On today's blog:
- How has the market received Medibank’s debut?
- This graph explains New Zealand’s sudden crusade to reverse its brain drain
- Twitter’s CFO appears to have accidentally tweeted his latest M&A battle plan
- Abbott is right: We need to have a serious discussion about the GST
- Medibank carves out a spot in Australian IPO history
- Interesting reads from around the web
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3.10pm - How has the market received Medibank’s debut?
With almost an hour until the market closes for the day, The Australian’s markets editor David Rogers recaps Medibank’s first day on the ASX and discusses whether the stock is overvalued.
2.20pm- This graph explains New Zealand’s sudden crusade to reverse its brain drain
As we mentioned in our links earlier today, New Zealand is on a mission to reverse its brain drain across the Tasman and steal our top talent.
Crusade is an apt word for its plan. It’s holding a country-wide career roadshow that has already swept through Perth and is set to hit Sydney next weekend, and will stop over in Melbourne and Brisbane next year.
But why now? Why this sudden push to take our talent? It’s all a play to capitalise on an existing trend. As the graph below shows, for the first time in a long time, net migration from Australia to New Zealand has overtaken migration from New Zealand to Australia.
11.40am - Twitter’s CFO appears to have accidentally tweeted his latest M&A battle plan
It looks as if Twitter’s chief financial officer Anthony Noto accidentally announced the company’s intention to buy another firm on Twitter. Thanks to this tweet, we can only guess the company is planning to buy something, although the name of its target remains unknown.
Looks like Twitter’s CFO just had the first-ever M&A DM fail. pic.twitter.com/AuLxVOBJED— Kevin Roose (@kevinroose) November 24, 2014
Why would an executive write this on Twitter? It’s likely it wasn’t intentional.
For those not familiar with the platform, Twitter allows you to send tweets (a public message) and direct messages (a private message to a follower). Given it’s now missing from his profile page; it would appear that Noto’s update was supposed to be a direct message, but he tweeted it instead.
Twitter’s most recent acquisitions include mobile ad firm Namo Media (which it bought for $US50 million in June), payment firm Tap Commerce and password security outfit Mitro. The last two were purchased for an undisclosed amount.
11.10am - Abbott is right: We need to have a serious discussion about the GST
"No increase to the GST." Is this yet another promise Abbott needs to break?
Earlier this year, Prime Minister Tony Abbott called for a “mature debate” on the GST. His argument was that every time tax reform gets brought up in Parliament, it turns into a “screaming match” in the lower house.
This columnist doesn’t always see eye to eye with Abbott, but in this case he’s right.
Last night, on the final episode of Q&A for the year, we saw an example of exactly what happens when the idea of altering the GST is raised in a public forum. It triggers outrage. In this case it was on Twitter.
#qanda Why is it GST increases that's argued for? Why not income tax? Tax on non-earned income hurts people less.— Andrew Rollason (@rollo75) November 24, 2014
#qanda a Robin Hood tax - tiny tax on speculative economy- would b much better than hiking GST. Tax those reaping billions & not little guy— Judith Kiejda (@JudithKiejda) November 24, 2014
This is despite a much more 'mature' conversation taking place on the show. It was interesting that ABC presenters Waleed Aly and Amanda Vanstone -- who are apparently on opposite sides of the political spectrum -- agreed that we at least need to discuss the idea of GST reform if we expect the government to continue (or perhaps even increase) funding to the ABC.
The immediate reaction from Twitter was to blame the tax-avoidance tactics of the big end of town. It’s a fair response given the recent revelations around the scale of corporate profit-shifting in Australia.
However, the Grattan Institute’s John Daley argues that this view fails to consider the scale of the problem.
According to Daley, tackling corporate profit shifting could contribute an extra $2bn to $3bn to the government’s coffers each year. Meanwhile, broadening the GST to include fresh food and private spending on health and education could raise up to $13bn over the same period. He adds that raising the overall GST to 12 per cent could bring in an extra $13bn per year.
Daley adds it's important that the government tackles the matter of corporate tax mitigation to encourage 'fairness' in the tax system.
Merrill Lynch chief economist Saul Eslake agrees with Daley, adding that no tax change should be considered in isolation from Australia's broader tax framework. He says that all GST changes should be considered alongside progressive tax breaks and incentives to ensure that lower income earners are protected from the changes.
Eslake also said there is no excuse for Australia’s inability to have a dignified tax debate, especially given New Zealand’s example. John Key’s conservative National Party claimed a higher majority in last year’s election despite broadening the scope and raising the rate of New Zealand's GST. To further illustrate Eslake's point, Key's government also lowered income taxes.
So, Abbott is right about the need for a GST debate -- one that considers all the options and doesn’t merely focus on one tax change. But does he have the political conviction to make it happen?
10.50am - Medibank carves out a spot in Australian IPO history
By Chris Kohler, BusinessNow
Today’s $5.7 billion Medibank Private debut marks the largest Australian IPO since Telstra hit the ASX in 1997, according to Dealogic.
Here are some other facts about this year’s most anticipated float:
It is the third-largest IPO in the world this year, behind Alibaba ($US25bn) and National Commercial Bank ($US6bn).
It’s the largest insurance sector IPO in Asia Pacific since AIA Group’s $US20.5bn Hong Kong listing in October 2010 and the world’s fourth-largest IPO from the sector on record.
The IPO volume from Australian issuers stands at a record high of $15.7bn from 54 deals, eclipsing all previous full-year levels and accounting for 15 per cent of total IPO volume in the Asia-Pacific region in the year to date (compared with 7 per cent in 2013).
Top three IPOs by Australian issuers on record:
- Telstra Corp – $US10bn, November 1997
- Medibank Private – $US4.9bn, November 2014
- QR National – $US4.0bn, November 2010
9am - Interesting reads from around the web
A plan to fix New Zealand’s brain drain: Australia has taken its top talent and now New Zealand is going all out to lure them back.
Let the machine do all the work: Is the rise of automation in the workforce making humanity dumber?
A McExperiment with a side of fries: The global future of the McDonald’s brand now rests with the tests it's conducting in Australia.
Power struggle: How the web is shifting influence and gradually redefining what it means to be powerful.
The new Hunger Games flick is already a disappointment: It may be getting good reviews, but its box office take is far from pleasing.