SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for the Public Service
Minister for Women
Date: Monday, 8 May 2023
DAVID LIPSON, HOST: Katy Gallagher, thanks for your time. You're spending $14.6 billion on cost of living relief over four years. How much of that will be delivered immediately?
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Well, there's a range of measures in the package, and some of it will flow immediately. Some will have implementation arrangements around it. But we are very conscious of making sure we can support people across the country with cost of living measures as soon as possible. So you'll see the full details of that on Tuesday night. But cost of living has been central to our thinking, as has been dealing with the inflation challenge in the economy when we've been finalising this Budget.
LIPSON: $1.5 billion of that is for energy bill relief. What about unemployment benefits, though? Will there be an across the board increase for young and old?
GALLAGHER: Well, you'll have to wait till Tuesday night. We are in this very annoying kind of stage where people are wanting to know what's in the Budget, but it doesn't get handed down ‘till Tuesday night. You know, the Prime Minister has made no secret of the fact that every Budget, that we do will be mindful of payments and looking at where we can support people who are living on payments with sensible and affordable cost of living relief. But you'll have to wait ‘till Tuesday. We're aware of the advocacy around it, around a whole range of things, frankly, in this Budget, and I think you'll see a sensible response across the board.
LIPSON: When the Treasurer was asked about this yesterday, he said that the cost of living relief package will prioritise the most vulnerable and apply to more than one age cohort. That's in response to reports, not confirmed by the Government, but reports that over 55s will get an increase to JobSeeker. So which age cohorts do you consider to be the most vulnerable?
GALLAGHER: Well, I think you'll see from the measures when they're announced and you'll see them in their entirety, that what we've tried to do is find a balance where we can make, you know, sensible and affordable investments across the board. But and that's not restricted if you, to the subject of payments. I mean, if you look at some of the other measures that we've already announced around cheaper medicines, we've got cheaper childcare coming in on the 1st of July. You know, these, these measures seen in conjunction with the Budget show that we've been mindful about pressures across the board.
LIPSON: The catchcry for this Budget appears to be cost of living relief that doesn't add to inflation. How do you spend $14.6 billion on cost of living relief without adding to inflation?
GALLAGHER: Well, you have to see it in the context of the Budget as a whole, really. I mean, because the Budget is not just one decision or decisions about one area. It's about decisions across the board. And you'll see when the Budget's released, we've made no secret that we're seeing significant improvements in the in the Budget bottom line. In the near term, you'll see that we've announced $17.8 billion worth of savings that we've found across the Budget. So it's a combination of all of those things which we've been mindful of to ensure that we're not adding to the inflation problems in the economy. We're dealing with them, whilst at the same time finding room for things we have to do, and investing in cost of living relief and investing in making sure that we are more resilient going forward in terms of some of those issues around supply chains and growth, and investing in the productive side of the economy.
LIPSON: If you look at power Bill relief on its own, it's worth $3 billion, once you include the money that the states and territories are putting in. Is that inflationary?
GALLAGHER: Well, I think people will know that energy prices have featured in the CPI in terms of, you know, one of those things that's fuelling inflation. And so we've been mindful -
LIPSON: But I didn't ask about CPI, asked about whether it was inflationary because they are different. The CPI measures inflation. But you know-
GALLAGHER: We've been mindful about how we've put this package together to ensure that it's not inflationary. And I think you'll see that on Budget night.
LIPSON: You found $17.8 billion in savings and reprioritisation. $7.8 billion of that is for Defence, that's already been announced. That leaves about $10 billion in savings. So what's being cut to achieve that?
GALLAGHER: Well, we'll show that clearly through the Budget papers, but it's across the board. I mean, this is an extension of the sort of spending audit that we started in October. We've continued it on. So we're looking at where we can find programs or services that we're no longer, meeting needs, reprioritising that into, you know, new priorities. That's the focus we've taken. But part of putting this Budget on a more sustainable footing, part of, part of about repairing the Budget is actually finding savings in the Budget. We can’t, we can’t pretend that we’re going to repair the Budget and put it on a more sustainable footing without savings and we've tried to make those sensible savings where we can find them. And that helps, with the, you know, putting the Budget bottom line on a much better footing.
LIPSON: It's a substantial amount at $10 billion in savings, but it's over five years, not four. Why is that?
GALLAGHER: Well, we're looking at the Budget over a period of five years because it includes measures, you know, that we're doing now and then over the forward estimates. But, you know, people will see that on budget night. We're just being clear with people-
LIPSON: Very unusual. Sorry to interrupt. To do five years rather than four. Everything else is over four years. That's the forward estimates.
GALLAGHER: Well, I think it tells the story of, of the Budget as a whole. And people will see that they can make their own mind up about that on Tuesday night. But, you know, we're being clear and transparent about what we're doing in this Budget. People can see that on Tuesday night.
LIPSON: Will there be a surplus?
GALLAGHER: Well, we've made no secret that there will be a significant improvement in the near term, but the pressures on the Budget remain over the forward estimates period and into the medium term. So there's still a lot of work that we need to do to make sure the Budget's in the shape it needs to be to meet all those priorities going forward.
LIPSON: Katy Gallagher, big week. Thanks for joining us.
GALLAGHER: Thanks very much, David.
Media contact: Lisa Glenday 0403 931 209 | Gallagher.Media@finance.gov.au