Latest / What the Flux / ATO takes on Big Tech | Virgin & Qatar hearing wedding bells | Uber's subscription battle

Transcript

ATO takes on Big Tech | Virgin & Qatar hearing wedding bells | Uber's subscription battle · What the Flux

• 0:05
  Speaker 1: Fierce is what the Flux.
• 0:06
  Speaker 2: I'm Brett and justin app Monday, the tewond of December,
• 0:09
  Speaker 2: j boy.
• 0:10
  Speaker 1: The number of young Australians taking out private health insurance
• 0:13
  Speaker 1: has reached a record high in the September quarter. According
• 0:16
  Speaker 1: to APRI, more than fifteen million Aussies now have some
• 0:19
  Speaker 1: form of private health insurance and the main driver ossies
• 0:22
  Speaker 1: in their twenties taking out hospital cover used for mental
• 0:25
  Speaker 1: health treatment.
• 0:26
  Speaker 2: You seeing that flex a well somemer may mean music festivals,
• 0:29
  Speaker 2: Christmas parties and maybe a future many babies. It can
• 0:32
  Speaker 2: also mean antent gent to our bank account. And as
• 0:35
  Speaker 2: we've reached the silly season, this month's Academy is the
• 0:37
  Speaker 2: perfect way to navigate the ins and outs and what
• 0:40
  Speaker 2: to do this silly season. To make sure to download
• 0:42
  Speaker 2: the Flux app and check out the brand new.
• 0:44
  Speaker 1: Academy three Ominous Stories today, Jesi boy, Let's do it
• 0:48
  Speaker 1: for our first, the Australian government has green lit new
• 0:52
  Speaker 1: legislation that will force multinational companies like Netflix, Apple and
• 0:56
  Speaker 1: Microsoft to pay a minimum of fifteen percent tax better.
• 0:59
  Speaker 2: Than what they're paying out man, So tell me a
• 1:01
  Speaker 2: little bit.
• 1:01
  Speaker 1: More, well, Juzi boy, we know that the big dogs
• 1:04
  Speaker 1: of tech have been on ossie shaws for a very
• 1:06
  Speaker 1: long time.
• 1:07
  Speaker 2: Now. Yeah, Apples, yea, Amazon's in, Netflix, your, Microsoft's. The
• 1:09
  Speaker 2: list goes on.
• 1:10
  Speaker 1: And while we may love their products, the Australian tax
• 1:13
  Speaker 1: officer doesn't have the warmest feelings towards them.
• 1:16
  Speaker 2: That's because many of the major tech companies haven't been
• 1:18
  Speaker 2: paying taxes proportional to the profit that they're pocketing in Australia.
• 1:21
  Speaker 1: In fact, Jasi Boy, in the twenty twenty three financial year,
• 1:24
  Speaker 1: many large tech companies did not pay tax in Australia at.
• 1:27
  Speaker 2: All, companies like Netflix, Canva and even Sony.
• 1:30
  Speaker 1: So late last week, the Australian government joined more than
• 1:33
  Speaker 1: one hundred and thirty five other countries to apply a
• 1:36
  Speaker 1: global minimum tax of fifteen percent. And what does this
• 1:39
  Speaker 1: actually mean, I'm glad you asked, Jusi Boy. It means
• 1:41
  Speaker 1: that a company with more than one point two billion
• 1:44
  Speaker 1: dollars in global revenue they need to pay at least
• 1:47
  Speaker 1: fifteen percent tax across their global operation.
• 1:49
  Speaker 2: And that means it can't start profit shifting money from
• 1:52
  Speaker 2: Australia to Ireland, to the Cayman Islands and beyond.
• 1:55
  Speaker 1: And the goal in Australia is that multinational companies pay
• 1:58
  Speaker 1: a fair amount of tax for the revenue earned in
• 2:01
  Speaker 1: our country.
• 2:01
  Speaker 2: So what is the key learning here.
• 2:03
  Speaker 1: It's time for the world's biggest companies to pay tax
• 2:06
  Speaker 1: in the countries where they make money.
• 2:08
  Speaker 2: You see, Beman, major tech companies have been using very
• 2:11
  Speaker 2: sophisticated accounting to minimize their tax in Australia.
• 2:14
  Speaker 1: Because Australia's thirty percent corporate tax rate is one of
• 2:16
  Speaker 1: the highest in the world.
• 2:17
  Speaker 2: And how do these tech companies do.
• 2:19
  Speaker 1: This, Jollie Boyd's pretty simple. They keep a physical presence
• 2:22
  Speaker 1: in tax effective countries like becam An Islands, or like
• 2:25
  Speaker 1: Ireland and be Man.
• 2:27
  Speaker 2: You can see, for example, in the twenty twenty three
• 2:29
  Speaker 2: financial year, Apple made more than twelve billion dollars in
• 2:31
  Speaker 2: income in Australia.
• 2:33
  Speaker 1: But if I look over here, it only paid one
• 2:35
  Speaker 1: hundred and forty two million dollars in tax, which is
• 2:37
  Speaker 1: just over one percent of earnings.
• 2:39
  Speaker 2: So be man in. This new legislation, which passed in
• 2:41
  Speaker 2: Australia and more than one hundred other countries, means that
• 2:43
  Speaker 2: major tech companies will need to.
• 2:45
  Speaker 1: Cough it up if they want to operate in these countries.
• 2:48
  Speaker 2: And the man at once. In effect, this could have
• 2:49
  Speaker 2: a huge impact on the profits of these massive companies.
• 2:53
  Speaker 1: Which could spell some bad news for Wall Street.
• 2:56
  Speaker 2: For our second story, Vergin Australia is one step closer
• 2:59
  Speaker 2: to finalizing its partnership with Qatar Airways after the A
• 3:03
  Speaker 2: Triple C gave it the all clear to start selling
• 3:05
  Speaker 2: flights together.
• 3:06
  Speaker 1: Definitely not what Quani wants to hear, Juzzy boy, tell
• 3:10
  Speaker 1: me more.
• 3:10
  Speaker 2: Okay, So, Virgin Australia is the ouzsie airline that launched
• 3:13
  Speaker 2: back in two thousand as at Virgin Blue, then rebranded
• 3:15
  Speaker 2: to Virgin Australia in twenty eleven, but went bust during
• 3:19
  Speaker 2: COVID and just when Quantus thought it had the airline
• 3:21
  Speaker 2: market all to itself, Virgin Australia ruse like a phoenix
• 3:24
  Speaker 2: out of the ashes. Now, Josie boy, you may remember
• 3:26
  Speaker 2: when we spoke about Qatar Airways plans to buy a
• 3:28
  Speaker 2: twenty five percent stake in Virgin Australia. I do, and
• 3:31
  Speaker 2: it was subject to the A Tribra C and verbs approval. Yep.
• 3:35
  Speaker 1: But now Virgin Australia and Qatar have taken one step
• 3:38
  Speaker 1: closer to formalizing this marriage.
• 3:40
  Speaker 2: Yeah, the a Triple c's given Virgin Australia the green
• 3:43
  Speaker 2: light to start selling tickets on Qatar Airways operated flights
• 3:46
  Speaker 2: from Australia.
• 3:47
  Speaker 1: This means that Qatar Airways will effectively double its flights
• 3:50
  Speaker 1: in and out of Australia from June twenty twenty five.
• 3:53
  Speaker 2: Meaning more competition on international routes.
• 3:56
  Speaker 1: But hold your horses right there, Jouzzy boy, not one
• 3:58
  Speaker 1: step further, because this is just an interim authorization by
• 4:01
  Speaker 1: the Atriple C YEP, the.
• 4:03
  Speaker 2: Atriable See and Foreign Investment Review Board won't make a
• 4:06
  Speaker 2: final decision until March or April next year.
• 4:08
  Speaker 1: And no surprises here, Quantus is digging in its heels
• 4:12
  Speaker 1: to try and stop this deal from taking place.
• 4:15
  Speaker 2: So what is the key learning here?
• 4:16
  Speaker 1: More airline capacity typically means more competition and therefore lower airfares.
• 4:21
  Speaker 2: It all comes down to the basics of supply and demand.
• 4:24
  Speaker 1: Now, this new Qatar Virgin deal will mean there is
• 4:26
  Speaker 1: more than fourteen hundred new seats available each day from
• 4:30
  Speaker 1: Australia to somewhere overseas.
• 4:32
  Speaker 2: And according to Virgin, Australian airfares to Europe have jumped
• 4:34
  Speaker 2: more than forty percent, since COVID and I can confirm, so.
• 4:38
  Speaker 1: Jazzy Boy having more capacity means that airlines need to
• 4:41
  Speaker 1: be more competitive on prices.
• 4:42
  Speaker 2: But here's the thing, be Man. Qatar can reduce its
• 4:45
  Speaker 2: airfares a lot more than Quantus can. Why is that
• 4:48
  Speaker 2: largely because qatar airways labor costs are estimated to be
• 4:52
  Speaker 2: about a third of quantuses.
• 4:53
  Speaker 1: Wow, that's because of different industrial relation agreements.
• 4:56
  Speaker 2: So while Katar always may introduce new flights and lower
• 4:59
  Speaker 2: the airfares, what kind of as a price for And.
• 5:02
  Speaker 1: That is why they so fiercely are against this new partnership.
• 5:06
  Speaker 2: For our third and final story, Uber is under investigation
• 5:10
  Speaker 2: in the US for making it subscription service Uber one
• 5:13
  Speaker 2: too hard to cancel.
• 5:14
  Speaker 1: The typical story, too easy to sign up, too hard
• 5:17
  Speaker 1: to cancel? What is going on here?
• 5:20
  Speaker 2: So we want to know Uber the heavily funded now
• 5:22
  Speaker 2: nasdek listed a ride sharing app.
• 5:24
  Speaker 1: Founded in two thousand and nine and has grown to
• 5:26
  Speaker 1: over seventy five million active users around the world. But juzzboy.
• 5:29
  Speaker 1: Now Uber is in hot water once again, this time
• 5:32
  Speaker 1: with the US Federal Trade Commission, which is kind of
• 5:35
  Speaker 1: like the ariple c here in Australia.
• 5:36
  Speaker 2: Yeah, the FTC is investigating Uber's subscription one service, Uber one. Yep.
• 5:41
  Speaker 1: They try and understand a little bit more about the
• 5:43
  Speaker 1: enrollment and cancelation processes of Uber one.
• 5:46
  Speaker 2: Because the thinking is that Uber makes it very easy
• 5:48
  Speaker 2: to sign up to Uber one, but not so easy
• 5:50
  Speaker 2: to cancel. Ah, the old negative option marketing, So what
• 5:55
  Speaker 2: is the key learning here? Negative option marketing is a
• 5:57
  Speaker 2: strategy where a customer's inaction is considered consent to be
• 6:01
  Speaker 2: charged for goods or services, and as a result, consumers
• 6:04
  Speaker 2: are automatically enrolled in the service and need to opt
• 6:07
  Speaker 2: out if they want to stop.
• 6:08
  Speaker 1: But doziboy. Here's the issue. Some companies create intentionally difficult
• 6:12
  Speaker 1: cancelation flows.
• 6:13
  Speaker 2: The idea is that it traps people into paying for
• 6:16
  Speaker 2: something just because they didn't know how to cancel and
• 6:18
  Speaker 2: does a boy.
• 6:19
  Speaker 1: Uber isn't the first company to do this, Nope.
• 6:21
  Speaker 2: The FDCs recently sued Amazon and Adobe for allegedly making
• 6:25
  Speaker 2: it too difficult to cancel subscriptions as well. And given
• 6:28
  Speaker 2: the revenue from Uber One's membership fees are in excess
• 6:30
  Speaker 2: of one billion dollar run rate, this could be very
• 6:34
  Speaker 2: costly for Uber. Fusam as the silly season comes up
• 6:37
  Speaker 2: in summer with music festivals, Christmas parties, and a whole
• 6:40
  Speaker 2: lot of social activity. In the Academy this month, we
• 6:43
  Speaker 2: share all the best ways to still be responsible with
• 6:46
  Speaker 2: your money and have fun to make sure to download
• 6:48
  Speaker 2: the Flux app and check out the Academy this month.
• 6:50
  Speaker 1: Thanks for listening, and we'll see you on Wednesday.