Business Weekend | 24 May

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[00:00:01]This is Business Weekend with Ross Greenwood.

[00:00:06]>> Hi there and welcome to Business Weekend. I'm Ross Greenwood. It is great to have your company here today. Coming up on the program, the budget promised the biggest shake up the tax laws in more than two decades. But the blowback on the government and unintended consequences is now causing second thoughts. And the criticism this week came from quarters the government it didn't expect it to especially younger women in business.

[00:00:32]>> I wouldn't expect anything less from Jim Charas. He's never owned a business. He has a lack of understanding. He's made a slap dash decision on throwing this in while trying to solve poverty. Um and I just think that you know it made us all very very angry.

[00:00:46]This week's surprise rise in the unemployment rate and the tax changes in the budget raise an important question about where and how the government expects to grow our economy without creating inflation and higher interest rates. We speak with HSBC chief economist Paul Bloxom.

[00:01:03]>> Two years ahead, they think the economy will still be growing sub 1.5%. That is the lowest forecast the RBA has ever had. and driverless vehicles and cheap Chinese cars are changing the economic model for car ownership and as people question the value of premium brands. So we meet a San Francisco based entrepreneur whose business Turo takes car ownership to more of an Airbnb model.

[00:01:29]>> Now we have many hosts on our app that have multi-million dollar businesses that they built on top of our platforms.

[00:01:37]Plus, we'll speak with David Williams, who months after being rejected by shareholders in the artificial skin company Polyovo, is back with a cancer fighting ASX listed company. This time, it's personal interest and more than just stocks and shares.

[00:01:56]But of course, we can't help but start with the consequences of the federal budget. The problem for the government is that it lost control of the narrative far from being seen to help young people into housing and the prime minister and treasurer were quickly fighting a rear guard defense of the capital gains tax changes with younger people who questioned capital gains tax on nonpropy related businesses and investments. The key quote about intergenerational fairness was quickly dispensed with by the government and the treasurer. We understand that some of these changes of contentious are contentious. Of course they are. We anticipated that. We anticipated our political opponents engaging in the usual scare campaigns built built on lies. Lies indeed. But the question is whether the lie was originally changing those policies.

[00:02:45]We'll get into detail on that later. But in the meantime, I want to go to something that was missing in this year's budget. Growth. Economic growth.

[00:02:53]The government forecast only modest projections for economic growth. Two and a quarter% this year, 1 and 3/4% next year. The two and a half two and a quarter 2 and a half 2 and a half% after that. The long-term average though in Australia is around 3 and a/4%. But government spending though is growing 4 1/2% this year, 5.9% the previous year.

[00:03:15]You can see the problem. Despite its claims of restraint, the government has to cut harder, much much harder, or to get the economy to grow faster if the debts and deficits are not to mount. We also have to trust the government and Treasury that savings to schemes, including the NDIS, actually come to fruition and they haven't proven that yet. So, let's get to that growth part of the equation with HSBC's chief economist in Australia, Paul Bloxom, a former Reserve Bank economist. Paul, many thanks for your time.

[00:03:46]>> Great to be here.

[00:03:47]>> Where's the growth?

[00:03:48]>> Well, I'd add one more number to your set of numbers, and that's the number that the RBA for published at the early part of this month. And that was in their statement. They said they don't think the economy is going to grow any faster than 1.4% by the middle of 2028. So, two years ahead, they think the economy will still be growing sub 1.5%. That is the lowest forecast the RBA has ever had at the end of its forecast in the 36 years it's been publishing forecasts. So, you know, if you take the independent central bank's view on where growth is, it's even lower than you say. And I think that is as as you point out, I think the missing element. The budget needed to focus a lot more ideally on doing the sorts of things we need to do, the reforms we need to do to grow to be able to grow the economy faster. You've got to focus on growing the pie and and and their growth rates, as you say, are well below historical averages. And the RBA's one is a long is is even further below that. And and what we're talking about, and we should explain this to people, 1.4% 2.4%. The difference is literally $10 billion in the budget each year, which if it doesn't come to fruition, ends up just being racked onto the onto the national debt.

[00:04:54]>> Well, that's right. But I I think the main thing is this. We've got to now is the opportunity. Now is the time, if it wasn't last year, but h perhaps during the election, which I talked about a lot back then as well, to aim at doing the sorts of reforms that will lift the speed limit of the Australian economy.

[00:05:08]At the moment, uh, we're exceeding that speed limit as we know. Uh, growth is running faster than is sustainable. A reflection of that is that, uh, we've seen an a rise in inflation and the RBA has had to lift interest rates three times. They're forcing the economy into a downturn to get inflation back down primarily because the economy can't grow as fast as it used to. And so all the policy tools for fixing that problem, for dealing with that challenge, are in the hands of the fiscal policy makers, federal and state government fiscal policy meas uh makers. And so this ought to this this is the thing that needs to be focused on at the moment. Lifting the speed limit for the Australian economy.

[00:05:44]>> There's some weird irony in this and that is if the government's changes to capital gains tax negative gearing causes home prices to fall. There's been a lot of chat about that. We'll talk about that during the course of the program. But the fact of the matter is that slows the economy marketkedly because so many people's consumer confidence and therefore spending habits are based on the value of their home. So that's one factor I think that's going to mean that the RBA actually is going to look at and say well this is going to potentially contribute on the margin to slowing the economy more putting more downward pressure on demand dealing with some of the challenges they face but I think the deeper issue is we need to do stuff that actually makes the economy more efficient and so when we look at tax and the tax changes that there's been a lot of tax changes and a lot of uh you know discussion about them but actually they don't really make the tax system more efficient. what we want. We know we have to have a larger tax system because the commitments the government's making to spending are higher than they've been in the past. And so we know we need to find that tax revenue in the most efficient way possible. We want the tax system to deliver it in a way that's efficient and we've got high personal income tax rates and high corporate tax rates and we don't make use of the more efficient taxes like the GST in the same sort of way that they do across the rest of the world. So, and it's interesting you say that because I've long said that if the argument and Paul Keading picked up on this was to take the onus off the individual taxpayer to actually put it onto to capital through the capital gains tax changes. And I go, well, okay, fair enough. But the missing link there is consumption taxes. That's the big area where you could bring down uh personal income taxes, where you could bring down corporate taxes and even a lot of those arguments about trust versus companies, whatever it might be, kind of disappear if you can bring those personal tax rates down. So I wonder whether that productivity commission report that was rejected by the prime minister of a 5% tax on company revenues whether that sits smoldering in the background for the government to consider a way to be able to tax consumption without having to give that money to the states.

[00:07:41]>> I think that what we need to sit back and think about is what we're trying to achieve. What we're trying to achieve is we're trying to get more participation in the labor market and we're trying to get more investment from businesses because those are the things that lead to productivity. You know the three Ps, population, participation uh and and productivity and we need to focus on those. So you need the tax system to be encouraging the things you want. If you have high personal income tax rate it rates it discourages participation in the labor market clearly. If you have high corporate tax rates, it discourages investment by firms. And so you need to move away from that being the largest part and the fastest growing a fast growing part of the tax system towards more efficient taxes like the GST.

[00:08:20]Resource rent taxes are not an unreasonable consideration either. These are more efficient taxes. But this wasn't done in the budget. And the challenge that we have is we're not aiming at the things that make the economy more efficient or lift productivity and productivity is still looking pretty dismal. I mean you look at the average over the past 10 years it's running at 0.3 and it's still running at about that rate. 1.2 too it used to run at in the previous decade prior to that. I think you know we need to aim at this more clearly.

[00:08:46]>> So is this really about Australia trying to concentrate in a large sense on energy prices on tax rates and on wages?

[00:08:53]These are the three things that make Australia competitive or uncompetitive in a local and global environment. If we could concentrate on trying to keep those things under control or competitive in global terms, we would make the nation more productive and we would probably make the nation more competitive.

[00:09:11]>> I describe the Australian economy at the moment as supply constraint. I say look, we would like to grow faster. We have a lot of ambition, but we can't actually grow any faster. We've hit our limits and I think the two key things that we really don't have, we have in limited supply are housing supply. So, we need to do something about that. And that's not going to get fixed with the tax changes that have been moved been made.

[00:09:30]It's going to be fixed by focusing on the supply side. Can we build more housing? That's going to be the fundamental. And the other one is cheap energy. I mean, we are a huge exporter of energy to the rest of the world, but we don't have enough cheap energy for ourselves. And of course, cheap energy and housing supply. You move those move those along and and you get more supply.

[00:09:48]That'll help. And the way you get there is by making the tax system more efficient. looking at the regulatory environment so that it doesn't constrain businesses from making business investment decisions and and these are the sorts of things that really need to be more of a focus.

[00:10:01]>> Okay. So, could I take you to then Angus Taylor's proposal that we index the tax scales? A lot of people have talked about this and where it should be indexed, how it should be indexed. I notice Lucy Ellis for example is indicating the Westpak chief economist, former um deputy governor of the Reserve Bank that it should be set at 2 a.5% and not at the inflation rate to put discipline on government during times of low inflation and higher inflation.

[00:10:24]What's your own sense about indexing those tax cuts?

[00:10:27]>> I think the fundamental point here is that we need to make sure that the tax system doesn't continue to move in a more efficient inefficient direction. So we don't we don't want to get more and more and more of our tax revenue from an inefficient part of the tax system like the income tax system or the corporate tax system and we need to start pivoting it more towards the more efficient taxes. How you go about doing that?

[00:10:46]There are lots of different ways of doing it, lots of different choices you can make. But the point I'm making is that we haven't really seen that in the form of the announcements we've seen so far to adjust the tax system.

[00:10:56]>> Okay, just one last quick one. Given where Australia sits and the trajectory we've got, make a picture of what it looks like in 20, 30 years time if we keep going on this trajectory. Are we richer? Are we poorer? Are we really able to afford all of the the social welfare reforms that we've got there? What do we look like?

[00:11:16]>> Well, see, the main thing for me and and these long-term forecasts are really tricky, but but the main thing I would say is this is that I think Australia has abundant opportunities to grow this economy. We're a continent with lots of resources. We're tied to Asia, the fastest and most dynamic growing region on the planet. And the thing that's standing in the way is all of the is the regulatory environment, an inefficient tax system, is not enough competition.

[00:11:37]All of these things combined to mean that we can't grow this economy at the moment faster than 2%, maybe a little less than 2% before we hit our limits.

[00:11:44]And so to me, we need to focus on removing those constraints because there are lots of opportunities to grow. I would hope that at some point we do remove these constraints and in 20 or 30 years time we're taking better advantage of the opportunities that we have >> and there is a challenge for government.

[00:11:58]Paul Bloxom many thanks for your time as always.

[00:12:01]Now as I said earlier the government lost control of the narrative when trying to sell its budget and things only got worse this week. Open letters were written by young business entrepreneurs separately also by young women business founders. Genevieve Torman Campbell is the founder and chief executive of the communications and marketing company Mint Partners. She's one who signed one of those open letters. I spoke with her earlier about the catalyst that triggered it.

[00:12:28]>> We were all sort of complaining and concerned talking to each other over the last couple of weeks since the government announcement. Um and over a coffee decided yesterday that we actually should do something about it and have our voices heard. Um it was a spontaneous thing um which we're very glad that we've done in order to get government to rethink uh this uh this policy change.

[00:12:52]>> Okay. Tell me about the coffee chat.

[00:12:54]What was that like? Because you know generally those coffee chats can start something but there must have been something that bound the people together that made you realize you basically had well shall I say a common grievance.

[00:13:08]>> Absolutely. Look, I have a lot of friends who have their own businesses.

[00:13:13]We're all working mothers. We've started our businesses from the ground up. We've worked very hard um juggling our businesses with young families. Um and what we realized is that this change doesn't just affect big businesses. It affects businesses from $2 million turnover and up. And this was going to have a major impact on the hard work that we have put in over the last 20 or so years of you know of employing people contributing to the Australian economy um and building these businesses which we which we all love.

[00:13:45]>> So the interesting part about this was there any sort of politics that bound these people together? Is it you know again could the argument be oh well this is a political campaign or or was it something more grassroots than that?

[00:13:58]>> No it's very much about women in business. I'm very passionate about um you know women in business. A lot of my clients um have started businesses from the ground up. I think something that is really common for women in business is that we start with a very low or no cost base. So in terms of this CGT change, it will affect people like us more so than big business startups. And there's a couple of things here because with the tax scales um of course you can very rapidly ramp up towards that 40% 45% plus if you sell a business for a profit. Now certainly existing businesses can be quarantined. But the reality is also even the the minimum tax of 30% does have an impact on businesses which are being sold to try and help in the future make your your your family more prosperous as it were.

[00:14:50]>> Absolutely. Yes, it it does. And um I think it's a major disincentive for women to take a chance and go and start their own business. Um you know, adding to the productivity of this nation, you know, so I I don't understand why um people that are driving things forward are now being penalized by this government.

[00:15:09]>> Okay. So, one thing that I've been talking about this this week is really all about the fact that if you go to work as an employee, you're pretty much guaranteed your wage. But if you are a business owner and you create a business, you are not guaranteed success. And that's the reason why a person who goes into business for themselves with their own capital needs some incentive which is greater than paying the same taxes that PAG taxpayers would pay. Is that part of the coffee table conversation?

[00:15:42]>> Oh gosh, it's every morning or every time that we catch up, you know, the highs and lows of running businesses.

[00:15:48]You do have moments when you're riding high, but equally there's times that it is so tough and you wonder why you've done it in the first place. So there has to be some incentive to taking that chance and not having that security of a you know a weekly or monthly paycheck.

[00:16:03]>> Okay? And that's the real issue of this because ultimately if you are successful you do sell at a profit, you would be taxed as though you are an ordinary taxpayer. Then it goes to something else and that is if your business grows, you employ people. They pay tax, you pay tax, the country grows as a whole. It's not government that grows the economy.

[00:16:25]It's businesses such as yours and the other cohort of people who have signed this position to the or this this open letter to the government.

[00:16:33]>> Absolutely. And I really think that this is something that this Labor government has forgotten. there seems to be um you know a misunderstanding or lack of consultation um with business owners across the board, not just tech startups, which I know that now they say they're doing, with everybody. Um and and that's a that's a major issue. I don't understand why this government wants to punish people in business when we're the ones driving the economy forward.

[00:17:00]>> So Genevie, you've been in communications and basically public imaging for a long time for businesses and individuals. this week when you heard the treasurer saying that criticism such as yours and this groups is based on a foundation of lies and misinformation. What was your reaction to that?

[00:17:19]>> Oh, look, I wouldn't expect anything less from Jim Charas. He's never owned a business. He has a lack of understanding. He's made a slap dash decision on throwing this in while trying to solve property. Um, and I just think that, you know, it made us all very, very angry. So given the fact that in negative gearing changes in the budget, they basically carved out um businesses, equities, commercial property from the rule changes and left only existing residential properties in there. If they had done a similar thing with capital gains tax, do you sense you would have sent this open letter that this group would have sent this open letter to the government?

[00:18:00]Look, I'm not an accountant um like Jim Charas, but you know what I do know that what has happened here is that it's a major disincentive for women in business. Um and it's done without any consultation, any thinking through and uh yeah, you know, it needed to be something needed to be said about it.

[00:18:20]>> I'll tell you what, Genevieve, good to chat to you today on the program. As I say, it's a grassroots campaign, but it's the sort of thing that does cut through. the founder and chief executive of the Mint Partners. Many thanks for your time on the program.

[00:18:31]>> Thanks so much, Ross. Bye.

[00:18:33]>> The federal budget promised its policies would create an extra 75,000 homes in the next 10 years. Now, it sounds like a big number, but in actual fact, it's a drop in the ocean given that the government is close on 70,000 homes a year short of its target for Australia to build 2.4 million homes before the end of this decade, which is just three and a half years away and ticking. Now with rising interest rates and the proposed tax changes, investors and homeowners face the real risk of falling home prices. As Carly Chatfield reports, after three interest rate rises this year, the budget changes to capital gains tax and to negative gearing could not have come at a worse time for prospective housing investors. is probably the biggest uh tax reform we've seen to um the tax treatment of of property investment Australia for you know for a quarter of a century >> because negative gearing of property until now has been a national sport but the object of that sport often played out at Saturday auctions has been to create wealth >> folks let's get away on this Saturday afternoon >> aspiring homeowners chase the Australian dream. Investors have been confident they can reduce their personal income tax with the expectation that future home price rises will be greater than the losses they incur.

[00:20:02]>> Folks, all we need from you though is that opening bit, that opening offer.

[00:20:05]But the government argues that negative gearing and capital gains tax discounts skewed our housing markets, making homes too expensive for younger buyers to get a foothold.

[00:20:18]>> The distortions in the housing market are about the combination of negative gearing and the treatment of capital gains, which is why we're addressing both.

[00:20:26]>> But housing affordability is more than tax changes. It's affected by combination of home prices, interest rates, and the wages of buyers. To improve housing affordability, the nation needs a combination of lower interest rates, lower home prices and or higher wages.

[00:20:48]>> A more even playing field for for first home buyers may be a bit of a relative advantage for them. Um, but I wouldn't expect to see significant declines in house prices. Lower home prices would not leave the 7 million current homeowners happy. Interest rates for now are going up, not down. And higher wages potentially leads to higher inflation and therefore even higher interest rates. Now, I understand this is a really difficult time for households who are already facing higher fuel prices and other cost of living pressures. But we must get on top of inflation now so that it doesn't get away from us. But the pressure of the three rate rises this year is already catching up with home prices. In April, national home prices slipped 0.1%, marking the first monthly decline since January 2025.

[00:21:43]>> We're seeing a pretty broad-based slowdown in home price growth. And that's really being driven by the fact that we've seen the RBA raise interest rates three times this year already.

[00:21:51]That's reducing borrowing capacities.

[00:21:53]It's slowing buyer demand. and it's slowing home price growth.

[00:21:56]>> The nation's largest property markets, Sydney and Melbourne, recorded price falls in April while growth across the remaining capitals slowed compared with the previous month.

[00:22:09]>> Does tend to be the top end of the market that leads, but it's certainly not restricted to that. We have seen this relatively broad-based and even the the faster growing markets like Brisbane, Adelaide, Perth have also seen home price growth slowing. The price declines are partly driven by Sydney and Melbourne's robust stock levels. Unlike other capital cities, where supply is tighter, and when fewer than 50% of homes going to auction are being sold, there is more stock sitting on the market. The balance is tipping the way of buyers, not sellers.

[00:22:44]>> But for Sydney and Melbourne, part of the dynamic is that there's also just a lot of stock on market, a lot of choice for buyers. And so we're just not seeing the same pressure on prices that we are in places like Perth or Brisbane or Adelaide where there's a lot less stock and it is a lot more competitive for buyers.

[00:22:58]>> Yet despite the uncertainty, serious buyers still compete at some auctions like this one in Sydney's Inner South.

[00:23:08]>> $870,000 holding the keys now. 870. We call away three chances. Once, twice, third, and 880. Thank you very much.

[00:23:19]>> The bidding quickly heated up between the three registered buyers.

[00:23:23]>> We're on the market and we sell it if there's no further bidding now. So 940,000. Three chances to jump in the lead. Otherwise, the property goes now once, >> twice.

[00:23:36]>> 941.

[00:23:36]>> 941. Welcome back. 941. 941. Anything further, folks?

[00:23:40]>> One bidder walked away before the auction ended, leaving the two remaining parties locked in a bidding duel. to 941500.

[00:23:49]First time, second call, third and final time. We sell it. We sell it. Well bought. Congratulations. 941 and $500.

[00:23:58]>> The winners secure the twobedroom, two bathroom apartment with twocar spaces for under $1 million.

[00:24:07]A softer result here today with this property selling under the reserve price. Let's go have a quick chat with the agent.

[00:24:16]>> Spyro Maitrus, director at Ray White Burwood, says since the most recent rate rise, buyers have become more restrained with their spending.

[00:24:28]>> People are very wary of their budgets and they do not want to exceed their budgets in the last month or so. People coming to open homes discussing rising strata levies, electricity costs, and it's a definitely a common theme amongst buyers. He says buyers are pulling back and waiting for economic conditions to stabilize and perhaps for the dust to settle around the government's proposed changes to negative gearing and to capital gains tax.

[00:24:58]>> We've provided the Treasury modeling negligible impact on rents. Uh house prices will continue to grow but more slowly about 2% more slowly. That's the $19,000 figure. However, serious buyers remain active.

[00:25:13]>> There are less people attending open homes and auctions, but the people that are attending are serious in purchasing.

[00:25:18]I think it's affected confidence. Um, but that confidence hasn't affected people transacting if they've needed to transact.

[00:25:27]>> But the weaker clearance rates reflect fading optimism from earlier this year when buyers anticipated more rate cuts, not three increases. It's been a big change the the hikes that we've seen this year, particularly relative to sort of, you know, six to eight months ago when we're actually expecting to see further cuts this year after the the cuts we saw last year. We have started to see clearance rates come down over the last couple months on the back of that slowing buyer demand.

[00:25:54]>> However, with the unemployment rate unexpectedly climbing to 4.5% in April, this may ease some pressure on the Reserve Bank to keep raising rates. I think it's a case of people are sitting by and watching um and waiting on more clarity um and feeling more confident before they start purchasing again.

[00:26:16]>> Investors have also retreated from the markets which is likely to continue as the government commits to reserve negative gearing and capital gains tax benefits on new builds only, not on existing homes. After a surge of investor home loans in the past 12 months, the March quarter recorded a 5.3% decline.

[00:26:42]>> Investors have been one of the more interesting stories in property markets over the past couple years and have been incredibly active. Given that rental market conditions are starting to ease up a little bit and we've seen a hike in rates, we'd probably expect some of that investor demand to start to call a bit.

[00:26:55]>> On the ground, it's clear that investor demand is waning. Investors are definitely wary um and are watching by the sidelines and not as eager to jump in.

[00:27:07]>> Time as always will tell. It's been a turbulent year for Australia's property market. Three rate hikes, soaring inflation, global conflict, and fuel volatility are all taking their toll on buyer confidence. Property prices are slipping. Auctions are losing momentum.

[00:27:30]And with further rate hikes on the cards this year, the question now is, is this just a temporary slowdown or the beginning of a deeper downturn?

[00:27:41]Well, after the break, a medical breakthrough to stimulate our own cells to fight cancer. And the man cheering it, David Williams, has experience bringing medical breakthroughs to the market.

[00:27:57]This program is brought to you by real estate.com.au, Australia's number one address in property.

[00:28:13]It is great to have your company here on business weekend. Well, a couple of weeks ago, there was a quiet boardroom revolution at an emerging Australian biotechnology company. The revolution at Aravella Therapeutics included the removal of two directors and also the chief executive. Behind it all, one of Australia's serial investors and entrepreneurs, David Williams, just months after he failed to get sufficient shareholder support to remain as chairman of the artificial skin company Polyovo, though he does continue to own more than 3% of its shares. Now to Arabella, it's working on cell therapies that specifically target certain blood cancers. One of its directors is Dr. Sam Fiorenza, also the deputy director and and cell therapy therapy lead at Epworth Healthcare, David Williams. And Dr. Sam Fiorenza, join me now. Many thanks for your time. I really appreciate it.

[00:29:06]David, can I start with you? Polyovo had unique biotechnology. Aravella clearly is seeking the same thing. Right. Aravel has gone into cell therapies and uh the very exciting thing about what's happening in this market is that we're moving from highly toxic treatments like chemotherapy into very targeted imunotherapy and cell therapies using the patient's own immune system. So it's it's really exciting and has the same potential which I think you're getting at Ross to be a platform technology. So Sam, you've been working on this for some time. Just explain where Australia sits with this technology, where it is in in in the global marketplace and how it is commercialized.

[00:29:54]Australia's always Thanks Ross.

[00:29:56]Australia's always been a real world leader when it comes to imunotherapy. Uh from the start of my days when I was doing my PhD with Professor Ian Fraser all the way through to great luminaries in in Australian immunology. But this represents sort of a new frontier where we're taking that imunological knowledge and putting it into patients with the idea of curing cancer. Um, this sort of therapy is something that's novel in the Australian biotechnology landscape and and also really across the world where we're not just manipulating the the normal type of immune subset called the T- cell. In this case, it's an INKT cell which is a sort of potent anti-tumor killer cell. They're genetically modified. They're taken from healthy donors. um and kept in a as a as a bank of cells and then infused into patients with certain types of cancer.

[00:30:42]>> Okay. But effectively what it is is trying to use the the the body's own immune system to be able to fight and specifically target the the cancer cells. I mentioned in the introduction it's focusing Sam on blood on blood type of cancers. Does it go beyond that? I've seen talk about hard cancers or this type of thing. where does it actually go to in terms of the work you are with right now?

[00:31:10]>> So the trial that we'll be running at the Alfred Hospital and at the Epworth Hospital is being uh done specifically in certain types of blood cancers called lymphas. But the platform um has broad applicability to be able to introduce into solid tumors as well. Um everything from pancreatic cancer, gastrointestinal cancer, ovarian cancer, those sorts of things. Um but the trial that we're running and the one that we're working up at the moment is the one that'll be in blood cancers for the moment.

[00:31:35]>> Okay. Then explain to me the commercial implications. A there's always a cash drain while research is undertaken and of course if it doesn't work then the investors lose their dough but the second thing is if it does work clearly there is significant gains from that for the nation for the company for its shareholders. Just explain how it is commercialized.

[00:31:58]So commercialization is not not my thing, Ross, but uh I can talk to the science. The way these sorts of things work is they go through clinical trials starting with a phase one clinical trial where they attempt to find the optimum dose uh to cure patients. That's based upon both safety of the drug and how well it works in terms of curing the cancer. And then once that optimum dose is is taken, then they move to a phase two trial and then eventually these big phase three trials where you test it against standard of care therapy. with each you know increase and and and as they go up the the the risks get higher but the uh the rewards and potential for you know finding a potential therapy for certain patients uh increases. Well David you do have practical practical knowledge uh and applications in raising the capital and and then seeing these things through to commercialization just at what point does the money start flowing through the door?

[00:32:52]uh not for a couple of years, Ross, but understand just to simplify it down that what we're doing is taking a patient's own cells and either but because cancers have a way of evading or suppressing uh cancer and and detection even though in you and in me and in Sam we've got these cells running around in our blood supposed to be knocking out this cancer but so the the the treatments are really in two broad silos. One is to take your blood and take those killer cells out of it and multiply them up if they're getting a bit tired and putting them back into your body. The other one is to take the cells out and to engineer them so that they go after certain types of cancers. So the the the second thing which is where we're very unusual at Arabella is that we're trying to make these so that we can have that product on the shelf because if you're in the in rural Australia or anywhere else for access to these treatments is the is the most important thing. So there's a number of things happening at once in terms of how you treat with the cells but also access to those cells and and so forth. So, but it's a it's a couple of years out. But look, Ross, look at look at Polyovo. I mean, it was worth a billion dollars before we really had a product. So, as we prove up the technologies, then we expect in these companies to have a share price reaction. So, okay, I heard you and saw you commenting this week on the federal budget and about the incentive it gives inventors uh and and startup companies.

[00:34:34]You were pretty graphic in what you were saying the impact it would have on investors and their appetite. Has you have you have you have you softened your view at all in the last couple of days?

[00:34:45]>> Uh no, I've hardened my view in the last couple of days, Ross. But I mean one of the things that it didn't come out in the paper is this that if you start limiting the way in which these people can get R&D funds or be taxed to 10 years. Look at Polyovo. It really took 15 years to get a product and now we're another 5 years on on that product. So you if you artificially control these things, you're just killing innovation.

[00:35:14]I mean, we're we're living in a world where the old economy is gone and this is part of the new economy and and if we if we get this right at Arabella, for example, it's in Australia, Australian patients will be the first to get this offtheshelf treatment and uh but it'll be a world first.

[00:35:35]>> Okay. But then you described it more specifically, the capital gains tax changes as a kick in the balls. I mean, that's what you actually described it as. The the reality is a company such as this one in its infancy may be better to set itself up and take its technology overseas and not develop it and the jobs and the skills here in Australia. Isn't that the the danger of the disincentive that this new capital gains tax as proposed by the government creates?

[00:36:04]>> It's a huge it's a huge um risk and and what I made the point of is that most of these startups are very nimble. They don't involve hundreds of millions of plants that have to be and tens of thousands of people. In Arabella, we have 15 full-time staff and uh and not that much in the way of equipment. So, it's easy to pack up and go to Singapore and go, well, there's no capital gains here. Um and uh so it's a big risk. It's a big risk. And if somebody graphs this in two years time, people are going to go, "What happened to innovation in farmer and biotech and devices in those two years, three years?" Well, I'll tell you what happened. Somebody kicked him in the guts. I'd say it's interesting Sam because even you as a scientist working in this field, you can't be without consciousness of of the tax situation o of the incentives that are around for companies like yours for ideas like yours to be developed.

[00:37:06]Yeah, it's it's incredibly difficult and it's a it's a competitive funding environment as well, not just with regards to finding the investment dollars to work on these things, but also the uh the research dollars which are getting thinner and thinner as time goes on. Um so it makes makes life particularly tricky when it comes to trying to build new therapies and utilize Australian innovation and Australian knowhow to get these things to market and treat patients.

[00:37:28]>> I'll tell you what, it is good to have the both of you on the program today and explaining that piece of Australian ingenuity, Dr. to Sam Fiorenza and David Williams. I appreciate your time.

[00:37:39]>> Anytime, Ros.

[00:37:40]>> Thanks, Russ.

[00:37:41]>> Well, coming up after the break, changes to the way you own your car. They're coming fast. Driverless vehicles might question whether you should even own a car at all. We'll speak with a serial entrepreneur who's normally based in San Francisco, who's already created an Airbnb ownership model for your car.

[00:38:05]Thanks for being with us here on Business Weekend. Well, there's little doubt the car ownership is changing and it will change in the future with the infusion of driverless cars into our road networks. Once upon a time, Australians bought their cars outright.

[00:38:19]And that changed, of course, with leasing and noadated leases that will link the salary packages. The success of those no vated leases, tax deductions aside, was of course dependent on the resale value of your vehicle at the end of the lease term. Now, with an increase in electric vehicles, which have so far displayed a terrible resale value, the dynamics of car ownership becomes more like the ownership of a household appliance, which is little or no future value. So, other ownership models come into play. We already see car share arrangements like Go get. But there's more than that. This week, the US car rental business Turo launched Turo monthly in Australia. It's a subscription service and as the name implies, it's done on a monthly basis.

[00:39:04]The global CEO of Turo, Andre Haded, was in Australia for the launch this week and I spoke with him a little earlier.

[00:39:12]>> Yes, it started in the wrong place at the wrong time. I was born in Beirut in the early 70s and as you pointed out the civil war started just a few years after I was born. I was really uh um lucky in many ways that in 1989 a shell landed in my bedroom in our apartment building and we had to leave the capital city. we I ended up in France uh and that's where I pursued my higher education after the bearat and um I started my my work there but I jumped into entrepreneurship pretty early on I was one of the early founders of uh one of the early internet startups in France in 1998 a company called Ibazar it was a pioneering online marketplace business that I started believe it or not because I had a lot of records I wanted to sell and there was no place for me to you know easily sell them in France back then and I was inspired by eBay and that's how it got me into the internet.

[00:40:10]>> But it gets me because there are so many other members of that Lebanese diaspora that went to many parts of the world including Australia. So a very large part of it here in Australia as well who have been successful entrepreneurs.

[00:40:22]There's something about having left a war torn country that kind of inspires many individuals to do so well. I think it's a lot about risk-taking. You know, once you've uh lived through these conditions and uh you know the value of today and tomorrow, I think there's a different perspective to life. And certainly I felt emboldened by the fact that I survived the war uh that frankly starting a new company was relatively risk-free in comparison as an experience.

[00:40:51]>> So I then want to take you to your career as an entrepreneur and it's largely been based around marketplaces.

[00:40:57]Yes. And in some ways that's exactly what Churro is doing as well through the eBay experience through what you did in France as well was another marketplace.

[00:41:05]In some ways Churro is also a marketplace as well.

[00:41:09]>> I've been I've been passionate about marketplaces you know for over 25 years now. Um you know what I find really uh exciting for me personally and I find is validating for me is uh marketplaces whether it's eBay, IBizar or now Turo create a lot of economic opportunity for people who don't necessarily have access to these opportunities before the existence of these marketplaces. So with Turo for example, the you know the idea that you could actually earn money with your underutilized car was something that Turo pioneered uh 15 years ago. And over the last 15 years we've generated over $3 billion uh US dollars, so a bit more in Australian dollars for all of our hosts that have joined the platform since then.

[00:41:54]>> So you're effectively the Airbnb of vehicles, aren't you? That's what you are.

[00:41:57]>> Yes, we are in in many ways. And I think what's really exciting for me to be part of a company that's creating this economic opportunity is that we're not just selling a product that uh people consume. We're also helping people achieve certain levels of economic um sufficiency. Uh and it's really exciting to also see that large parts of our community become entrepreneurs themselves and they start scaling their business on our platform. And now we have many hosts on our app that have multi-million dollar businesses that they've built on top of our platform.

[00:42:29]So, >> and the interesting part about this is if you think about a traditional car rental business, that requires either enormous lease payments to have those vehicles sitting there ready to go or that you've got to commit enormous amounts of capital to them. Yes.

[00:42:44]>> Here you kind of freeing up the capital that people have got in their own vehicles.

[00:42:48]>> Exactly. Exactly. That's the beauty of Churo. It's we already make we make good use of things that are already existing.

[00:42:55]>> Uh we're not just adding more cars to the market. We're not putting more debt in people's uh finances. We're enabling people to earn with what they already have in place. And so uh I find that really exciting and that's been I've been addicted to marketplaces now for over 25 years. So tell me this with Churro with the the patrons that use it, the those that own the cars, the vehicles, are they more likely to be investors that will put the car out there or are people more likely to put their own personal vehicle out there?

[00:43:26]I'm wondering about that personal space of a person's car and the barriers that people might have about sharing it with others.

[00:43:32]>> It's a great question and and I think the answer has changed over the years.

[00:43:36]You know, now the company is 15 years old. In Australia, we're a bit younger.

[00:43:40]We launched in in 2022, but our Australian business is is really amazing in terms of its trajectory and is showing the same potential as we've seen in the US. Uh in the early days of the company, it was individuals like uh you and I who have a car and who are interested in just solving a bit more of their day-to-day economics. They can use their car earnings on Turo to pay for their insurance premiums. uh they can perhaps fund their monthly payments uh if they've financed the cars or leased the cars. Uh so it started with you know people with that use case. Over time what we've observed is we're now attracting a lot of entrepreneurs uh that actually are not just uh scaling to multiple cars but also are connecting with investors. Yes. uh as you pointed out who are interested in supporting their entrepreneurial uh adventures on Turo and are funding their businesses and are growing their businesses through that additional investment. We call that co-hosting. So you can be uh a fleet owner or an investor and you can invest in our host, our professional host. We call them our all-star hosts. Those are our top ranked hosts that deliver great experiences for our guests and you can fund their business and become their investor in many ways and they become your co-hosts. And so our business is now is quite uh balanced between what we call consumer hosts who have one or two cars and then fleet professional host allstar hosts that have multiple cars.

[00:45:11]>> Okay. So, I know that you're based in San Francisco, but I just want to know that your experience of the driverless cars, the networks of those that are now becoming more pervasive inside those road networks, how is it affecting your business? And in 5, 10, 15 years time, as there are more of those in road networks around the world, how will it affect this model?

[00:45:33]>> Uh, we're very excited about uh autonomous vehicles, AVs as we like to call them. we use that uh acronym uh in San Francisco. They're all over the city. If you've visited, you must have seen them.

[00:45:45]>> Um so stay tuned because we have some exciting things that we're going to share on Turo related to AVs in the in the next few months. But in a nutshell, uh we think AVs can be um a really attractive addition to the selection of vehicles that we have on Turo. We think that there will be AVs that will be purchased by individuals that will be made available uh by OEMs to consumers like you and I. I'm looking forward to buying one. Uh I think the future for us is those types of EVs that enable consumers to be in and out of driving.

[00:46:18]>> Yes. Um because in many ways, you know, we we love the freedom and the control of driving when the road calls for us for those road trips, for those special trips, but we don't necessarily enjoy driving, you know, in the congestion for our commute. So, >> so just just a quick and your monthly model here where you can literally subscribe. So, it's almost a subscription model, right? So, therefore, it's a bit like Spotify or something like that. Any of those things. The one thing I wonder with an EV fleet, >> it's exactly the same. You simply subscribe on a weekly, monthly basis.

[00:46:53]Yes. And you get X number of trips or you get pay-per-view, whatever it might be. It's kind of like similar to the way in which we now view a lot of video, isn't it?

[00:47:02]>> You're right. There are lots of trends that I think transforming the mobility space as we call it. Whether it's car ownership or access, whether it's AVs or EVs or combustion engine vehicles, all of these things I think are colliding together and a lot of consumers are changing the way they're thinking about traditional car ownership. Uh what we are excited about with the launch of Turo Monthly here in Australia this month is that we're enabling people to access more on demand and in a very flexible way cars. They don't have to commit to a lease.

[00:47:32]>> Andre Head, I appreciate your time.

[00:47:34]>> Thank you.

[00:47:35]And that's it for business weekend this Sunday. Thanks for your company. Up next, all the latest news right here on Sky News. Business Weekend returns next Sunday, but of course, you can keep up to date with all the latest business news with our daily program, Business Now, at 4:30 p.m. Eastern time and via our website, skynews.com.au.

[00:47:54]Good to be with you today. I'm Ross Greenwood. We'll see you next week.