SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for the Public Service
Minister for Women
Date: Wednesday, 21 September 2022
ALEX CULLEN, HOST: Despite Treasurer Jim Chalmers noting a $50 billion windfall ahead of Labor's first Budget, it is not all good news with warnings the Budget boost is only temporary. For more we are joined by Finance Minister Katy Gallagher in Canberra. Katy, Good morning. Thank you for being with us. $50 billion – it is a big improvement. We should be celebrating surely, why downplay it?
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Good morning. Thanks for having me on. Look, it is welcome news, absolutely. I think the point that we are trying to make is that it is not a sustained improvement. What we are seeing is really one-off adjustments. Part of that is revenue that is coming in from largely higher commodity prices such as through company tax receipts, but also there is a range of spending programs which didn't get out the door in the last financial year and will flow through to the next financial year. So the message - certainly we welcome this improvement but going forward we still have a Budget heaving under enormous pressure both from a debt point of view, but also with spending demands and spending pressures and for spending decisions - you know, programs that haven't been funded in an ongoing sense. So there is all these different pressures coming and we have still got a big job to do.
CULLEN: Well cost of living pressures is the big one, isn't it Katy? $50 billion, it is a lot of money. Still, you are not feeling too generous. Surely you can spread the love, families across Australia are hurting?
GALLAGHER: Absolutely, and we are more than aware of that. All of our election policies really were going to deal and help deal with this in the long-term sense. So our policies around cheaper medicines, cheaper child care, investment in skills. These are all about making those investments to take some of the pressure off household budgets. But I would also say that improvement - about half of it was improvements in revenue. You know, that still means we are in quite significant deficits. We were forecasting a deficit in the order of $80 billion. Now it will come in just over $30 billion for the end of the last financial year. So it is not as if the Budget is in surplus or that there is extra money lying around. We are still borrowing a lot, we still have $1 trillion of debt to manage and these are some of the pressures that we have to work through. But absolutely those policies will be implemented in our October Budget and will provide some cost of living relief for families going forward.
CULLEN: Yes, let's hope. Hey, the Opposition think you are downplaying this windfall because you can't admit you inherited a strong economy from the previous government. What is your response to that?
GALLAGHER: Well, in terms of the Budget Settings – I heard the Shadow Treasurer's comments yesterday, it is just not true. We have a massive debt burden. We have got deficits for as far as the eye can see. We have got programs like aged care, NDIS, defence, even servicing the debt, health care all coming forward with extra spending demands and we need to manage that. So we are not - we will not accept that we inherited a Budget in a good state. We didn't and we are trying to manage those issues now. And you will see some of those decisions in the October Budget.
CULLEN: Child care is one of the big ones. I know the child care subsidy is coming - well, it is coming soon. Well, next July. But is there a chance that you could bring it forward. I know the NSW Treasurer Matt Keane wants you to bring that forward to July, that child care subsidy. Will you do that?
GALLAGHER: No, we won't. The decision we have taken, it was part of our election commitment, was to have that introduced in July. We think this is really the earliest opportunity to get that program running and part of it is making sure that we have got the systems in place. This is a massive $5 billion investment in early education and care to make sure that childcare is cheaper for families and that women in particular can work extra hours if they want to. But we need to make sure that we can roll that out properly and smoothly and July is the opportunity to do that. So it is coming, it will come in on the 1st of July next year and it will be a big improvement. It will make childcare cheaper for 97% of families using the system.
CULLEN: Okay, we will wait for that. And a poll in Nine newspapers this morning revealing just 46% of Australians now support a republic. What does that do to Labor's plans for Australia to become a republic, or a referendum, at least.
GALLAGHER: Well, I'm sure this is going to be a debate that happens and occurs over the next few years. I have no doubt about that. You know, I have no - it is no surprise to me that people are having strong views around the monarchy, particularly as we have just witnessed a very, I guess, two weeks of pretty intense coverage and feelings, outpouring of feelings for Queen Elizabeth II. So the results didn't really surprise me but I still think that there will be naturally a debate about Australia and our constitutional arrangements going forward. I think that can be done respectfully and openly and people will have different views about it.
CULLEN: Minister, thanks for being with us this morning.
GALLAGHER: Thanks for having me.
Pat Cronan 0432 758 224 | Gallagher.Media@finance.gov.au