SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for the Public Service
Minister for Women
Date: Thursday, 4 May 2023
LAURA TINGLE, HOST: Australia is experiencing one of its biggest ever housing crises. If the government has committed less money to a housing fund to do something about that than it's committed to the National Manufacturing Reconstruction Fund, does the government really understand how significant a crisis we have on our hands and should you in the Budget on Tuesday be putting more money into that fund?
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Hi, Laura, and thanks for having me on tonight. Well, you're absolutely correct around the issues facing housing in this country and we are acutely aware of those. I mean, one of the issues we're dealing with here is a bit of catch up. The Commonwealth had kind of vacated the field in terms of social and affordable housing for the last 10 years. We're coming back, getting back to the table with the states and territories and wanting to work with them on how we increase supply because the levers available to the Commonwealth really, about the ways to increase supply of housing across Australia. So the Housing Australia Future Fund was a commitment we made in the election. It's, you know, a bill that's stuck in the Senate at the moment, we'd like to get that through. We'd like to get it up and running. But it isn't the only intervention that we are doing. You know, we've got NIFIC which is already flowing funds out into social and affordable housing. There was one announced in Canberra this week with the Minister, which is really great for women. But we've also increasing the liability cap for NIFIC to go up an additional $2 billion. So it can, again, offer low interest loans into projects for social and affordable housing. So I mean, the work isn't ever done. But we've got a range of interventions, HAFF is one of them. And we are absolutely taking it seriously.
TINGLE: Well since it was originally announced, HAFF which is the housing fund, interest rates have gone up. So the amount of money available, in a way, is reduced. And you know, it's not really delivering the intent in those circumstances of your original commitments. It's also supposed to release around $500 million a year. But that's not indexed, which means $500 million a year this year will not be the same as in 10 years. Now, these are issues that the Independent Senator David Pocock has raised and he seems to have a point doesn't he if you're trying to maximise the bang for your buck?
GALLAGHER: Well, with the Housing Australia Future Fund we want to get it up and running. That's the idea, at this point we're not even in that position. And I think it is frustrating where we have, essentially, people who are for more investment in housing, saying "well, we're not going to let this fund through, which is about more investment in housing until it's exactly the way that we think it should be or put in more money." And people have said to me, why don't you put more money in the HAFF, but we can't get the $10 billion you know, investment that we want to make through the Parliament yet. So, I think a good start, frankly, would be to actually try and get the support for this bill so that we can get it up and running and make those investments and then if over a time, you know, let's see how it works. I mean, this is a significant investment in taxpayers' funds. We know that the funds that have been set up under the Future Fund have returned strong returns and have been able to make disbursements but at this point, you know, the government's trying to get this thing up and running just to begin with, let alone talk about more money or indexing payments down the track. We can't even get it established. And I think that's the first job. We remain open, of course, to discuss with the crossbench ideas about how to increase investment in housing, we'll continue those discussions. I would repeat that HAFF is one measure we want to look at. There are other measures that the government's working on including states and territories around planning reform, around renters rights. And I think the Commonwealth is fairly and squarely back at the housing debate table, where we've been absent for at least a decade.
TINGLE: Doesn't announcing spending over $300 million on football stadium in Tasmania, more than half of what the government is planning to spend on housing each year seem just a little tin-eared. I mean, particularly in a state with an extreme housing crisis.
GALLAGHER: Well, I think the announcement you refer to, Laura, I mean, when you look at the detail of it, it is around creating a precinct around a stadium and you've seen around the world there's plenty of examples where there's been some excellent outcomes built around, you know, prominent lands such as the one at Hobart that can deliver really good outcomes from an urban city planning point of view. And our —
TINGLE: When did the precinct for housing actually get added into this scheme, Minister?
GALLAGHER: So I think from my understanding, and I've not been as close to it as perhaps, Catherine King and the Prime Minister have, but my understanding was there was an initial approach with the Tasmanian Government. There's been further work done in the last few months, but the Commonwealth's investment is really about how we maximise the opportunities on that precinct including social and affordable housing as a part of it. Wharf upgrades, a whole range of things that can really activate and deliver benefits to the community but we understand it's not, you don't see it in isolation as a stadium. There are other social and community benefits that can be driven around a project like this and we intend and that's certainly part of the requirements of using the Commonwealth investment.
TINGLE: Analysis from Deloitte suggests your Budget on Tuesday will return a surplus for the first time in 15 years. Can you confirm that?
GALLAGHER: I think Jim and I have been saying for some time, in a range of interviews in the last few months that the near term will see a significant improvement in upgrades to the Budget. That's welcome. It's needed. It'll assist us with our fiscal strategy in terms of repairing the Budget, but the out years, the medium term, the pressures on the Budget remain and the Budget remains in a state of significant pressure, you know, with those pressures that are coming towards the Budget are increasing, not decreasing. And so the fiscal strategy, repair work, you know, keeping a close eye on spending, making sure there's spending restraint is still a critical part of the work that's been before the ERC and will remain so in future budgets.
TINGLE: I'm told that with the final forecasts showing a huge surge in tax collections that senior ministers have committed to around $20 billion extra spending in the last couple of days. Does that suggest a big surplus would be a bad look for a Labor Government that's being so parsimonious in its approach to welfare?
GALLAGHER: Well, I don't think we look at things in terms of presentation, and I don't know where that commentary is coming from, but I would say that the fundamentals of how we approach this Budget task, which started in October, we're continuing it in May, haven't changed. I mean, the pressures are there in terms of, you know, further expenditure on the Budget. Sure, everyone's got an idea of how to spend and some of its needed and warranted. We're also cleaning up the mess that we were left by former government and terminating programs and the booby traps that exist in the Budget. We'll clean up those. We've got an inflation challenge. So we've got to make sure that we're not adding you know, adding any pressure on the inflation and we're working hand in hand with the Reserve Bank. And we've got to look at the growth story. What are we doing about investments to drive the productive side of the economy? So all of that was there at the beginning. It remains there and I think on Budget night you'll see the culmination of hundreds, if not thousands of decisions that try to get that balance right.
TINGLE: While visiting defence facilities in the UK, the PM has been talking about the job creation that's going to flow from the AUKUS defence spend. But these are basically jobs for blokes. Now you're the Minister for Women, what are you doing to boost job opportunities for women in the next few days?
GALLAGHER: No, I don't accept that those defence jobs are just jobs for blokes and you know, certainly as Minister for Women I'll be keeping a very close eye and have been on the job opportunities that are presented in the Budget. Obviously, we've had an announcement today about aged care and increases for those workers. More than 90% of those workers are women undervalued, underpaid for a long period of time, we're making and have found room, the investments to make sure we can fully fund those pay rises and more. But there are you know, when you look at the kind of the opportunities in digital, in clean energy, in the care economy, there are huge opportunities for women and I think the challenge for me as Minister for Women, but the Government as a whole is to make sure that women get a fair crack at those at the beginning and that we don't lose opportunities. And we're very focused on that, whether it be through skills and how we manage that or discussions with the states and territories and looking at how we tailor some of the programs. But I can say, Laura, that this will be a very strong Budget for women. It has women front and centre of our decision making and I think when people see the Budget as a whole, they'll be hard pressed to find another Budget that's done as much as we have done in October and what we will do in May to support lifting women and driving economic equality for women across the country.
TINGLE: Finally, the Prime Minister has said repeatedly that his ambition and that of the Government is that no one will be left behind and that everyone will get an opportunity. What does that mean in practice if welfare payments leave millions of Australians living under the poverty line?
GALLAGHER: The Budget will have a very significant cost of living package and that cost of living package will be targeted to those most in need. And I mean, people will have to wait till Tuesday, we're in that very awkward stage of the Budget where decisions have been made but haven't been announced. But cost of living was front and centre in some of our thinking from the get go and —
TINGLE: Is your ambition, though, to actually over the course of your time in government to try to lift people out of poverty?
GALLAGHER: Well, the Prime Minister has been clear in Opposition and in Government that every year we would look at the payments, look at what can be done and in the Budget you'll see the balance of those decisions of what is reasonable, affordable and how we've made room for those investments in the Budget. And you know, I think people need to see it as a whole. It's not just on the payment side. It's also on the investments that are made in programs or support people who are disadvantaged, to live to their full potential. So I think people need to wait and see. The Budget obviously isn't one decision in isolation about one payment, it's a lot of decisions across the board and I hope that when people see it in its entirety they'll see, I guess, some of the balancing up we've had to do, but that we've focused on those most in need.
TINGLE: Katy Gallagher, thanks so much for your time tonight.
Lisa Glenday 0403 931 209 | Gallagher.Media@finance.gov.au