SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for the Public Service
Minister for Women
Date: Monday, 8 May 2023
KIERAN GILBERT, HOST: Finance Minister Katy Gallagher, thanks for your time. The increase in the single parenting payment, that was, would have been personal for you to get that across the line. Are you happy to get that done?
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Yeah, look, I think this is a significant improvement and a change to extend parenting payments, single, from eight to 14 years. Obviously women's groups have been advocating for this as they are the vast majority of single parent households in this country, for a long time and I think you know, we've worked hard to make room for it in the Budget. I guess, I know how important that payment is. I've lived on it. I spent, you know, when my little girl was pretty small, I spent a couple of years on that payment and it certainly helped me to get back on my feet and into work. And I'm hoping that by extending this, you know, we'll see thousands of more single parent households given that extra support.
GILBERT: Personal for you, personal for the Prime Minister too. He made the announcement and of course, we know his story as well. So, I'm sure he was keen to get this done as well, to correct the wrongs of the last Labor Government.
GALLAGHER: Yeah, well, I think again, when you grow up in a single parent household, it brings with it a perspective that not all of us have, and I think that's, you know, Cabinet Ministers are no different to everyone else. They bring their life experience to the table when making decisions and I think the Prime Minister had been clear that he wasn't a supporter of that change when it happened. And I guess the job for Jim and I was to try and work out ways and room, in the Budget to ensure that we could deliver on that change. And so again, you know, 57,000 single parent households, will move on to have a longer period of time on that higher pay and it means over 100,000 children will be included in that as well. And, you know, it wasn't everything people were asking for, but I think it shows the commitment we've got to investing in, you know, supporting people to seize opportunities.
GILBERT: Would you like to get it back to the age of 16 where it was originally?
GALLAGHER: I think we landed on 14, I think we had a fresh look at you know, what that means. By 14, you're sort of halfway through high school. You are in a more independent age. And I guess we've got to weigh that up against calls for support and increases in investments in a whole range of other areas. So I think, you know, it gave an extra six years, that's a considerable extension of that entitlement, and for all good reasons. I'm not arguing against that. But I think that's probably, that's where it lands. And then, you know, there's no shortage of other calls on the Budget for additional investment.
GILBERT: Yeah, one of the calls is on JobSeeker, and given the looming surplus, was that something that you had to say, "okay, we've got to make this broader", there were initial suggestions that it might be just for an older cohort, now from what the Treasurer is saying, it looks like it's across the board. Is that, that's obviously a consideration given the coffers are full?
GALLAGHER: Well, I think we've made it clear that there, there's certainly revenue upgrades in the near term. I mean, there's still an issue over the forward estimates and into the medium term of the Budget under significant pressure. So I think a couple of things there. Yes, we have wanted to look at how we can provide, what support we can within the Budget, weighing that against a high inflationary environment. So not wanting to add to inflation, but also repair the Budget over time and I think part of the decisions and discussions around the ERC table were, you know, how much we can invest in cost of living, invest in other pressures, deal with some of the clean-up from the former government, but also bank a sizable amount back into Budget repair. And I think that's important from the inflation story, but it's also important from a you know, Budget sustainability point of view, because we know all the pressures are going to keep coming. They're not going to get smaller, they're getting bigger.
GILBERT: Yeah indeed, and so an increase in JobSeeker would be a permanent increase. So do you need to factor that in in the medium to longer term, not just the next year or so when commodities and other boosts to the Budget's there, is that your thinking as well?
GALLAGHER: We'll pay it, when we, I think when you increase payments, and you'll have to wait ‘til Budget night to see how you know, the different measures that are included in that cost of living pressure, but when you, package sorry, but when you do include, when you look at payments, it isn't like a one off. You know, they are payments that kind of are structurally then embedded in the Budget. But we've been mindful of that as well as we've made some of these decisions.
GILBERT: With the spend though, because as you said, you're also mindful of that inflationary impact. Have you been able to take enough out to balance the money that you're putting in? Because it's, in simple terms, that's what we're seeing isn't it? You've got the RBA taking money out of the economy, they really want the government to be taking money out as well and cooling the economy right now. Have you got that?
GALLAGHER: Well, I think we've, you, that's been one of the things front and centre of our decisions. You know, I think Jim and I have been saying for a month, in fact, since we came to government, that the inflation challenge is the one we are focused on. Obviously, the way it's been playing out, significant cost of living pressures on households as well. So we have been trying to find the balance of how can you alleviate some of those pressures, not add to inflation, repair the Budget, look for savings and I think that's part of the story as well. So, you know, we found an additional $17.8 billion in savings in this Budget that could go to being reprioritised.
GILBERT: Is that enough, given how much is going back?
GALLAGHER: Well, I mean –
GILBERT: Because you know, the people that are getting it, whether it be JobSeeker, single parents and no one would begrudge them receiving more and lifted out of poverty, but all those dollars will be spent, won't they?
GALLAGHER: Well, that's, certainly the evidence did show that if you increase payments to low-income households, they spend the majority of that, what their income, on meeting cost of living pressures, but we've been mindful of that. So, I think wait and see what the Budget, how it all comes together. You know, the Budget isn't one decision in isolation, it's hundreds, if not thousands of decisions that work together to land the final document and yes, we've got cost of living pressure. We've got to look at what we're doing about future opportunities and you know, making sure that Australians get a crack at those, we've got to look at Budget repair, we've got to be mindful of inflation. It's been a challenge. This is my first full Budget, but it's been months and months of meetings and decisions, hard decisions, easier decisions, the whole mix.
GILBERT: It's all done and dusted now and your friend Jim Chalmers is finalising his speech now, but are you confident that you're consistent and in line with what the RBA is doing?
GALLAGHER: Well, that's been, that's informed our decision making. I mean, I'll let others commentate on what they think about it once it's released, but, we have been very mindful of decisions that don't add to inflation. We don't want to make their job harder. But there are, as you know, on your show all the time, calls from everywhere about much needed investments from the Commonwealth Budget, and we've had to, you know, find that sweet spot in balancing those out.
GILBERT: Because, you know, whether it be the energy bills or whatever else. Again, no one begrudges those, that assistance being provided, but it is inflationary, isn't it? In the sense that we're putting more dollars in people's pockets? So your Treasury might say, okay, the direct, immediate impact is CPI down, but those dollars will be spent eventually, so does it make their job harder in the medium to longer term, or longer period of reduction of rates?
GALLAGHER: Well, the Budget will outline all the forecasts that we have around inflation and wages and employment, and that'll be mindful of the decisions we've taken in this Budget. That'll incorporate those decisions, and we've been clear that we don't want to make the Reserve Bank's job harder, but there are calls on the Budget to make sensible investments. I think it's about how you roll them out and the targeting of those investments has something to do with it, but also, again, the Budget repair story, the big one as well, you know, not spending all of the, anywhere near the revenue upgrades than we've seen in previous administrations, you know, being cautious and showing restraint there is part of it, showing the saving side is part of it, and also how you shape the future opportunities. You know, productivity is an issue you know, actually seizing some of the opportunities in a net-zero world, you know, are so important for jobs for the future for our kids. So, you know, the Budget is so many different decisions all trying to align and pulling the same direction.
GILBERT: Yeah, huge, huge task. There's no doubt. Do you feel that, and I don't expect you to give me a number or anything, but with the surplus, we expect a surplus to be there, will that end the Coalition critique on Labor that you can't manage the Budget or economy?
GALLAGHER: Well, I'm sure they'll work out some criticism, knowing the kind of engagement we have. But I think what Jim and I, and it's a, I guess a different answer to that question, and I would put it a different way, which is we, Jim and I are determined, and the Prime Minister who's been very clear on this, about ensuring that people see we take managing their money really responsibly, you know, like, it's important to us, fiscal discipline is important. Saying 'no' is a big part of my job. Sometimes that's really hard, but we have to ensure to people who are doing it tough that they can see they've got a government that tries to balance up all the competing pressures but ultimately, they know that we are doing the right thing by them and their Budget.
GILBERT: And on the PRRT, the Petroleum Resource Rent Tax, the gas industry has welcomed the move, the Greens have described these as the, this is Nick McKim, he says, "to describe them as the barest minimum would be significantly overstating what they achieved, these are terrible changes that will make next to no difference to an utterly cooked PRRT system," that's a Greens spokesperson. Could you have gone harder?
GALLAGHER: Well, I mean, we work with the Greens, but I don't think that's any surprise, to hear that feedback from them. I think what you've seen is us again, finding the balance between getting a return to the Budget so we can invest in cost of living, ensure investment, ongoing investment in gas supply domestically, and making sure our international relationships and commitments are adhered to. The Greens don't have to worry about those sorts of things. They're never in government, so they can throw stones from the sideline. But when you're in government, you've got to weigh up a whole range of competing issues as you make decisions and this will bring $2.4 billion into the Budget, it'll help. It'll be a big help.
GILBERT: Katy Gallagher, Finance Minister, thanks so much. I know it's a busy week for you, I appreciate you making the time.
GALLAGHER: It's great to talk with you Kieran.
Lisa Glenday 0403 931 209 | Gallagher.Media@finance.gov.au