SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for Women
Minister for the Public Service
Date: Wednesday, 8 March 2023
JOURNALIST: So firstly, interest rates - another blow for household budgets. Your reaction to that?
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Yeah, absolutely this latest interest rate rise will impact households, we know that, we're seeing that in the numbers. But we also see it in, you know, people's experiences. People are making difficult decisions around the kitchen table. The bank's got a job to do, the government's got a job to do, where we can, to ease some of that cost of living pressure without making inflation worse, which is what we're trying to do. We've also got to look at how we show a bit of restraint in the Budget so that we don't make that problem around inflation worse.
JOURNALIST: Looking at the RBA statement yesterday, do you think the end is in sight for these cash rate hikes?
GALLAGHER: I don't think it's particularly useful for me to speculate on the future decisions of the bank. I mean, people, they released their statement at the time for good reason. I know the Governor at some point will speak to that statement. It's appropriate they do. They should, you know, they're the people that should explain what their thinking is. Our job is to deal with what we can to make sure we're not making the inflation problem worse.
JOURNALIST: Do you hope for households' sake then, that the end might be in sight for these interest rate hikes?
GALLAGHER: Well look, I think we absolutely acknowledge the pressure on households. We get it. But we also acknowledge that not dealing with inflation, letting inflation run, get stuck or, you know, get worse, or stay around for too long is much worse. It's a much worse situation. So the bank's got a job to do. Their mandate sets that out. Our job is to make sure that we're not making the inflation problem worse and looking for ways we can provide that cost of living relief. So, childcare, cheaper medicines, our energy bill relief that will come in in this Budget, are all areas where we can do that - provide that assistance to households but not make the problem worse.
JOURNALIST: So basically, no cash handouts in this Budget?
GALLAGHER: Well we're looking at all the ways we can make a difference to people's cost of living pressures, we completely understand that it is really tough for households, but we also have to make sure that we're not fuelling inflation, because then that means it's devastating. It's devastating. I think we've forgotten what high inflation for long periods of time does to living standards. And so you know, the bank talks about this narrow path that they're following, in a sense some of those decisions for government are really difficult as well, as we navigate well, how can we make good investments that deal with some of those supply chain issues, provide cost of living relief, but don't actually fuel inflation at a time when we need to get it under control.
JOURNALIST: Some more unsettling reading in the newspapers this morning from that team of national security experts who say we're going to war with China in three years’ time. Now they're predicting that the Top End will be bombed by China. What’s the government's reaction to that?
GALLAGHER: Well, I think one of the main jobs for government is to make sure that the security and safety of Australians is front and centre. So you know, we've taken a very responsible attitude to how we deal with national security issues. You know, and we'll continue to do so. I'll let the journalists write stories that they want to write but I don't think it's again, particularly useful for me to comment on those stories, but I can assure Australians that we take the issue of national security and our country's sovereignty in relation to that extremely seriously and we've been working on it intensely since we were elected in May last year.
JOURNALIST: And just on the Voice actually, the Coalition voted against the referendum machinery bill yesterday in the lower house. Are you confident you can convince the Coalition to vote with you in the senate? And perhaps you can get them on board, the Liberal Party at least on board for the Yes campaign?
GALLAGHER: Well, we then we know there's plenty in the Coalition that would like to support the Voice. But you know, they're not being particularly constructive in the parliament. I mean, they’re saying no to everything. They're saying no in the House, and I don't think we can count on them in the Senate, on on pretty much any bill at the moment. And that's the attitude they're taking. They're sort of writing themselves out of any discussions or consultations with us by taking an approach where they say no to everything, they're saying no to housing support, they're saying no to jobs in manufacturing, they're saying no to pretty much everything that comes before them. And, you know, it requires us then to shift to the crossbench.
JOURNALIST: Apologies if you were asked already, but do you still believe Australia can avoid a recession?
GALLAGHER: Well, it's not. That's not the advice. You know, we're not. The advice to government is not that we will experience a recession. We'll update our forecasts in the Budget. You know, there's a lot of good things going for our economy, you know, our economy is growing, although it's moderating. But those forecasts are in line with the forecast Treasury outlined in the October budget. We've got good employment, relatively low unemployment, and we're getting good prices for the things that we export. So there are things that are happening in our economy that are challenging for economies elsewhere, like-minded economies elsewhere.
JOURNALIST: Just on national security. The submarines deal will likely be announced next week with Prime Minister likely traveling to the United States to make that announcement. I mean how important is it that we that we get this deal right? And you know, there's some figures being thrown around, it's going to cost way over $100 billion. Can we really afford that?
GALLAGHER: Well, I think again, I'll go to my previous answer. Our number one responsibility is to keep Australians safe. That means looking at how we resource national security responses, including defence, obviously, we have been working on AUKUS since we came to government. I'll leave others to make announcements about when further announcements might be, but I don't think it's any secret that that work has been intensifying. And we set a timetable for you know towards the end of the first quarter of this year. You know, but these are some of the challenges facing the government. We have to make some difficult decisions to find room in the Budget to pay for things that we know the country needs, and that’s not just defence and national security. It's other areas as well. Health, aged care, disability. These are the challenges as we go on repairing the Budget and sorting through the mess we got left by the previous government.
Lisa Glenday 0403 931 209 | Gallagher.Media@finance.gov.au