SENATOR THE HON GALLAGHER
Minister for Finance
Senator for the Australian Capital Territory
Date: Wednesday, 25 May 2022
SENATOR KATY GALLAGHER, MINISTER FOR FINANCE: Thanks for having me on Jane.
NORMAN: I wanted to ask you, before we get on to money matters, just about some health advice that ATAGI has provided to the government on the COVID-19 booster shots. What has the government chosen to do?
GALLAGHER: Yeah so, the ATAGI advice has changed to basically expand the fourth dose population so people who are eligible for a fourth dose, which is now going to include people who are aged between 16 and 64, who have a medical condition or a health condition that means they're immunocompromised or people who have a disability. So it's a wider group than was what was being offered before. And for those people, they should enquire either with their GP or go online and look at the advice. But that should kick in on Monday.
NORMAN: All right. So it's about one and a half million extra Australians. This is all, of course, because we're heading into winter. Are you anticipating any further advice about the rest of the population, those between perhaps 16 and 64, who identify as pretty healthy?
GALLAGHER: Well, at the moment that's not - the ATAGI advice is not to extend to a fourth dose. And I think what they're saying is that the evidence is we really need to limit or protect those who might get severe disease from COVID rather than a generally healthy population who is vaccinated and up to date with their vaccinations. So if people aren't up to date and didn't get their booster, they should certainly do that. But this is just for that fourth dose. Essentially, the winter dose and ATAGI will keep this matter under review. I guess the only other thing I'd say is if the flu virus is out there and so people should, you know, be thinking about getting the flu shot as well. We are encouraging that.
NORMAN: Good advice. Alright, well, let's turn to your portfolio, Finance. You've been in budget briefings since you were basically elected on Saturday. And in your press conference with Jim Chalmers, you seem to suggest that there might be some landmines that the previous government has left you in the budget. Can you expand on that?
GALLAGHER: Well, we're working through all of that at the moment. But, the briefings are bringing us up to speed with the pressure that the budget is under. It's certainly a pretty dire set of circumstances that we're inheriting with very high debt, significant deficits and lots of pressure on the budget. So we want to go through it line by line, identify where those pressures are. Look at some of the decisions that the previous government has made. Look for some of those waste and rorts that we've talked about during the campaign and see where we can either reprioritise or reallocate or return money back to the budget. You know, there's a significant budget repair job underway that needs to happen, but we also need to deliver on our commitments to the Australian people as well.
NORMAN: Sure, but I guess we knew all of that before Saturday. So what is unexpected that you have learned from these briefings?
GALLAGHER: Well, we'll work through those. Obviously, we've said we're going to have a budget in October, and I think you'll see all of the decisions come through there. But we need to to work through the details. We're in early stages of briefings now, but there's no doubt the budget's under significant pressure. There's competing areas of growth in the budget and there's areas where we probably could reallocate and re-use money. But there's a lot in that, Jane and I'm not trying to deliberately not answer your question. I'm just saying, because we will be upfront and honest with people about the state of the budget, but it's early days and we need to work through that carefully.
NORMAN: And of course it is a budget that you are inheriting from the previous government. But are we talking about a budget black hole here that's been identified?
GALLAGHER: Well, again, you know, when we've come to terms with everything that we've been processing this week, I mean, Jim's been having his Treasury briefings. I've been having my Finance ones. We need to brief the cabinet and we need to go through those processes. So we're going to do it methodically and with a good process. But you'll certainly see by October some of those results of both the audit and how we're going to deliver on our commitments and look at the budget repair task.
NORMAN: So I guess the reason I'm sort of asking about this sort of unexpected pressure question is because the independent PEFO that was released in April effectively backed in the figures that were in the government's budget. So I'm just wondering what has sort of changed between April and now that we didn't know about?
GALLAGHER: Well, I think PEFO reflects government decisions and its impact on the bottom line. So we are working through that. It's, you know, government's decisions that may or may not have been taken and some of the results of our election commitments, there's a lot in that to unpick, but we're going to be honest with people. We're not going to run the budget like it's a machine, a political machine. It's there to serve the Australian people, to make the right investments, to be fiscally responsible. But to be honest about the challenges that are up ahead and we'll work through that. We'll take time to brief the cabinet, brief the Prime Minister, of course, and then release that in terms in a normal budget way.
NORMAN: Okay. On the savings side of things, we've already flagged that Labor will go after labour hire firms in the public service to try and cut spending on labour hire. Isn't this kind of just low hanging fruit, though?
GALLAGHER: Well, we think there can be significant savings there.
NORMAN: What kind of savings?
GALLAGHER: Well, we outlined in the budget that we would set a target of $3 billion over the forward estimates. So that's not insignificant.
NORMAN: Is that just labour hire firms?
GALLAGHER: No, that's a combination of consultants, contractors and labour hire. But there are large - I mean, the labour force component of the APS is pretty significant these days. And several departments, Department of Veterans Affairs, Aged Care and Quality Commission, they have large labour hire, you know up to a quarter to 30% of their workforce. Now we know from work we did in Opposition that often comes with a 30% premium on top of just employing a permanent public servant. And we know those jobs are permanent, so we think that there can be savings made there and reinvested, part of it reinvested back into making sure we've got permanent public servants doing those permanent jobs, but also looking at how we use our resources efficiently as well.
NORMAN: So both labour hire firms and consultancies, you'll be going after that at the same time.
GALLAGHER: Yeah, but it's in a staged way. We're trimming spending. I mean, let's be real. They're spending, you know, I think it's around $5 billion per year that's spent under these different times of external labour. We are looking at making 10% savings, so we're not certainly saying or anyone suggesting that you wouldn't have those arrangements. But we think there's some rebalancing that needs to go on and we would start by taking a 10% save, but also looking at how we reinvest additionally back into the public service. So it's not - like it is definitely trimming spending, but it's also about rebalancing and building up capability in the APS.
NORMAN: Because when we look at the big consulting firms, let's say the big five since about July last year, the Commonwealth has signed $2.7 billion worth of contracts with them. So these are big bucks we're talking about, but some of them are also multi-year contracts. So when you start auditing them, are you open to cancelling contracts that have already been signed with consultancy firms?
GALLAGHER: I think where there are contracts in place, that wouldn't be the approach. I mean, you know, you have to have some certainty and stability that the Commonwealth is a reasonable authority to engage with. And I think if you went around ripping up contracts that wouldn't present that. So we're going to be sensible, which is why we're starting with a trimming of it in the order of 10%, but there are large amounts of money and we want to run a ruler over it. Again, there's a lot of nondiscretionary spending in the Commonwealth budget, you know, things that just are paid out through payments particularly. So you do have to look at the it's a smaller but it's an important sort of nondiscretionary side where you can, or sorry, where discretionary side, I should say, where you can make small adjustments that help with budget repair, which is a big job that's going to be on my desk.
NORMAN: Okay, let's turn to wages. I just wanted to clarify with you, will the government be making a submission to the Fair Work Commission's minimum wage case?
GALLAGHER: Yes, we will. And we're clear about that in the campaign that case, that hearings are underway. You know, we're quite late into the process. The previous government had made a submission. We think that can be enhanced and we would be doing that. But that's a job for a range of ministers once they are sworn in.
NORMAN: And will that nominate a percentage increase that you would like to see of the minimum wage? Anthony Albanese of course has said that he has said he wants it to be in line with inflation. That's 5.1%. Will that figure be in your submission?
GALLAGHER: Well, those decisions, I mean the final decision, the form, the submission and the form it takes will need to be finalised once all the minister's relevant ministers. I don't want to get ahead of it. We don't have, we've got an IR minister that needs to be part of that discussion. The Prime Minister needs to be part of it, obviously, Jim and I need to be part of it. We have said we want to make a submission and we have said we want particularly low income workers to keep up with the cost of living. They're going backwards at the moment. So that's the approach we would take to the submission. But to be fair, I'd like my colleagues involved in that before saying what's going to be in it or not.
NORMAN: Probably a safer start at the start of this government. But let's just finish off with the Biloela family of course, the Tamil family who is currently in Perth community detention. Labor has promised to reunite the family with the community in Biloela in Queensland. Jim Chalmers said he'd been making some strong progress there. How soon could this family be shifted back to Queensland?
GALLAGHER: Well we hope really soon.
NORMAN: We're talking days or weeks.
GALLAGHER: Well that's again, it's not before me. I mean Jim as the interim Immigration Minister has to consider and weigh up a range of things and he's being advised on that by the Department of Home Affairs, appropriately. He also indicated he wants to discuss it with the Prime Minister, but we were clear that we wanted the Murugappan family to return to Biloela. We've been clear about that for some time and you know, week one or first few days. We're working hard to deliver that.
NORMAN: Would it be something that you'd wait for the permanent home affairs minister once they're sworn in next week to actually sign off on? Because as I understand it, the minister has discretion here. They just need to sign off on this move.
GALLAGHER: Well, I think Jim's in charge of that, and I know he'll be discussing it with relevant colleagues. But this was a clear priority for us. The family has waited long enough. I think we're really keen and I know the Biloela community is really keen to get them home. It's been a long time coming and I think it'd be a really lovely day when it eventually does. So I think, you know, from our point of view, the sooner it can happen, the better. But there's a couple of further conversations that need to happen.
NORMAN: All right, Katy Gallagher, thanks for your time.
GALLAGHER: Thanks very much, Jane.
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