SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for Women
Minister for the Public Service
Date: Tuesday, 4 April 2023
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Thanks for coming out, and I should say at the beginning, I've just left an ERC meeting. So it's just interrupted briefly, so I'll have to be very quick today as I need to head back into that meeting. But, look, today's decision by the Reserve Bank Board to keep interest rates unchanged at 3.6% will come as welcome news to a lot of Australian households and businesses right around the country, and we welcome today's decision by the Reserve Bank. But we know that for many Australians and businesses are struggling with some of those cost of living pressures, higher mortgage payments and things like that. So today's decision was certainly welcome. But we understand for many Australians and businesses, those cost of living pressures remain real. I think today's decision follows early signs that inflation has likely passed its peak and is beginning to moderate. But we know that it will remain higher than we like for longer than we like and that's why addressing inflation was a key priority in the October Budget, it remains a key priority as we finalise decisions in the Budget that will be handed down in May. I think that's why we've also focused on those sensible cost of living relief measures we can provide without adding to the inflation problem. So our measures in cheaper childcare, cheaper medicine, some of the work we're doing on the energy price rebates and, of course, our support for getting wages moving again. But I think everyone will recognise that it will take more than one Budget to deal with the inflation challenge that we've seen in our economy, which has been fuelled by some of those global price shocks, the war in Ukraine and those supply chain disruptions that we have been talking about for some time. So the decision today, whilst it's welcome news, and we accept that for Australians and businesses that they will welcome this news, it doesn't change the Government's plan, the work that we're doing to make sure that the decisions we take in the Budget provide cost of living relief, where we can make a meaningful difference without adding to the inflation challenge. So literally, the discussions and the challenges facing the economy and the Budget that are actually those decisions that we're right in the thick of right now. Our plan remains unchanged. Happy to take some questions.
JOURNALIST: Minister, the RBA Governor in his statement flagged that the RBA continues to be concerned about the possibility of a wage price spiral and we've got the wage case looming, and the Government has voiced its support for an increase in the minimum wage. Are you concerned about the possibility of contributing to wage pressures?
GALLAGHER: Well, I think if, and I've had a quick look at the statement by the Governor. And I think they have said for some time that they would keep an eye on wages growth. I mean, I think that's obviously something that they will do and continue to do. But I think if you look at the list of contributors to inflation, wages are not one of them and we can list a whole range of others. And, you know, we want to see wages moving again, but we don't believe there's any evidence of a wage price spiral. The Bank's obviously going to keep an eye on that, as they should. But we certainly believe and, very supportive of the position we took, obviously, in our wage submission to ensure that those on the lowest wages, people on those award rates, don't go backwards. We know the cost of living pressures for those workers, those families, are real and our wages submission reflected that. We want to make sure that they don't fall behind when we're dealing with some of the cost of living pressures. And that's why the Budget will work hand in hand with that wages submission, really, about what are the other opportunities where we can take some of the pressure off without adding to the inflation challenge. I guess the other two areas that we're focused on is how we deal with the revenue upgrades to go back into repairing the Budget and deal with some of the legacy and the cleaning up the mess issues that we continue to do and uncovering the Budget process as we finalise those decisions.
JOURNALIST: Minister, we're seeing inflation ease at the moment. How long do you reckon it will take before it hits that target band and we can see rates either plateau for a while longer or start to come down and take more pressure off families?
GALLAGHER: Well, we outlined our inflation projections in the Budget. Obviously, they will be updated in the May Budget, but we do see that coming down over the next 12 to 18 months. I mean, obviously decisions for the Bank, you know, about future rate increases or decisions they take are a matter for them.
JOURNALIST: Minister, Treasury Secretary Steven Kennedy has said that fiscal policy is neutral. So it's not adding to inflation, but it's not subtracting from it. Should the Federal Government actually be adopting a contractionary stance, and either cutting spending more or raising taxes more than it's planning to get inflation back to target quicker? The RBA says it's not getting there until 2025.
GALLAGHER: Well, I mean, these are some of the challenges and some of the decisions that we're working through right now through the ERC process. I mean, fundamentally, we acknowledge that inflation is the key challenge in the economy, and getting that back to target range is a priority. So the decisions we take and the decisions that we're in the midst of right now, I mean, we're absolutely focused on not making the inflation problem worse. Obviously, we are looking at spending restraint. We've got a Budget under enormous stress. I, you know, I say that with emphasis, enormous stress, with the pressures coming towards the Budget are accelerating not reducing. So when people say, "oh, cut this and cut that", you know, I'm going through it line by line, these are not easy decisions to take. A lot of Commonwealth expenditure is money that is demand-driven through payments, through, say, the Medicare system, through payments to the states and territories. So actually, when you reduce it down to the discretionary amount to the Commonwealth, we are talking about a much smaller proportion of the Budget, but we are, you know, looking at sensible savings where we can. I mean, we are fiscally responsible, we're not going to go out and you know, fund everything that all ministers are coming forward with. We want to show restraint, we want to look at what we're doing with revenue upgrades and how we can put that, invest that back into the Budget. But the pressures on the Budget are real. And then you know, it's not frivolous programs or anything, they're like the pressures that the Budget are under and the pressures that are coming forward are all for very worthy, worthy measures. So we'll be responsible, we won't add to inflation. We look for sensible savings where we can, we want to repair the Budget over time. But we are also cleaning up a decade of bad budgeting and messes and terminating measures and a whole range of dodgy practices that are just adding to the pressure we face.
JOURNALIST: Responsible cost of living relief. Does that mean that the May Budget measures are going to be targeted particularly at the most needy, such as single parents and renters?
GALLAGHER: Well, we're working through those decisions around the Budget now, but I can tell you that there's a focus on how do we provide sensible cost of living relief, obviously vulnerable households are front of mind for a Labor government – I don't think that's any secret. We will have the $1.5 billion that's been provided in the, or announced, will flow through the Budget through those arrangements for energy rebates as well. But those decisions are being made literally in real-time. Hopefully not while I'm out of the room, though.
JOURNALIST: Senator, on TikTok, two questions. Why is it a risk to have the app on government-issued phones? And secondly, if it's a risk to have TikTok on government-issued phones, is it a risk too for the general population?
GALLAGHER: Look, this has been informed by security agencies' advice, on work that's been done and provided to Government. So, that's the decision we've taken, is around government-issued devices. Obviously, we're always clear with people that they should be aware of risks about particular apps, social media, etcetera. And there is a whole lot of information that people can access about that if they choose to online through eSafety and through, you know, some other Government websites, but the decision has been taken about government-issued devices based on that advice from the security agencies.
JOURNALIST: You're a mother, are you happy with your children being on TikTok?
GALLAGHER: [Laughs] Well, I don't want to show my hand here. We have had numerous discussions around our table about the appropriate use of social media apps like every other parent, I imagine, with children over the age of 10 or 11. I'm like every other parent, yeah.
JOURNALIST: I know you're pressed for time. The Medicare report came out today and that was quite damning. $3 billion, up to $3 billion being wasted. What can the Government do to kind of get back some of that money?
GALLAGHER: Yeah, so I would like to begin, you know, I spent a lot of years working in the health area. So I would like to start by acknowledging that health practitioners overwhelmingly do the right thing. But where we do see instances of errors, mistakes being made, inappropriate billing for whatever reason, obviously, we have got to ensure that we are returning that money to Budget. We can't have a situation where we have a big part of the Budget having, you know, spending that isn't necessary because there's more than enough that needs to go back into Medicare. So, the Health Minister obviously got this report, he commissioned the report, he's got the report, he's now going to work through those recommendations about how to ensure that we, every dollar that's invested into Medicare is actually going to the right place. But I do want to acknowledge the GPs in particular are under a huge amount of stress at the moment. Primary Care is in crisis. And, you know, they do an incredible job keeping people out of hospital and keeping people well, but obviously, we are going to work through this and, you know, the financial implications of this to make sure that the money is going where it needs to.
JOURNALIST: Minister, just a quick question on TikTok, will consultants contracted by the Government be required to remove TikTok from their work devices?
GALLAGHER: I'd have to come back to you on that. I would say the rule that, the area that we have control over, is on government-issued devices. So there would be some contractors that would have government-issued devices as part of their work and of course that would apply to them. Anything further, I would have to come back to you on with advice from the Attorney-General but certainly if they are using, you know, any device that's issued by the Government or connected to the Government facilities, it would be required to be off. Thank you. I've got to go, honestly, we've got no Treasurer and no Finance Minister in the room, that makes me very nervous.