SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for the Public Service
Minister for Women
Date: Tuesday, 16 May 2023
I would like to also begin by paying respect to the traditional owners upon whose land we gather this morning and I thank them for their custodianship and care for this beautiful country.
I extend that respect to all Aboriginal and Torres Strait Islanders people joining us today, and in that spirit of reconciliation and respect I look forward to the national vote later this year to recognise Australia's first peoples and including a constitutionally enshrined voice to our nation's parliament.
Can I acknowledge your local Dynamo Senator, Nita Green, thank you for the invitation to speak here today. Nita is a fierce advocate for this region in Canberra and so, the entire government feels very well briefed on your priorities and pressures and we're all a little bit scared of Nita, so, in a friendly way.
Can I also acknowledge all the team from Advance Cairns. Thank you very much for hosting the breakfast and to everyone for joining us here this morning to hear from me, about the Albanese government's Budget of last week.
It is really great to be here after being locked in ERC rooms in Canberra for months, and then in the Senate last week, where we tried to get some really important pieces of legislation through, and it has been a big week and a big month and really as we come up to it, a week away from our first year for the Albanese Labor government.
Now, I haven't seen sunlight for a while, that's fair, and I do come from Canberra and I'm sitting here this morning in fact looking out at the pool at my hotel, I realised that the majority of my trips to Cairns have been for recreation, not for work, and I could really feel it this morning as I put my work clothes on whilst looking at an area which has been such a fantastic place for my family and I to holiday in.
But in terms of the Budget, which is really what I wanted to focus on today, and I do thank everyone for coming out, and I just want to acknowledge the pharmacists who are here, I can see there's a number of you here today, and I look forward to the opportunity to talk with you about some of the changes that we're putting in place in this Budget, and also to thank you for the work you've done, particularly through the pandemic when you provided such critical services to the Australian community.
But essentially when you look at our Budget, and the Budget is a number of different documents.
A number of books and portfolio budget statements that that go alongside it.
The Budget itself is hundreds if not thousands of decisions taken together that land in that final document, and essentially for me looking at it there's really five parts to this Budget.
There's the part that provides targeted cost of living relief. So, some of those investments we're making in in Medicare, some of the support for people on payments.
The second part, which crosses into the first, is delivering those investments into health and Medicare in particular, but it's more than just Medicare. So that's some of those issues that no doubt we'll talk about with the pharmacists on cheaper medicines, but also the urgent care clinics.
We've got growing the economy. So that's looking at the energy transition skills, how we support small business, what are some of the economic opportunities that are coming out of some of the big pieces of work we're doing like the Defence Strategic Review, which I know is really relevant up here.
Also, how we repair the Budget, how we get the Budget on a better footing so that when the next crisis comes or the next big investments are needed, that we've got the Budget in enough, in good enough shape that it's able to absorb those pressures, which is, you know, really important and we've seen it play that role in the GFC. And we've seen it play that role in the pandemic, you know, when you need to invest huge amounts of money in the economy to keep jobs going, and people supported, that the Budget's in shape to do that. And, you know, at the moment it's under a fair bit of pressure. And so, we've we've had a big piece of work about how we find savings and things like that to make sure that we've got, you know, enough capacity to deal with the next pressures that come.
In the targeted cost of living relief, so that's things like the energy relief that will flow to households and businesses post-July one where we're just finalising negotiations with the states.
But looking at some of our investments in housing, and we know housing is such a big issue right across the country, with people, you know, whether you're renting, whether you're looking to buy, and essentially the role that the Commonwealth can play in that, you know, what's the role and how do we best leverage the capacity, we have through our various, you know, essentially accelerating supply for housing. So that was an important part of our considerations.
In terms of some of the specific measures, in in conjunction with the ones I've mentioned, the other place we had to find room was for aged care workers. And we had a Fair Work Commission case that came down and said, aged care workers have been undervalued and underpaid for too long. No surprises there. And the fact that it's about 90% of that workforce are women. And so, we found the largest investment actually in the Budget is to go and ensure that that wages increase flows to all aged care workers. And so that was a really important part of the Budget.
And I'm happy to talk more about some of that, if people are interested.
I think the other challenge we had to do when landing this Budget was calibrate it to the economic circumstances at the time, so you'll have heard in the last week or so, about some of the concerns around inflation.
That was and remains the biggest challenge in landing our Budget was how do we make the investments we need to make without adding to the inflation challenge that the Reserve Bank is trying to ease and put downward pressure on.
And so, you'll see that I think there's people that have said, we haven't done enough, there's people who said you've done too much.
Part of finding the right balance was to target and calibrate the investments so that they didn't add to inflation, but it still allowed us to ease some pressure where we could, and make investments where we needed, and where we needed to, things like skills, things like infrastructure, things like the energy transition, things like housing, which you know, we just need to get cracking on.
The other thing I just mentioned here is, you know, putting the Budget together when you've got the global economy in sort of such a state it's in as well. So, there's enormous global uncertainty and some challenges overseas that do impact on us, but for us, we've got a lot of good things going for us.
We've got very low unemployment. We've got the start of reasonable wages growth, which is really important, the first wages growth, serious wages growth we've been seeing in a decade. And we've got good prices for some of the things we sell overseas.
So, whilst there are challenges that we have to keep an eye on, our economy remains in reasonably good shape, and it has allowed us to forecast the surplus for this financial year.
It's also meant we've had quite significant upgrades to our revenue, of which we've banked about 82% going into budget repairs. So that goes back to the story I was saying earlier.
Now when I look at things for investments for far north Queensland, and Nita touched on a few of them, I think you'll see the value that the Albanese government places in the regions, in particular, we have put a pause on some of the infrastructure spending across the infrastructure portfolio whilst we work through and review some of the programs that we inherited.
But against that, you'll see that we're making investments in this region because we see it as so critical. So, the Marine Precinct again, the opportunity there to partner with the state government to really expand the capacity to invest in those common user facilities, to drive jobs, but also to set you up for the future, about the importance that this, your location and basically your strategic location will play in years to come. So, we recognise that we want to make sure that that gets moving as quickly as possible. And I know Nita has been working really closely with the Queensland Government on that to ensure that there aren't any delays to that project.
I think the university project is excellent. Again, you know, building up regions, ensuring that they've got the capability to train and upskill and offer courses that that young people want, young people want, but all students want, is really essential.
I come from Canberra, which has a pretty unique economy and that there's a lot of public servants, but I know the strength of our university drives a lot of economic activity across our city, a lot of businesses support the work of the universities. And as Canberra has grown into more of a university town, sort of the students that we're attracting drives other economic activity as well. So, they are not only had that really important investment in the knowledge side of the economy. It has flow on benefits for others.
So really exciting to see that, I consider myself suitably lobbied on the overall price or the investment that's needed there, and happy to work with Nita as that gets more, you know, progresses further.
I think the other opportunity and I’ll finish, so that, you know, we can take time for questions.
But the other real opportunity here is in the Defence Strategic Review, which I think you'll see the initial announcements around HMAS Cairns, but anyone who reads that document and sort of listens to what the Defence Minister is saying, I think you can be pretty assured of the critical role that Cairns, and this area will play, as we reposition our defence force into the recommended approach that the DSR did, which is essentially to change our posture into you know, greater capability which currently doesn't exist, but you know, your location here, the investments that will be made, in my estimate, because I've seen some of the work that's been done to date are really significant. And I again, the industries that will flow from that those decisions will be really positive as well. So, I think that's a great story. And I'm sure there's a number of businesses who are positioning and should be positioning alongside some of that work.
So, there's heaps in this Budget. I can go through it, in TAFE, and in health, and in the work with the states and territories that we're doing. I know there's a lot of interest in the energy transition and what we're doing there.
But it was a big piece of work to land, it's a big balance to try and get right. And to make sure our investments were going in the right places, but I feel that dealing with some of the legacy issues we've been dealing with, making sure we're getting the investments in areas where there's been under investment right.
Not spend too much, make sure that we didn't exacerbate the inflation challenge and repair the Budget. It's been it's good to get out of Canberra and start talking with people and listening to people about what they think. Because part of what I'm here to do is listen and take your feedback back to Canberra as well.
So, thank you very much for having me.
Media contact: Lisa Glenday 0403 931 209 | Gallagher.Media@finance.gov.au
Senator the Hon Katy Gallagher, Minister for Finance