SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for the Public Service
Minister for Women
Date: Wednesday, 4 October 2023
MICHAEL ROWLAND, HOST: The Federal Government says Australians will be relieved the Reserve Bank Board kept interest rates on hold again yesterday. On another front, the Government is pushing ahead with plans to wind back tax concessions for people with superannuation accounts worth more than $3 million.
The Finance Minister Katy Gallagher joins us now from Parliament House. Minister, good morning to you.
SENATOR KATY GALLAGHER, MINISTER FOR FINANCE: Good morning, Michael.
ROWLAND: In the wake of the decision or non-decision by the RBA Board yesterday, your colleague, the Treasurer Jim Chalmers, said the last thing Australians needed yesterday was another interest rate rise.
That would apply for the rest of the year as well, wouldn't it?
GALLAGHER: Well, we certainly know that Australians are doing it tough right now. And I think the Treasurer's comments yesterday reflect that. The bank in its media statement yesterday, you know, kept open the possibility of a further interest rate increase, but they in a sense, have been doing that for some time now, since this tightening period began. But we're certainly seeing the impact of those tightened higher interest rates on households at the moment with consumption. And, you know, we recognise that, so I think yesterday's decision to maintain them at 4.1% is certainly something that many mortgage holders across Australia will welcome.
ROWLAND: But at the same time, the RBA Board did point to the fact that as the Government has done repeatedly, that inflation while coming down, is still too high. And that means a possible rate rise next month is very well in the frame?
GALLAGHER: Well, look, I mean, it's the RBA's job to basically take all the economic indicators, what they're seeing across the economy and make decisions as you know, the independent bank does. But you know, they are pointing out that inflation has reached its peak, that we are seeing it coming down and that it is expected to go back to the target range across the forecast period. So that is very welcome. But we recognise that at the moment, you know, it's really tough out there. That cost of living is impacting households, the higher interest rates are impacting households, and that's why the government's focused on making sure we're doing what we can to ease those cost-of-living pressures through some of the measures that we've introduced through the Budget and through our election commitments, whether it be childcare or cheaper medicines or energy bill relief. That's the job of the Government to make sure we're doing what we can without impacting on inflation.
ROWLAND: Ok. Let's turn to the move to push ahead with those plans to wind back the tax concessions for people with superannuation accounts worth more than $3 million, an increased tax on those earnings. You may have trouble getting this legislation through Parliament, Katy Gallagher, the Coalition, and the Greens oppose it. The Greens say they won't support this unless the Government also extends superannuation to paid parental leave. Will you consider that?
GALLAGHER: Well, I think the Greens already know and we've, Jim, and I, have said a number of times that this is a priority for us when we can find room in the Budget to pay for it, PPL on super. We recognise, you know, women retire with less retirement savings than men, and this is one of the areas where we can make a practical difference, but it does come with a fiscal hit to the Budget, and we've got to manage a whole range of other pressures as well. So, the Greens, like it's not uncommon for the Greens to come out and say, you know, if you do this, we want this. And it's also very common for the Opposition to just say no to everything in the Senate as we're seeing on the Referendum and everything else. They just say no, they take that view. And so, my job or one of my jobs is to try and navigate all pieces of legislation through the Senate. So, we'll continue to work with everybody to try and get that job done. It's an important measure. It raises $2 billion when it comes in, and it affects a very small number of people who have over $3 million in their super account. So, we think it's a sensible change. And for those that don't support it, particularly the Opposition, I think they've got to come clear on how they're going to find that money, that fiscal black hole that they'll have if they don't support sensible measures like this.
ROWLAND: In equity terms, how will you ensure this measure applies to people like retired politicians, retired senior public servants on the old generous defined benefit schemes who would also be having the benefit of large superannuation accounts?
GALLAGHER: Yes, so it is going to apply to defined benefit scheme holders as well. I mean, this is something that when changes are bought in, I think under the former government, they had to work through a process to have it affect, you know, impact on defined benefit scheme holders as well. And that'll be the same in regard to this change as well.
ROWLAND: Catherine King, your colleague, the Transport Minister is refusing to front up to the Senate inquiry into the decision to block Qatar Airways getting more flights into Australia. What's she afraid of?
GALLAGHER: Well, she's not afraid of anything. And I think you'll see from the hearings to date and the questions answered, and indeed the questions answered in both chambers of Parliament by the Minister and by the Senate repping Minister that we are very happy to answer any questions in relation to this. I would say, Michael, that when we called House Ministers when we were in Opposition, and we did from time to time, they refused to attend as well. And it's that long standing protocol that really, Ministers from other chambers or Members of the other chambers don't, can't be forced to appear or appear before committees. You don't see Senate Ministers heading over to the House to appear. And it works in the same way in the Senate.
ROWLAND: Well, your government was elected on a platform of transparency, on a platform of accountability, why not break that precedent?
GALLAGHER: Well, there's plenty of transparency and accountability happening Michael, I mean you'll see this story is getting a lot of focus. The committee is being able to undertake its work, it'll report back to the Senate. There have been questions on it in both chambers, in press conferences, and there'll be questions no doubt in estimates as well. That's appropriate. That's the accountability and transparency measures that operate across the Parliament. It is unusual, though, for us to call other chamber members to appear before another chamber.
ROWLAND: Okay. Katy Gallagher. Appreciate your time this morning. Thank you.
GALLAGHER: Thanks very much, Michael.