

51:19Where these debates get – not even debates because they just so rarely happen, because this will be – is already vanished from the zeitgeist, but you get bogged down in silly detailed arguments. Yeah. And, yeah, so I don't have anything to sort of say other than that. I think you're a million miles wrong too. I think if we sat down for a week, you know, across a big boardroom table, we would spend most of our time debating the 5 % we didn't agree with. And it's probably unavoidable to how it is. So I'm just saying I've got nothing meaningful to add other than, yes, what you've said, what Allegra has said, I think is generally right.

52:06I mean, yes, would I kind of do it a little bit differently? Yes, but are any of those approaches a million times better than what we're doing? Yes, they are. So, you know, perfect is the enemy of the good, as I'm really fond of saying. So, it's like if I had to take that and there wasn't any other choice, I'll go with Allegra. Yeah. Sounds good. It's far better than what we've got now, right? Yeah. That's the key benefit. And by the way, and just for the cynic quota, it's never going to happen. No. We're already doing the things. It's never going to see the light of day. Thank you for being a positive force of sunlight.

52:44It's just not. Like, you know. I'm not sure you're wrong. Can you let me believe? Can you just let me live in that little world? Well, that's what I always say about Bitcoin, right? Just let me believe, man. You have my vision. We talked last week about pessimists who are optimists have just lost faith in the will to live. And I think I feel myself being exorably drawn in that direction, I have to say, because I'm still in the bargaining phase of this kind of the grief, which is, you know, okay, okay, they suck. But if they just did these things, you know, they've got a chance and maybe finally someone will have the bottle to step up.

53:14And a couple of great articles. So Shane Wright, the journo who writes for the Fairfax slash nine slash where they are papers these days, great article during the week on Jim Trump's having the bottle, needing to have the bottle to see this series, used that phrase, which is what reminded me. Have a look at that. Just a random shout out. If you're on Twitter or LinkedIn, that's not where else he is, follow Chris Richardson. Do you follow him? I think so, yes. Do yourself a favour if you don't. He is great. Some really good, modest length tweets, so kind of not 104, 280 characters, but long enough.

53:45They're not articles, they're just in between. He's really smart and really thoughtful and just he's one of those guys who loves the data. So every now and then he's like, hey, here's the thing. It's like, huh. He was the first mainstream economist to, as far as I know, that I saw anyway, to call out the tobacco tax stuff, the massive fall in excise. I mean, everyone talked about it. We knew about the shops and the gang wars and all that kind of stuff, but putting the numbers to it, to how much money was being foregone, was the first time I'd seen that highlighted. He's just great on all this stuff.

54:15You should have some kind of department in Treasury that does that stuff. You should, shouldn't you? Help the leaders make decisions. That'd be a good... Oh, do we? Anyway. If only that asked the question. Yeah. Jim Tramon sees his office going, I wish I could find some answers somewhere. Oh, well. Oh, well. Never mind. What do the focus groups say again? Let's go with that instead. We're talking about vibe coding. Is this like vibe policy is what it is? No, it's not. It's worse than that, mate. Because it's just the stuff that people actually want. He's not even thinking this is what I think might be best.

54:45He's like, well, I could ask what would be best or I could check what would be popular and I could do the popular thing instead. It's like, yeah, let's do that. It's like, you reckon I'm an optimist and you're a pessimist. Can you imagine working in government? Can you imagine working in Treasury? And you would have, you've had all this conversation around the lunch table, right? And around the water cooler. And you talked about it a million times. And you've got all these reports that are half written, just waiting for someone to say, can you please give me a report on this? It's like, oh, thank God.

55:10Yes, here it is. And you just wait. And the phone's just sitting on the desk. You keep looking at it going, he'll ring eventually. I'm sure he'll ring soon. Maybe tomorrow. Maybe he'll ring tomorrow. Next week? Do you reckon the Treasury's lost my number? Should I go and give him my number? because I'm sure he's just waiting to say, guys, you spend your lives doing this. You have literally dedicated careers to this. You have hundreds and hundreds of people down there, all with really smart thoughts. And you've thought about all the permutations and angles. The phone's going to ring sometime soon, right?

55:37It must be, I don't know how you maintain any sort of spirit, any sort of like, you just go to work, it's like, oh, how was work? Eh, good, the treasurer didn't call again. It's like, I don't know how you keep doing that. How did you give up and go and do something else? I don't know. I don't know. come on this podcast and yell at the airwaves for an hour and a half. That's one way. That's one way. Mate, let's finish off with a strange sale. Dino Nobel, the fertilizer company, sold a Queensland fertilizer plant. And get your calculators out, people, because you're going to need to write this number down.

56:07The sale price was a buck. A single, solitary dollar. We should chip in 50 cents each and buy it. Buy it. It was sold to a mob out of Brisbane. They called Mayfair. for a dollar. Saving 1 ,100 jobs in the process, which of course every politician was happy to go and put a hard hat and a high-vis vest and walk around and say, look, we saved these jobs, and they didn't do anything to do it. You almost think the government would have scraped together a buck to do it if it was such an easy thing. Which, so... So what's the catch? Right. That's exactly the question. Plenty of money was in mind-sauve for a dollar too.

56:42I should say, by the way, just for those who don't know and it's not really interesting or whatever, but why a buck? Because have a contract. Do you do business law in your science degree? Probably not. No. So in law, you have to have consideration for a contract to be valid. Something of value has to pass between the parties. Otherwise, it's a gift, I suppose. And so to the contract to be able to be enforced, there has to be a consideration is a fancy legal word for a price, an amount of money, an exchange of value. So I give you a dollar. You give me the fertilizer plant. We're sweet. We've exchanged consideration.

57:19I've got the assets. You've got the money. in the contract now valid and can be enforced. So that's why a dollar a free one's wondering why that happens. They'll say, of course, it goes broke and gets liquidated. But if you're going to sell something, the title changes at a buck. And, of course, the answer you said, you know, what's the catch? The catch is this thing is not making money at all. It is losing money. It's a liability. You're buying a liability. How do you sell a loss-making business with no likelihood of – and, by the way, I don't know this for sure, and I want to be a little bit careful, but I suspect there's probably some remediation requirements if you're making fertilizers.

57:50almost certainly right that's why the mines are sold for a buck normally is because they come with remediation obligations attached so when you finish mining you're still on the hook for tens or hundreds of millions of dollars to actually fix this thing back up you know not exactly fill in the hole but make sure it's safe to be used and is left you know a reasonable state that need to be made whole or there's a whole what you are buying is you get legal ownership of the entity but that entity owes a bunch of money and is obligated to spend a bunch of money in the future so it's just you know If it's too good to be true, this is generally true, right?

58:22If it sounds too good to be true, it's too good to be true. You're not getting something that's worth more than a dollar, right? The sellers aren't getting rid of this thing because they know that it's worth$10 ,000 and they're happy to give it to you for a dollar. Correct. Now, there's lots of stuff actually put. This is the fertilizer plant. It was actually part of the Mount Isa copper mine story because the fertilizer business effectively uses some of the output from the copper mine, and it actually helps make the copper mine more feasible because it's actually buying some of the outputs. And so this was all wrapped up in all that.

58:58Diana Noble wrote down the value of this. It's called Phosphate Hill. Fun for a fertilizer mob, surprise. $149 million after-tax impairment on the asset. They were going to close it down by the end of March had there not been a purchase. And had that purchase not gone through, effectively, it would have meant the Mount I was a copper smelter would also have been closed down because the copper smelter's existence was reliant on Fossate Hill continuing to be in business. So it's a fascinating kind of combination of assets and lots of stuff going on. Now, Mayfair, the company that's buying apparently is on the hook for up to$100 million in deferred payments if Fossate Hill hits some performance hurdles.

59:36So Dino Noble gets a little bit of upside. Although if you lost money last year, you're going to make enough money to pay$100 million in payments. I guess not, but maybe Diana and Nobel didn't want to be taken for absolute mugs. So they kind of went, okay, well, we'll do something about it. And that probably makes sense. So it's an interesting story altogether. But just I thought it was worth talking about the dollar purchase price, why it matters and what's going on. It comes down to the fact that you're getting it. You don't think it's worth much. The company selling it doesn't think it's worth much.

1:00:05If you buy it for a dollar, you go, well, worth a swing. We'll see whether it comes to anything. We can meet our obligations, so we can tip some capital on for that. We can also tip some capital in to turn it around, and we'll get a good return on investment. That's the belief, whether it happens. I'm not even trying to - No, no, no. Yeah, that's the question. Maybe they do. I don't know, but that is absolutely the calculus. Let's say there's a million dollars of obligations that are there, and it's like, well, I've got$10 million in the bank. I'll pay that out. I need another million dollars to bring things up to speed, but ever after I will be making$5 million in free cash flow per year.

1:00:43It's like every day of the week will you do that, right? Now, I will say, and this is where we get a little bit cynical. I do a little bit. This is the quote from Queensland's National Resources Minister, Dale Last. Quote, recent geopolitical events have also reinforced the importance of protecting Queensland's sovereign fertiliser manufacturing capability. End quote. Which to me feels like we've given the mob an implicit guarantee if they get in trouble, we'll help them. Yeah. Yeah, exactly what it is. Which makes the risk a little bit less. Yeah, it's sort of like... I get it for a dollar. You had my curiosity.

1:01:16Now you've got my attention. Exactly. So I don't know. I should be careful. I don't want to put words in Dale's mouth. Maybe nothing comes of it, but... Makes a good headline, doesn't it, though? Well, yeah. Asset sold for a dollar. And if you get to say that we're going to, you know... If you get to infer the government's protecting the capability without actually doing it, then the government's happy as well because they get to pretend they solved the jobs and we'll see what happens. I wouldn't want to bet there's no more government money going to Phosphate Hill at some point. Hey, this is interesting.

1:01:45We spent earlier in the pod talking about a very significant number already of more white-collar workers being laid off, and particularly in technology. Do you reckon they are as politically deserving of bailouts as someone in a hard hat? I'm not trying to sort of suggest that there should be one different to the other, but I bet you there is. There is something very politically attractive about wearing a hard hat because it's that almost, is jingoistic the right word? I don't know. It's that idea of like a real worker and I'm the man's man, you know, taking his steel lunchbox to work and hitting things with a hammer and, you know, making, driving the country forward.

1:02:31It's like, you know, some dude drinking some kombucha on a beanbag while coding up in Python. It just, I don't think has the same political appeal to sort of bail out? Or am I being too cynical? I don't reckon that those jobs are going to be seen as politically important. No, you're dead right. For all the reasons, I suspect. I said this before, humans have a fetish for making stuff. And I don't even necessarily mean that as a criticism. I think it's probably just evolutionary. Tangible stuff. We don't deal with abstract and intangible. We do not do well. And no services. You pour a coffee, yeah, the baristas get bad.

1:03:11It's because, oh, we just have more baristas now because we only have houses in holes. And it's kind of like... Yeah, it's because we all drink a butt ton of coffee. That's why. That didn't just appear. And we're happy to pay for it because we get value from it. They're providing a service we're paying. It's not a government-funded barista program. It's like we are literally saying, I would like a coffee, please. Please make it extra hot with a dollop of oat milk cream and, you know, something else. It doesn't make for great fodder for a VB commercial, does it? How do you feel? You can get it driving a plow.

1:03:38You can get it, you know, bending a steel beam. You can get it by making a piccolo latte. It doesn't work. It doesn't work. I honestly do think whenever I talk about made in Australia and that sort of the, again, my reference point is Twitter, which is not probably particularly representative, but it's the one where I get more grief than anything else. And for people who otherwise would agree with most things, when it comes to making less stuff here, it just evokes such, I just have to believe it's very, very visceral. So I get it. And that's why. So why? You're not cynical at all, mate. You're absolutely spot on here because the photos work.

1:04:14It's why every politician puts a hard hat on a high of his vest and goes somewhere where a thing is being done and made, a steel beam or whatever it is. They want photos in front of it because it works, right? And why does it work? I think, honestly, it's evolutionary. I really, really do. I think we come from people who made things with their hands. And while we are happy intellectually to do things differently, we have this really emotional connection to it. And even historically, we're not that far away from it, right? So our grandparents will make things with their hands. That's all there was.

1:04:41There was no tertiary industry back then. Universities were very, very, very, very, very limited. What services economies existed were largely doctors with hacksaw blades and a couple of universities for a couple of thousand people. So I suspect it's that, but you're absolutely right. No, of course it wouldn't work. Who cares about the techies who get laid off? That's not a headline. Farming's the other one, right? Yes, exactly. And I'm sure for the same reasons. So, yeah, no, you're dead right. And there'll be more, I mean, Lassie, I'm going to get rid of 500 people. We'll talk about the closed Queens and that coal mine costing 400 jobs, but Lassie's got 500 people.

1:05:16No one's going out in front of the office there and saying that here comes a bailout. We've got to keep it open for the jobs. Right. And we're not going to change it, but you're right. And I'm not saying we should, right? But I mean, if you find that absurd, then you should find it. It's not even trying to say, I hope no one thinks that we're suggesting that one class of worker is not deserving and another is. It's just like it's the same calculation. That is exactly the point. We're not saying that. Other people are because they're saying we'll give it to the manufacturing workers and the farmers, but we won't give it to the tech workers or the baristas or the whatever else.

1:05:45And you made the point before too. It's in large chunks, right? So one – and the justification, which again, the challenge is the justification works because people believe it. So it's, but what will happen to Mount Isa? And you go, oh, yeah, that would be bad. Okay, well, fine. If all Atlassian's workers were in Mount Isa, maybe things might be slightly different. Probably not a lot, but maybe in that sense, the town will die if Atlassian pulls out. Okay, well, maybe that's a conversation. I don't know whether it will be or not, but the idea of like it's an outback town, it doing a thing. As you say, it's a VB ad.

1:06:18The high-vis works. No one's where a high-vis is working with Atlassian's beanbag office going, hi, guys, I'm here for a photo op in my hard hat and my vest. Like, oh, dude, where's your polo shirt? And you know, whatever. I don't know. I don't want the chinos, whatever they wear these days. You blue cap like my Canbrook's wears or something. You're absolutely right, man. It's not cynical. Well, if it's cynical, it's cynical because the politicians themselves are cynical. All you're doing is recognising that. You're not taking any great leaps of logic here. This is just exactly who they are and exactly what they do.

1:06:46But again, and this is why we're talking about it, because to some degree they're doing it because we lap it up. They're not trying to convince us of these things. We just instinctively feel like a making things job is worth more than a whacking keys job. you know we can't help ourselves can we I'm convinced of our biology I really really am I don't think anyone consciously goes oh yeah because so how much economic activity is being added by those two people not the same amount okay well they're earning the same amount yeah spending the same amount yeah doing things that people want yeah most cases at last it's not subsidized our miners are so in fact in terms of actual value created from the jobs probably the tech jobs are creating more value than real like net value than subsidized car manufacturing or subsidized mining or whatever else it is.

1:07:31So normal money is subsidized, by the way. I'm talking about diesel fuel exercise in particular here. But it's just that reality, right? It just is what it is. Yeah. Yep. Sorry. I normally suppose you're optimistic. I've got nothing. I've got nothing. No, normally I would go, well, I don't know. But it's like, no, you nailed it. I hope I'm probably done, mate. Will you come back on Sunday? Yeah. Hell yeah. Let's answer some questions. If you have a question you want answered, info at fool.com.au is the place to go. Andrew will remind me on Sunday morning you mentioned at the beginning of the show rather than the end, because by now only our mothers are listening and they just call us with their questions and they just send us emails.

1:08:07So thanks for listening, Mum. Thanks, Andrew and Mum, for listening as well. Mum knows better than most not to open a certain cans of worms. She's not asking. There's a whole bunch of topics that are... And you can see at family gatherings where someone will sort of mention it. She just looks up and is like, you know, does the throat thing like, no, no, no, no, no. don't get him started I am now supposing that in the page extended family there's a WhatsApp group that probably doesn't include you which has a list of things that you can't actually bring don't mention the Reserve Bank don't mention rates don't mention Bitcoin what else is on the rant list it's a long list it's a long list kids these days and then hold that thought because maybe we'll get a question about something you are passionate about on Sunday maybe not I'll have to wait and see until then full on Cheers.