Latest / What the Flux / ATO hits Big Tech haaard | Nike cut from the S&P 100 | Volkswagen to cut 50,000 jobs

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ATO hits Big Tech haaard | Nike cut from the S&P 100 | Volkswagen to cut 50,000 jobs · What the Flux

• 0:05
  Speaker 1: This is What The Flux, I'm Brett, and I'm Justin,
• 0:07
  Speaker 1: and it's Wednesday the 9th of September. We are back
• 0:10
  Speaker 1: Flux fam, good to be back on the mic with
• 0:12
  Speaker 1: you jazzy boy. Very good.
• 0:14
  Speaker 2: Now get this one, more Aussies are working multiple jobs,
• 0:16
  Speaker 2: with the percentage of people who have more than one
• 0:19
  Speaker 2: job rising to 6.9%.
• 0:20
  Speaker 1: Wow.
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  Speaker 2: That's the highest level ever recorded in Australia, and get
• 0:24
  Speaker 2: this one, there are now nearly 104,000 more multiple job
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  Speaker 2: holders than this time last year.
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  Speaker 1: Wow.
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  Speaker 2: One of the big reasons, wage growth is not keeping
• 0:32
  Speaker 2: up with inflation, so people need more than one job
• 0:35
  Speaker 2: to afford living costs.
• 0:36
  Speaker 1: Speaking of living costs, B-Man, and living within your means,
• 0:39
  Speaker 1: very pumped that the Flux budgeting tool now has a
• 0:41
  Speaker 1: spending limit tracker. That means you can say how much
• 0:44
  Speaker 1: you want to spend on different categories, and it tracks
• 0:46
  Speaker 1: it for you, shows you when you're getting close to 50%, 75%,
• 0:49
  Speaker 1: and hit the spending limit. It is the ultimate hack
• 0:52
  Speaker 1: to staying disciplined with your money. So make sure to
• 0:54
  Speaker 1: download the Flux app and check out the spend limit tracker.
• 0:56
  Speaker 1: Three brilliant stories today, Jazzy Boy. Let's do it.
• 0:59
  Speaker 2: For our first, the Australian tax office has ruled that Amazon, Google, Netflix,
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  Speaker 2: and other big tech giants need to pay extra tax
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  Speaker 2: in Australia, and this could cost them billions of dollars
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  Speaker 2: every year.
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  Speaker 1: Nothing certain, but death, taxes, and the ATO wanting its cut. Yep.
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  Speaker 1: So tell me more.
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  Speaker 2: Well, Jazzy Boy, here's the context. We know that big
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  Speaker 2: tech companies come to Australian shores and earn billions in
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  Speaker 2: revenue here.
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  Speaker 1: Who is not hooked on the latest Netflix show? Yep.
• 1:21
  Speaker 2: But once our hard-earned moolah hit these companies, a pretty
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  Speaker 2: big chunk of that money can end up heading overseas.
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  Speaker 1: Bon voyage, as they say. Yep. But how do these
• 1:29
  Speaker 1: companies do it? Well, they do this through internal service fees.
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  Speaker 1: That's essentially where the Australian arm pays the US parent
• 1:35
  Speaker 1: company for using their tech or brand. And those service
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  Speaker 1: fees get taxed very lightly compared to normal company profit.
• 1:40
  Speaker 1: Which is the whole point from the company's perspective. But
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  Speaker 1: according to the ATO's latest ruling, that shifting and swashling
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  Speaker 1: and swooshing... isn't actually a service fee, it's actually royalties.
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  Speaker 1: And that one little word could create one very large
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  Speaker 1: tax bill. So it seems as though the ATO has
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  Speaker 1: found a way to make some of that money rain
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  Speaker 1: back down in Australia. So what's the key learning here?
• 2:00
  Speaker 1: Calling a payment a royalty instead of a service fee
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  Speaker 1: Sounds like semantics, but it completely changes who gets paid first.
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  Speaker 2: A royalty is money paid for the right to use
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  Speaker 2: someone else's intellectual property, like a copyright or a trademark
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  Speaker 2: or software code.
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  Speaker 1: So if the ATO says your Netflix fee is partly
• 2:16
  Speaker 1: a royalty, they can tax it before it even leaves
• 2:19
  Speaker 1: the country.
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  Speaker 2: That's different to a normal service fee, which usually only
• 2:22
  Speaker 2: gets taxed on the profit left over.
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  Speaker 1: Not the whole payment. Get this one, Jazzy Boy.
• 2:25
  Speaker 2: Google and Meta transferred almost $ 11 billion offshore in 2025
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  Speaker 2: as service fees.
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  Speaker 1: And as a result, they paid just $ 140 million in
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  Speaker 1: tax on it.
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  Speaker 2: So we're not talking about someone claiming a cheeky $ 14
• 2:36
  Speaker 2: Uber Eats order on expenses here.
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  Speaker 1: We are talking billions. Which means you can expect big techs, accountants,
• 2:41
  Speaker 1: tax lawyers, and probably several forests worth of legal documents
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  Speaker 1: to get involved.
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  Speaker 2: For our second story, Nike has been dropped from the
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  Speaker 2: S & P 100 after losing 76% of its market cap.
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  Speaker 1: Looks like Nike got the boot, B-Man. Yes. Because it
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  Speaker 1: didn't sell enough of its own. Yeah. Tell me more.
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  Speaker 2: Well, Jazzy Boy, we know Nike is the sportswear brand
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  Speaker 2: known for its iconic runners.
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  Speaker 1: Mm-hmm. And sportswear and sports gear. It was originally called
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  Speaker 1: Blue Ribbon Sports back in 1964 before rebranding to the
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  Speaker 1: name we all know today Nike in 1971. And that
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  Speaker 1: Nike name actually came from the ancient Greek goddess of victory.
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  Speaker 1: In 2008, B-Man, Nike was listed on the S &
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  Speaker 1: P 100. That's the index that tracks the 100 largest
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  Speaker 1: companies in the US. But lately, Nike has been anything but.
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  Speaker 1: but victorious. Yep.
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  Speaker 2: Five years ago, Nike shares hit a record high of
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  Speaker 2: around 179 US bucks. But on Monday this week, Nike
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  Speaker 2: shares were sitting at just $ 38.
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  Speaker 1: 40. Down roughly $ 230 billion US dollars from its market
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  Speaker 1: cap peak in 2021. Not exactly screaming top US company. No.
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  Speaker 1: So now the Dow Jones indices didn't think so either.
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  Speaker 1: They've announced that from September, Nike will be dropped from
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  Speaker 1: the S & P 100. And what led to this downfall? Well,
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  Speaker 1: many analysts believe this stems back to Nike pulling its
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  Speaker 1: products from hundreds of stores that were selling its shoes
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  Speaker 1: back in 2020 to focus on more profitable direct sales.
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  Speaker 1: Direct sales technically earn more per shoe, but it turns
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  Speaker 1: out it costs Nike something far more valuable. Ooh, so
• 4:02
  Speaker 1: what's the key learning here? When you abandon retail and
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  Speaker 1: distribution partnerships, you leave the door wide open to competition
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  Speaker 1: filling your void.
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  Speaker 2: Jazzy boy, we know that going direct to consumer can
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  Speaker 2: win you some profit margin.
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  Speaker 1: Yeah, but the shelf you walk away from won't stay
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  Speaker 1: empty for long. Get this one.
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  Speaker 2: In 2017, Nike made up 75% of Foot Locker's total revenue.
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  Speaker 2: So when they pulled their sneakers out of Foot Locker
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  Speaker 2: stores to go direct, Foot Locker had to find other
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  Speaker 2: brands to fill the massive gap.
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  Speaker 1: Enter sportswear competitors, including On Running and Hocker. On and
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  Speaker 1: Hocker's combined revenue in 2017 was around $ 680 million. Oh no.
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  Speaker 1: But it grew to $ 3. 2 billion in 2025 since filling
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  Speaker 1: the retail space left behind by Nike. You're saying it's
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  Speaker 1: all because of Foot Locker? Yeah. The customer walked in
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  Speaker 1: looking for Nike and walked away in someone else's shoe.
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  Speaker 1: And this is clearly hitting Nike's top line numbers, their
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  Speaker 1: share price, and its reputation as a top 100 US
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  Speaker 1: public company. For our third and final story, Volkswagen's board
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  Speaker 1: has signed off on 50,000 job cuts and is halving
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  Speaker 1: its car models over the next nine years. Volkswagen's seriously
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  Speaker 1: hitting the brakes here, B-Man. So tell me more. Well,
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  Speaker 1: we know Volkswagen is Europe's largest car maker. We're talking
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  Speaker 1: the owner of Volkswagen, Audi, Porsche, Skoda, the lot. And
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  Speaker 1: with all those car brands, they employ hundreds of thousands
• 5:14
  Speaker 1: of people globally. But now, B-Man, the Volkswagen board has
• 5:16
  Speaker 1: just unveiled a big new plan called Future Plan. Sounds
• 5:20
  Speaker 1: quite futuristic. It sounds that way. But it's really just
• 5:23
  Speaker 1: a bold plan to cut 50,000 additional job cuts to
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  Speaker 1: the ones already promised back in late 2024.
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  Speaker 2: Plus, they're cutting up to 50% of their car model lineup...
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  Speaker 2: by 2035.
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  Speaker 1: And why are they doing this? Well, VW says it
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  Speaker 1: has 500,000 vehicles worth of excess capacity sitting idle in
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  Speaker 1: Europe right now. And off the back of this news,
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  Speaker 1: VW's US shares jumped 9%, which is the biggest jump
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  Speaker 1: since March of 2023. Wow. So what is the key
• 5:47
  Speaker 1: learning here?
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  Speaker 2: You can build the best product in the world and
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  Speaker 2: you can still get close to going broke if you
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  Speaker 2: built too much of that product.
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  Speaker 1: It's all about matching supply and demand, which means only
• 5:55
  Speaker 1: producing what the market will actually buy. Not what your
• 5:58
  Speaker 1: factories are capable of creating. And B-Man, that's VW's exact
• 6:01
  Speaker 1: problem right now. They've got 500,000 vehicles worth of spare
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  Speaker 1: European capacity. But the demand has gone somewhere else. And
• 6:08
  Speaker 1: that somewhere else, B-Man, has a name. It does. It
• 6:10
  Speaker 1: is called China. Yep.
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  Speaker 2: Chinese auto exports hit a record of 5 million units
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  Speaker 2: in just the first half of 2026.
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  Speaker 1: We're talking Geely, Cherry, BYD, Zika, and many more names
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  Speaker 1: that I can't even pronounce. Yep. China's now the world's
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  Speaker 1: largest vehicle exporter, full stop. In Europe, Chinese brands gained 9.5%
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  Speaker 1: of the new car market in the first half of 2026.
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  Speaker 1: And that's nearly double the 5% they held a year earlier.
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  Speaker 2: So, B-Man, VW isn't just cutting because sales are soft. Now,
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  Speaker 2: it's cutting because someone else is now making the cars
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  Speaker 2: that Europeans really want to buy.
• 6:41
  Speaker 1: Good to be back on the air with you, B-Man. Now,
• 6:43
  Speaker 1: Flux Sam, if you are feeling a bit of that
• 6:44
  Speaker 1: cost-of-living pinch, the Flux budgeting tool is the home of
• 6:47
  Speaker 1: spend limits. So make sure to track your spending in
• 6:50
  Speaker 1: the Flux app with the Flux budgeting tool. Thanks for listening,
• 6:52
  Speaker 1: and we'll see you on Friday.