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

Fierce is what the Flux.

I'm Brett and justin app Monday, the tewond of December, j boy.

The number of young Australians taking out private health insurance has reached a record high in the September quarter. According to APRI, more than fifteen million Aussies now have some form of private health insurance and the main driver ossies in their twenties taking out hospital cover used for mental health treatment.

You seeing that flex a well somemer may mean music festivals, Christmas parties and maybe a future many babies. It can also mean antent gent to our bank account. And as we've reached the silly season, this month's Academy is the perfect way to navigate the ins and outs and what to do this silly season. To make sure to download the Flux app and check out the brand new.

Academy three Ominous Stories today, Jesi boy, Let's do it for our first, the Australian government has green lit new legislation that will force multinational companies like Netflix, Apple and Microsoft to pay a minimum of fifteen percent tax better.

Than what they're paying out man, So tell me a little bit.

More, well, Juzi boy, we know that the big dogs of tech have been on ossie shaws for a very long time.

Now. Yeah, Apples, yea, Amazon's in, Netflix, your, Microsoft's. The list goes on.

And while we may love their products, the Australian tax officer doesn't have the warmest feelings towards them.

That's because many of the major tech companies haven't been paying taxes proportional to the profit that they're pocketing in Australia.

In fact, Jasi Boy, in the twenty twenty three financial year, many large tech companies did not pay tax in Australia at.

All, companies like Netflix, Canva and even Sony.

So late last week, the Australian government joined more than one hundred and thirty five other countries to apply a global minimum tax of fifteen percent. And what does this actually mean, I'm glad you asked, Jusi Boy. It means that a company with more than one point two billion dollars in global revenue they need to pay at least fifteen percent tax across their global operation.

And that means it can't start profit shifting money from Australia to Ireland, to the Cayman Islands and beyond.

And the goal in Australia is that multinational companies pay a fair amount of tax for the revenue earned in our country.

So what is the key learning here.

It's time for the world's biggest companies to pay tax in the countries where they make money.

You see, Beman, major tech companies have been using very sophisticated accounting to minimize their tax in Australia.

Because Australia's thirty percent corporate tax rate is one of the highest in the world.

And how do these tech companies do.

This, Jollie Boyd's pretty simple. They keep a physical presence in tax effective countries like becam An Islands, or like Ireland and be Man.

You can see, for example, in the twenty twenty three financial year, Apple made more than twelve billion dollars in income in Australia.

But if I look over here, it only paid one hundred and forty two million dollars in tax, which is just over one percent of earnings.

So be man in. This new legislation, which passed in Australia and more than one hundred other countries, means that major tech companies will need to.

Cough it up if they want to operate in these countries.

And the man at once. In effect, this could have a huge impact on the profits of these massive companies.

Which could spell some bad news for Wall Street.

For our second story, Vergin Australia is one step closer to finalizing its partnership with Qatar Airways after the A Triple C gave it the all clear to start selling flights together.

Definitely not what Quani wants to hear, Juzzy boy, tell me more.

Okay, So, Virgin Australia is the ouzsie airline that launched back in two thousand as at Virgin Blue, then rebranded to Virgin Australia in twenty eleven, but went bust during COVID and just when Quantus thought it had the airline market all to itself, Virgin Australia ruse like a phoenix out of the ashes. Now, Josie boy, you may remember when we spoke about Qatar Airways plans to buy a twenty five percent stake in Virgin Australia. I do, and

But now Virgin Australia and Qatar have taken one step closer to formalizing this marriage.

Yeah, the a Triple c's given Virgin Australia the green light to start selling tickets on Qatar Airways operated flights from Australia.

This means that Qatar Airways will effectively double its flights in and out of Australia from June twenty twenty five.

Meaning more competition on international routes.

But hold your horses right there, Jouzzy boy, not one step further, because this is just an interim authorization by the Atriple C YEP, the.

Atriable See and Foreign Investment Review Board won't make a final decision until March or April next year.

And no surprises here, Quantus is digging in its heels to try and stop this deal from taking place.

So what is the key learning here?

More airline capacity typically means more competition and therefore lower airfares.

It all comes down to the basics of supply and demand.

Now, this new Qatar Virgin deal will mean there is more than fourteen hundred new seats available each day from Australia to somewhere overseas.

And according to Virgin, Australian airfares to Europe have jumped more than forty percent, since COVID and I can confirm, so.

Jazzy Boy having more capacity means that airlines need to be more competitive on prices.

But here's the thing, be Man. Qatar can reduce its airfares a lot more than Quantus can. Why is that largely because qatar airways labor costs are estimated to be about a third of quantuses.

Wow, that's because of different industrial relation agreements.

So while Katar always may introduce new flights and lower the airfares, what kind of as a price for And.

That is why they so fiercely are against this new partnership.

For our third and final story, Uber is under investigation in the US for making it subscription service Uber one too hard to cancel.

The typical story, too easy to sign up, too hard to cancel? What is going on here?

So we want to know Uber the heavily funded now nasdek listed a ride sharing app.

Founded in two thousand and nine and has grown to over seventy five million active users around the world. But juzzboy. Now Uber is in hot water once again, this time with the US Federal Trade Commission, which is kind of like the ariple c here in Australia.

Yeah, the FTC is investigating Uber's subscription one service, Uber one. Yep.

They try and understand a little bit more about the enrollment and cancelation processes of Uber one.

Because the thinking is that Uber makes it very easy to sign up to Uber one, but not so easy to cancel. Ah, the old negative option marketing, So what is the key learning here? Negative option marketing is a strategy where a customer's inaction is considered consent to be charged for goods or services, and as a result, consumers are automatically enrolled in the service and need to opt out if they want to stop.

But doziboy. Here's the issue. Some companies create intentionally difficult cancelation flows.

The idea is that it traps people into paying for something just because they didn't know how to cancel and does a boy.

Uber isn't the first company to do this, Nope.

The FDCs recently sued Amazon and Adobe for allegedly making it too difficult to cancel subscriptions as well. And given the revenue from Uber One's membership fees are in excess of one billion dollar run rate, this could be very costly for Uber. Fusam as the silly season comes up in summer with music festivals, Christmas parties, and a whole

Thanks for listening, and we'll see you on Wednesday.