Confidence tumbles as Omicron takes hold


EU tightens rules for Aussie travellers


Don’t be afraid to look up as large asteroid to soar past Earth


Unions threaten strikes over Omicron safety demands


Retailers taken to task over soaring cost of rapid antigen tests

Pharmacies, petrol stations and cigarette shops will be named and shamed for ripping off Australians who desperately need to get tested for COVID-19.

The Australian Competition and Consumer Commission (ACCC) says federal police have been given evidence against offenders who are charging up to $70 for a single rapid antigen test (RAT).

New South Wales couple Deborah and Kieran Moore drove for 30 minutes to find a test, only to be ripped off at a service station where multi-packs had illegally been opened and split up for sale at a higher price.

Each test cost them $20 – even though at wholesale a RAT can cost businesses as little as $3.95.

“[The staff member] gave us a photocopied instruction sheet,” Ms Moore said.

“The funny thing was that on the instructions, it says, ‘Don’t throw away the box’.”

Rapid antigen tests
The Moores were sold individual rapid antigen tests taken out of a multi-pack – despite the instructions clearly stating ‘DO NOT DISCARD the box’.

The couple had needed two RATs for a trip to the Gold Coast before Queensland ended its border restrictions, and wanted an extra two for peace of mind as Mr Moore is particularly vulnerable to COVID-19 having had a kidney transplant.

“He’s on anti-rejection drugs that stop the immune system from working,” Ms Moore said.

“It’s terrifying.”

Retailers passing on costs of rapid antigen tests

The ACCC said the most reported traders for RAT price gouging are pharmacies (879 complaints), convenience stores, tobacconists and supermarkets (283 complaints), and petrol stations (272 complaints).

ACCC chairperson Rod Sims said businesses will face “very painful” penalties if caught price gouging, and a mark-up beyond 100 per cent is “hard to justify”.

Mr Sims said although small outlets have been the subject of concerning reports, pharmacies also “have some explaining to do”.

The Pharmacy Guild of Australia declined to comment.

Australian Association of Convenience Stores (AACS) CEO Theo Foukkare said the AACS has received reports of excessive pricing across the market.

But he said most cases come down to the fact that retailers are being charged inflated wholesale prices for rapid antigen tests by second- or third-hand wholesale distributors.

“It’s ridiculous, but it’s happening,” he said.

Mr Foukarre said he had heard some retailers are being charged $25 for single tests wholesale, and are selling them for $30, which he said makes for an “extremely low profit margin”.

“And then it’s seen as price gouging,” he said.

However, the ACCC says its data shows wholesale prices vary between $3.95 and $11.45 per test, depending on the type of test and volumes purchased.

Mr Foukarre said he contacted the Department of Health for clarification on the responsibilities of AACS members, and was told price-gouging restrictions do not apply to retail sales from wholesale supplies.

The Department of Health informed him the restrictions only apply to retail sales by businesses where products were previously purchased in a retail transaction and are then resold (or offered for resale) for more than 120 per cent of the original purchase price.

Stores named and shamed

The ACCC named and shamed King of the Pack and Metro Petroleum stores for having received 70 and 40 price-gouging complaints, respectively.

Metro Petroleum refused to comment.

Specialist tobacco retail franchise group King of the Pack told TND in a statement it “does not in any way condone price gouging and has advised all retailers that it is against company policy”.

It said some stores are trying to make tests more available for communities by going through two or three wholesalers, resulting in a higher cost for customers, rather than waiting for direct sales to become available.

“One of our stores has confirmed the Police Local Area Command visited them and verified their invoices and their allowable sale price to consumers,” King of the Pack said in its statement.

“Unfortunately, there are currently no guidelines for retailers to refer to regarding splitting boxes and selling the tests individually, but once they are in place, we will ensure our stores are informed as soon as possible.

“This practice was originally put in place by local pharmacies all over the country as a means to get more tests out to the public.”


World’s 10 richest men doubled their wealth during COVID: Oxfam


Corporate reports and jobs data top this week’s must-watch market events

US sharemarkets closed marginally lower last week on concerns over rising inflation and interest rates and after major banks reported mixed earnings.

Also weighing on sentiment were Omicron-related disruptions and softer economic data, as retail sales, industrial production, and the January Preliminary Michigan Consumer Sentiment all missed consensus expectations.

The Australian sharemarket, the ASX200, fell 0.8 per cent to close at 7394 as the 7400 level continued to exert a magnetic-like effect over the local bourse.

Here are the top five things to watch in markets this week.

1. US Q4 2021 earnings results

Fourth-quarter reporting season picks up speed this week with 114 companies scheduled to report, including Goldman Sachs, Morgan Stanley, Bank of America and Netflix.

Despite the headwinds of Omicron, rising inflation and higher interest rates, the estimated earnings growth rate for the S&P500 is expected to be 21.7 per cent, which, according to FactSet, will mark the fourth straight quarter of earnings growth above 20 per cent.

2. Australian jobs data for December

Employment in Australia rebounded by 366,000 in November.

The jobs report for December to be released on Thursday is likely to show a more modest gain of about 60,000 jobs, with the unemployment rate falling slightly to 4.5 per cent.

3. Fed speak before the blackout period

Comments by Federal Reserve speakers on policy normalisation will be closely watched for this week ahead of the Feds blackout period that starts this Friday, before its January 25-26 meeting.

4. Canadian inflation data

This week, a strong inflation print may become the catalyst for the Bank of Canada to become the latest central bank to join the interest rate hiking cycle at its meeting next week.

5. UK employment and inflation data

Strong inflation and employment data this week should be the final confirmation that the Bank of England with follow up its 15 basis point interest hike in December with a 25 basis point hike at its meeting in the first week of February.

Brought to you by City Index. Access to over 4500 global markets on shares CFDs, Indices, Forex & Crypto with a trusted provider.

All trading carries risk. The figures stated are as of January 17, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.


Kmart owner reduces trading hours after Omicron spoils Christmas

Kmart and Target face stock shortages and slashed trading hours at some stores as surging Omicron cases threaten their huge workforces.

In a trading warning on Monday, retail giant Wesfarmers said sales at the discount retailers plunged in the last six months of 2021, with the rapid pre-Christmas rise in COVID-19 spoiling hopes of a strong holiday trade.

Making things worse, customers continued to avoid the shops in the first two weeks of January, the retailer said, while the sheer number of staff unable to work due to virus infections or because they were close contacts had hit supply chains.

This had “impacted” stock availability and forced some stores to cut trading hours, the Kmart and Target owner said in a statement.

“These issues are expected to persist while COVID-19 cases and the number of team members requiring isolation remain elevated,” it said.

Wesfarmers didn’t reveal what products were in short supply, or which Kmart and Target stores were operating with reduced operating hours.

But the warnings came after Woolworths and fast food chains KFC and McDonald’s said they faced similar staffing issues last week.

On the back of these issues, Wesfarmers warned second-half earnings for Kmart Group – including Target and – will be less than half the prior year, with sales down 10.3 per cent in the past six months.

Sales for the six months to December 31 were also 5.2 per cent lower than pre-pandemic (2020); affected by lockdowns, Omicron and a plan to reduce Target’s national footprint that led to the closure of 62 stores.

“Customer traffic to stores was impacted by rising community transmission of COVID-19 in some states, particularly during the Christmas trading period,” Wesfarmers said on Monday.

“High levels of COVID absenteeism in NSW and Victoria impacted the ability to deliver stock to stores in line with consumer demand.”

Higher costs also weighed on Kmart Group’s bottom line, while online retailer Catch Group is also expecting a $43 million-$45 million loss on the back of investments in its core business during the trading period.

Wesfarmers now expects to post earnings of $170 million-$180 million for Kmart Group for the second half of 2021, compared to $487 million for the same period in 2020.


Brands call for cut to plastic production


Neoliberalism is at the heart of the Omicron shambles

It’s a month since the Australian Financial Review ran the memorable headline: “Morrison stares down Omicron: ‘It’s manageable’”.

It was a reasonable spin to put on the Prime Minister’s announcement that opening the borders to skilled migrants and foreign students would go ahead, followed up by his “victory lap” speech to the Sydney Institute that night.

“In a truly global pandemic, Australia’s response has been a positive standout,” declared Scott Morrison, listing the ways in which the pandemic was now in the rear-view mirror while his government’s sights “are firmly through that windscreen on the road ahead”.

But oh boy, that speech and the AFR’s headline have not aged well.

In the days following, the Morrison government and most of the states removed most pandemic restrictions for Christmas, to everyone’s relief but against the advice of epidemiologists.

It was probably against the advice of their chief medical officers, as well, although only the inevitable royal commission will tell us that, when they’re questioned under oath, one by one.

There seems to have been no planning of any sort for the increase in COVID-19 cases that was always going to result from Omicron.

The result has been a shambles: Tests unavailable, businesses closing, supermarket shelves empty, hospitals and emergency services overwhelmed, the economy taking another swan dive, and the unvaccinated Novak Djokovic getting a visa, later withdrawn.

‘Shout-at-the-TV exasperating’

Watching from the sidelines of annual leave, it has been shout-at-the-TV exasperating, no holiday at all really, but the question that keeps coming back to me is: Why is it that governments, especially conservative ones, don’t do risk management?

Other organisations do it. In fact, half of most board meetings are spent discussing the risk of decisions going wrong and the things they need to do to prepare for a worse-case scenario, all while telling the market, of course, that the decision is perfect and everything is going to be just hunky dory.

Not conservative politicians. They reassure and then believe their own reassuring bullsh-t, and/or their neoliberal ideology, which tells them that governments are always the problem, not the solution.

The experts were warning before Christmas that things might go south with Omicron, and although it looked less deadly than Delta, the exponential increase in cases would result in similar or higher numbers of hospitalisations and deaths.

In fact, the exact future of Omicron was being modelled by epidemiologists so there was no need to guess.

Testing queues ballooned over the festive period. Photo: AAP

So why on earth would the nation’s political leaders not hedge both their commentary and their actions with some recognition of the risks?

And why would they not realise that applying the same isolation policies for close contacts when there are a lot more cases would result in a collapse in the availability of staff?

Why has there been no national public space ventilation policy, as all infectious disease experts have been calling for?

Instead, they rolled the dice, while failing to put in place any contingencies for staff shortages or making sure there would be enough tests.

And what risk management planning is being done for the next variant? Omicron is definitely not the last.

Same approach to climate policy

Much the same dice-rolling has been going on with climate change.

In 2007, Kevin Rudd famously called it the great moral challenge of our time, which it was, and is, but global warming is primarily a risk management challenge and successive conservative governments have conspicuously failed in that.

The risk of catastrophe from global warming is not zero so why would anyone in a position of responsibility assume that it was?

It’s not just Australia; many politically conservative leaders around the world have been prepared to assume the risk of climate disaster is zero and act accordingly, although the Australian Coalition does seem to have attained world leadership in insouciance, both with climate change and Omicron.

What is it with conservatives that they don’t bother with risk management?

Edmund Burke, generally regarded as the founder of modern conservatism and quoted by Scott Morrison in his Sydney Institute speech alongside John Howard, said (among many other things): “Nobody made a greater mistake than he who did nothing because he could do only a little.”

So it doesn’t seem to be Burke’s fault. He was a practical man, who also said you can never plan the future from the past, which implies a recognition of the need for risk management.

Maybe it’s just a hangover from the absolute certainties of Margaret Thatcher and Ronald Reagan. Thatcher used to say there was absolutely no alternative to deregulation, privatisation and the free movement of goods and capital.

Reagan, of course, declared at his inauguration as head of government that government is not the solution, but the problem.

Rapid antigen tests Victoria schools
The federal government failed to secure enough rapid antigen tests before moving away from PCR testing. Photo: AAP

The PM must step up

In his book about the pandemic, called Shutdown, economist Adam Tooze says that dealing with the macro risks of COVID requires a willingness to contend with political choices about resource allocation and priorities.

“That runs up against the prevalent desire of the past 40 years to avoid precisely that, to depoliticise, or use markets or the law to avoid such decisions.

“This is the basic thrust behind what is known as neoliberalism, or the market revolution – to depoliticise distributional issues, including the very unequal consequences of societal risks, whether these be due to structural change in the global division of labour, environmental damage or disease.”

He goes on to point out that the coronavirus has exposed our “institutional lack of preparation” and the “weakness of basic apparatuses of state administration”.

A lot of Scott Morrison’s recent rhetoric about the pandemic has been flavoured with neoliberalism, as in: “The reach of government in this pandemic is not some new norm, and it will not be under our government” and “now (is the) time for governments to … step back”.

Not so fast, Prime Minister. You need to step up, not step back – you’ve got a job to do.

Alan Kohler writes twice a week for The New Daily. He is also editor in chief of Eureka Report and finance presenter on ABC news