SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for the Public Service
Minister for Women
Date: Wednesday, 26 October 2022
CRAIG ZONCA, HOST: Senator Katy Gallagher is the Federal Finance Minister. Senator, good morning to you.
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE : Good morning.
ZONCA: Can we just start with power prices – up over 50% in the next two years. Didn't you promise during the election campaign to bring the cost of power down?
GALLAGHER: We will be making these investments in renewable energy, which you'll see in the Budget. We know that the cheapest form of energy is renewables, so getting cracking on that is really important. We've obviously got a war in Ukraine. The situation has changed since the election and we're dealing with the effects of that. You know, Australia is not immune to this global energy shock and we're doing what we can. There's more work to be done in this space about how we take some of the pressure off households with these expected increases in energy prices.
ZONCA: But there's no denying it. Our bills are going to go up before they go down, aren't they?
GALLAGHER: Well, the information that we have available to us is, yes. I mean, there was a 20% increase in this financial year that was known by the previous government but not talked about. So we're dealing with that. And then there's an expected increase just over 30% for next year. So combined that's huge increases in energy prices. It really makes it difficult for businesses and households. So getting moving on our renewable energy plan is absolutely essential, getting the grid working so that it can take more renewables into it and we’ll put downward pressure on prices. And then we're going to have to look, and the Treasurer is leading this work, about what else can be done to manage or address some of these sharp increases that are being forecast.
ZONCA: But is that then a broken promise? You're talking about slashing power bills by $275 a year. Our next few for the next couple of years are certainly going to be much higher than lower.
GALLAGHER: And the commitment we took to the election was to have that downward pressure by 2025. That's why we are putting all of the effort into now. It means the work that we're doing around powering Australia becomes even more important, and getting it done as fast as we can because that is the way to cheaper household energy prices and cheaper energy prices for business. But, the situation has changed. We didn't expect this war in Ukraine and the impact that that's having on global energy prices is affecting Australia and so that's why we have to do continued work and effort into what else can be done to put downward pressure in the short term on those big increases that were forecast in the Budget.
LORETTA RYAN, HOST: So, what else can be done?
GALLAGHER: Well, I think we're going to have a look at all options. Jim Chalmers is in charge of the ministerial working group on this. We're taking advice from the ACCC. We'll take advice from the energy regulator and from AEMO about what can be done. But obviously more has to be done because these increases are really, really sharp and unexpected and the Government's got to work on making sure we're doing everything we can to address them and I think the Australian people would expect that. We don't have all the answers now, but we're working on it and working really hard on it. This is probably the most significant issue, now that we've got the Budget done on our desks, of how do we deal with these increased energy prices.
ZONCA: The Federal Finance Minister, Katy Gallagher, with you here on ABC Radio Brisbane. A question comes from Beverly, North of the city, who says what assistance will be given to seniors not necessarily on pensions but on very low incomes who are really feeling the impact of these cost of living pressures? What's in the Budget for someone like Beverly?
GALLAGHER: Well, I think the one that you'll see most immediately is putting downward pressure or reducing the cost of medicines. So, where we're trying to put in cost of living relief, it is in childcare, paid parental leave (PPL), which obviously wouldn't necessarily help in this situation, but cheaper medicines, looking at our affordable housing and getting wages moving again. That really is the most responsible way of dealing with some of these cost of living pressures in an environment where we've got such high inflation. What we can't do, and this is quite, this is hard when people's cost of living pressures are going up, what we can’t do is just sort of spray money around in a world where we've got this high inflation problem. Because in the short term that could make the inflation problem worse, which would make interest rates increase faster, and work against the work of the Reserve Bank. So, we are having to show some restraint, and you'll see that in this Budget because we can't do things that will make the economic challenges that we're currently experiencing worse.
RYAN: There has been some help for childcare and for parents. When will they feel the benefits of that?
GALLAGHER: Well, the childcare increase and the PPL will come in in July next year. Again, we're trying to stage this so that we're not exacerbating any inflation issue in the short term and also making sure our systems are equipped to make sure we can roll out that extra assistance. So that will kick-in in July, and that work's underway, and it's an important, significant investment. If you put those two together, that's a big part of the additional spend in this Budget. Over $5 billion going into the long-term structural change that we need in supporting families with the costs of having young kids and making choices about how they work, and what parent does what in terms of caring for the child. So, July next year, but it's a massive change and a massive step up in assistance for families in that regard.
ZONCA: What I’ll also ask about – the National Housing Accord that the Treasurer stood up and told Parliament about as part of his Budget speech, how is that going to make houses more affordable, not just here in Queensland but around the country, Senator?
GALLAGHER: So, the Housing Accord's a really important agreement that we've reached between states, territories, local government. We've got the superannuation industry at the table as well looking, and this is a really important one because it deals with a slightly different area than we've traditionally been involved in. So, we've got investments in social housing through the Housing Australia Future Fund and then obviously there's some programs around those people who are fortunate enough to buy housing, and then there's this middle bit which is really about affordable rentals and we've seen rental prices increase everywhere. So, this is about how we make that stack up for super to invest in it, how we line up some of those planning changes to make sure the land is available and that can be brought to the table. And then the Commonwealth's role in making sure that the superannuation industry, you know, it stacks up from their member's point of view about getting involved and making those investments. So, it's really targeting that affordable rental section of the market and I think it's a real opportunity. We've got an aspirational target of a million houses over five years. We think that is achievable if everybody does a little bit more than we're currently doing. That is something that we can deliver.
RYAN: Five years. It's still a long time before any real relief for people, isn't it?
GALLAGHER: Well, I think the other issue in housing at the moment, and people will know this if they've been looking to get any work done or build a house, is we do have some issues around labour and around supply of materials. And so this has been timed to deal with some of that, to come in at a point where we expect some of those issues to be resolved. I think the timing of it is important, but actually the more structural and system change is that we're actually pulling everyone together and acknowledging that every government and the private sector can play a role here to deliver more supply at a more affordable end for the Australian community because we know housing is just such a massive issue.
ZONCA: It certainly is in Queensland right now and a similar story in other states and territories. Senator, thanks for your time today.
GALLAGHER: Thanks so much for having me on.
Pat Cronan 0432 758 224 | Gallagher.Media@finance.gov.au