SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for the Public Service
Minister for Women
Date: Wednesday, 7 June 2023
ADAM SHIRLEY, HOST: Well, interest rates, I'm sure, got your attention. Are you looking to, are you needing to refinance your home? Well, someone who looks over the nation's finances is with us now, Katy Gallagher, who is Senator for the ACT and federal Finance Minister amongst her other responsibilities. Senator, good to see you. Thanks for coming in.
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Thanks for having me on, Adam.
SHIRLEY: A tough one again for households. And I know that you and Jim Chalmers talk about how to balance inflational policies with support for households, but do you need to change direction in light of what the Reserve Bank announced yesterday?
GALLAGHER: Well, I think our Budget was carefully calibrated to deal with the inflation challenge. You know, inflation staying higher for longer, but it has peaked and we are expecting it to come down towards the target range in the next financial, in the 24/25 financial year. But that, you know, that, I guess doesn't give people comfort at home, like households are doing it really hard -
SHIRLEY: And have been prior to this.
GALLAGHER: Yeah. Well, there's been, you know, over the past 12 months, we've had 12 increases in interest rates and that makes a huge difference to monthly mortgage payments. We understand that. Which is why the Budget we put together had a look at what we could do around cost-of-living pressures where we could make a difference, where we could invest in the opportunities of the future. So that's dealing with some of the productivity challenge we've got in the economy, but also, importantly, to bank a lot of the upward revision to revenue so that we can repair the Budget. We're in fact, we're forecasting a surplus for the first time in a long time, and that makes a difference in terms of the inflationary pressures in the, across the economy. And I think the Governor's recognised that, he said the Budget wasn't inflationary. Treasury Secretary has said the same thing. So the Budget was right for the times. But obviously, as we work through the next 12 to 18 months, we've got to keep making these decisions and calibrating them to the economic circumstances of the time.
SHIRLEY: Are you at a point as a government though, where you are hoping quietly the Reserve Bank doesn't keep going this way?
GALLAGHER: Well, you know, I think those decisions are independent of government -
SHIRLEY: Sure, but are you hoping –
GALLAGHER: And is a matter for the Reserve Bank. Well, it's not really what I hope or otherwise, I get that those increases, interest rates are really impacting households. The Reserve Bank has a hard job to do. I don't try to do it for them. And my job is how we respond to the economic circumstances of the time and where fiscal policy, where Budget decisions are made and how they are made. And we were very, very careful in the decisions we took in October because the inflation challenge was there in October and in May, to not make the Reserve Bank's job harder.
SHIRLEY: Five to eight, federal Finance Minister and Senator for the ACT Katy Gallagher is with us on Breakfast. Today, a local issue, which has got national attention including the Parliament, now goes to the Supreme Court. The bill the ACT Government passed last week to forcibly take over Calvary Public Hospital is going to be challenged in the Supreme Court today. Now, when the ACT Government came close in 2010, 2011, to taking over the running of the Calvary Public Hospital, you were Health Minister and then Chief Minister. The takeover hinges on the current ACT Government breaking a contract that still has 76 years to run. When you were Health Minister, then Chief Minister, why did the government sign that long-term contract which seems to be the centre of these problems between Calvary and the ACT Government?
GALLAGHER: Well, there's a long history to this Adam. I'm not sure we've got time to go through it. But if you remember, Calvary actually approached us to sell the hospital –
SHIRLEY: And had initially agreed –
GALLAGHER: That's right.
SHIRLEY: The Little Company of Mary, but the Vatican stepped in.
GALLAGHER: That's well, yeah, there was more than that to it.
SHIRLEY: I'm summarising briefly for time.
GALLAGHER: So you know, when that was not possible, I had to make decisions at the time about what was going to deliver the best outcomes for the people of the ACT. And in that instance, we engaged in those negotiations. Obviously, a lot of things have happened since then, things have changed. Governments continue to make decisions in the best interests of the ACT and you know, I think investment of a billion dollars in a northside hospital is a really exciting opportunity. It needs to be done. You know, we know that, knew that 10 years ago, probably. But it's being done and that's important.
SHIRLEY: If we're talking due diligence, why sign that long term contract with what is a third party provider to what is a public asset or public facility?
GALLAGHER: Well, they had a lease on the land for that time. I mean, that was, they were provided with a lease by, I think prior to self-government. That was a 99-year lease, essentially. That had that same, roughly the same duration, as I recall. But it was around, at the time when the, when we weren't able to purchase the hospital then, it was about providing some stability and certainty about how the health system operate in the ACT. But a lot has happened since then, Adam and I'm not briefed on it. I haven't been part of those discussions.
SHIRLEY: I understand that I'm trying to get some more detail on this crucial period. And I wonder then, whether you or they considered a shorter contract, so that if the idea was to have this as a public hospital run and owned by the government, if a shorter contract might have been the thing to put in place at that time?
GALLAGHER: Well, it wasn't part of the negotiations. As you remember, it was a very complicated period of time and involved the hospice. There was community concern about a whole range of things. The sale, the previous offer of sale was withdrawn. We needed to keep the services going. We engaged in good faith negotiations to try and do that in the best interests of the community. Obviously, you know, Andrew Barr and Rachel Stephen-Smith have been provided with advice which has set them on a different path, you know, and I'm not privy to that. But I am absolutely certain that those decisions are being made in the best interests of the people of the ACT.
SHIRLEY: If this continues and the government's successful in taking it over, given the cost of building a new northside hospital, is the Federal Government, and you as Finance Minister, considering contributing to that great cost?
GALLAGHER: Well, we work with the ACT Government on areas where we can be partners, obviously, we've got the National Health Reform agreement. So, we are at the table on health, and we'll continue to talk with them. I haven't got any specific proposal around that. But I have engaged quite a bit in the last couple of months with the Chief Minister about areas where we can maximise the opportunities between the Commonwealth and the Territory Government working together to deliver on those priority issues for the ACT and we'll continue to do that.
SHIRLEY: Possibly light rail? Possibly a stadium?
GALLAGHER: There's no shortage of projects, Adam, that have been raised. No formal proposal but I think where Andrew and I got to was, you know, how do we make sure that where we want, if we're able to make investments, that it actually works hand in glove with the ACT Government. I think it's a rare opportunity to have someone in my position and Andrew in his and all of that and we need to look at how we can maximise the outcomes for the people of the ACT.
SHIRLEY: Appreciate your time, Finance Minister, thank you.
GALLAGHER: Thanks for having me on Adam.
Lisa Glenday 0403 931 209 | Gallagher.Media@finance.gov.au