Below the Fold: Bracing for a Bumpy Landing

Below the Fold is the monthly newsletter from Cognito, an independent PR and communications agency specialising in financial services and technology, with a team based in Sydney.

AI is coming for our jobs. Or is it? Nothing new about that debate, you might say. What was new was the change in tack by Commonwealth Bank’s CEO, Matt Comyn, at an AI conference in Sydney in late May, during a sit-down interview with OpenAI’s Sam Altman.

If you listen to Matt Comyn – yes, it is. Which was a bold about face from one of Australia’s top corporate leaders.

Comyn used his time on stage to tell his own 55,000-odd staff to brace for job losses. Altman, on the other hand, used his time to walk back years of warnings about exactly that. I’ve pulled the two apart in this month’s Kudos and Catastrophes because the messaging gap between them tells us a lot about each corporation’s communications priorities.

Elsewhere, the Federal Budget landed on 12 May and boy, was it a bumpy landing. We’ve taken the measure of it below under ‘Narratives’, including an analysis of the difficult road ahead for Chalmers and the Labour Party to bring back.

As always, get in touch if anything here caught your eye, or if there’s something you’d like to see in next month’s edition.

Until next time,

Jonathan Buxeda,

Director, Cognito ANZ

Narratives Down Under

As observed by Scott Schuberg, Managing Director, Cognito ANZ

In March 1993, then Liberal opposition leader John Hewson was asked a seemingly simple question about the introduction of a goods and services tax (GST) that he was taking as a commitment to the next election, alongside a range of other fiscal measures contained in his party’s Fightback! manifesto.

Veteran TV anchor, Mike Willesee, asked Hewson whether he’d “pay more or less” for a birthday cake under the GST regime he planned to introduce. It was 10 days prior to the election, which the polls predicted Hewson would win.

Hewson gave the best answer he could – a birthday cake wouldn’t be exempt as it wasn’t classed a basic food like milk or bread, so the price difference would be the result of removing the existing sales tax and adding back the (then) 15% GST that was to be introduced. But he still didn’t answer the simple question that was asked. The nation got confused, and Paul Keating’s Labor party enjoyed a 5.5% swing, winning the election less than two weeks after the disastrous interview.

Luke Kinsella from The AFR wrote a piece on 3 June highlighting what an indexation system linked to capital gains means for real (after inflation) profits on stocks when you’ve got a portfolio containing a mix of both real gains and nominal losses. Luke did a great job of unpacking this, but it’ll still made my brain hurt when I read it.

If… who are we kidding… when Federal Treasurer Jim Chalmers is asked, “If I buy $1,000 worth of CBA shares today and sell them for $1,500 in five years’ time, how much tax will I pay?” he’ll want to have rehearsed his answer in front of plenty of focus groups. John Hewson had half a chance of providing a simple answer in 1993, but Charmers can’t answer this question. We don’t know what the real gain on $500 will be in five years’ time, because we have no idea what the next five annual inflation rates will be. Worse still, who wants to sit down with their accountant and try to understand the inflation-adjusted CGT calculation you’ll need to sign off on your return to lodge it with the tax office?

Often, but not always, politicians win elections by rallying behind broad value statements. Obama said, “Yes we can.” Gough Whitlam told Australia, “It’s Time.” And, yes, Donald Trump dropped the “Let’s” from Ronald Regan’s slogan and promised to “Make America Great Again.” Jim Charmers is trying on “Intergenerational Fairness” for size, but it’s full of holes. I work with a lot of youngsters who simply see it as closing a bunch of tax loopholes before they’ve gotten rich enough to use them like the ‘Boomers’ did.

I try not to get into the habit of shoehorning every anecdote into advice that is analogous to the industry I work in, but storytelling is the way we humans connect. When you’re bursting with confirmation bias about a bold new tax plan you’re taking to the public, the human story can easily get broken if it doesn’t smack of common sense. When the plan is highly technical, things worsen.

To be clear, I’m sure there is virtue in many aspects of the changes Chalmers hopes to legislate next month, and he is clearly trying to implement something that he’ll see no short-term benefit from – personally or politically. But even if his plan were technically perfect, perfect is the enemy of good, as they say. An obsessive need to do too much at once means there is a compounding friction in his quest to find allies in the media – I’m just relieved it’s not Cognito’s job to help him sell this one!

Kudos and Catastrophes

This month is a study of conflicting corporate priorities, and how they’re communicated.

The kudos goes to Matt Comyn. Ahead of CBA’s AI conference (as referenced above), the bank’s chief told his workforce more or less plainly that AI would cost jobs, and that pretending otherwise wasn’t a kindness. Pretending every role can be saved, he said, “only ensures they are surprised later”. Punchy.

Others faced with the same question would likely reach for phrases like “AI is here to augment, not replace” and “redeployment opportunities”. Honestly, it’s refreshing to hear this kind of frank honesty from a corporate leader, even if we may not necessarily like to hear the underlying message.

What makes it interesting is the history. Less than a year ago, CBA became the first Australian bank to pin redundancies directly on AI, cutting 45 call-centre roles on the basis that a new voice bot had reduced call volumes. The Finance Sector Union pointed out that volumes had actually gone up, that staff were being offered overtime and team leaders were answering phones, took it to the Fair Work Commission, and the bank folded, conceding it “did not adequately consider all relevant business considerations” and reinstated the jobs (I wrote back in August about how quickly CBA’s comms team puts out that particular fire.)

So, this time the candour reads as a bank that learned something. Having been caught dressing up cuts as a customer benefit, Comyn has gone the other way: say the hard thing first, on your own terms, before someone says it for you. He also paired the warning with a plan rather than leaving staff to stew on it, pointing to a $90 million workforce program and $2.4 billion a year on technology. Whether the people in the building find that reassuring is another question. As a piece of outbound stakeholder communications, it’s a long way from last year’s fumble.

Speaking of fumbles, on the same stage, Sam Altman told the room he had got it badly wrong on AI and jobs, that he had expected far more damage to entry-level white-collar work by now than has shown up. “I’m delighted to be wrong about this”, he said.

Taken on its own, fair enough. People are allowed to update their views. The trouble is the timing. This is the same Altman who spent the previous couple of years warning about precisely this risk, and the walk-back arrives just as OpenAI is reported to be circling a public listing. This is a moment when “we might gut the white-collar workforce” is not a line you want as the tagline for your roadshow. He isn’t alone, either. Anthropic’s Dario Amodei, who once floated AI eliminating half of all white-collar jobs, has lately softened to AI expanding what people do. Suspicious timing, if nothing else.

What I’m hearing is two conflicting communications priorities: a bank CEO telling his own people the uncomfortable thing, and the tech guy who built the product telling a paying audience not to worry, in the same week that tech layoffs for the year ticked past 100,000. Who has it right? I guess we’ll have to see.

Coffee With a Journalist

As the cooler weather settles in, this month we caught up with Vinny Vucago, financial journalist at the Financial Standard. Vinny has recently made the move into financial and sustainability reporting after previously covering music, culture and entertainment.

Vinny now writes across both Financial Standard and FS Sustainability, producing around three to five stories a day, with a strong personal interest in trends and policy shifts shaping the sustainability space.

A key insight from our conversation was how the FS team runs on a fast daily rhythm, with a morning editorial meeting where the team locks in coverage priorities for the day. That makes timing critical when it comes to getting the right story in front of the right desk.

For those looking to engage Vinny or the team at Financial Standard, timing and relevance are everything.

And that’s it! Until next month.