SENATOR THE HON KATY GALLAGHER
Minister for Finance
Minister for Women
Minister for the Public Service
Senator for the ACT
Date: Thursday, 2 November 2023
GREG JENNETT, HOST: Katy Gallagher, welcome back to the program. So, Jim Chalmers made a speech today, warning that on current settings Australia might struggle to reach its 2050 Net Zero commitments. Oddly, I guess that almost puts him on the same page as Tony Abbott, who’s deeply sceptical, but what’s prompted this admission? What is the Treasurer and the Government trying to tell us here about the existing tools at your disposal to get to 2050?
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Yeah, well, thanks for having me on Greg. I think, certainly Tony Abbott and Jim Chalmers are coming from quite different points of view in terms of that target. But I think it’s an important intervention by the Treasurer. You know, we’ve set ourselves a target to get to Net Zero. We’ve got short term targets. We’ve then got our renewable energy target that we want to get to. And I think the point Jim’s making overall is that government’s got a significant leadership role to play in getting there. And we’ve also got to focus on our areas of strength. Not kind of playing the field, but more look at where are the areas of opportunity for a country like Australia, to really grab the economic opportunities that come, but also deliver on what we need to do in a policy sense as well.
JENNETT: This is broad-brush stuff. To be fair, the Treasury didn’t lay out any specifics today. But why such an emphasis on government intervention? If the commercial realities of some of these renewable investments really stacked up, then they’d – to use a phrase – wash their own face, wouldn’t they? They would be attractive, financially, to those investors? Why is the Government looking upon itself to lead this, financially?
GALLAGHER: Well, we set the policy framework for a start. So, we’re setting those targets. We’re saying this is where we want to get to. And, as with all economic transitions, there is often a role for Government, including in supporting new and emerging areas of development in the economy to really drive that change. So, whether it’s critical minerals, green hydrogen, green metals... These are all areas where we think there’s a real opportunity for Australia to play a role, not only in achieving our own targets, but in the global transition that’s happening as well. And the Treasurer leading that, or certainly making that speech, shows just how seriously we take it in that our number one economic adviser – Minister – is right in the middle of it.
JENNETT: Well, he has flagged further announcements on that in preparation for the next Budget, so we’ll wait on that. Let’s look into next week. The RBA Board, of course, meeting. There is reason to think that the worst may not yet be over for borrowers. Particularly those who haven’t yet climbed the cliff and transitioned from variable – from fixed to variable loans. How many are still in that category?
GALLAGHER: Well, I think we’ve had about a million people come off fixed into the higher rates over the past twelve months. And I think there’s about another – just over 400,000 to come off. You know, and that will happen gradually into 2024. And there’s no doubt mortgage holders across Australia, millions of them, are really feeling the pinch and the pain of the interest rate increases that we’ve had. Obviously, the Reserve Bank makes its decision against the mandate that it has, and the Government’s job is to look at what we can do to ease some of those cost-of-living pressures without adding to that inflation challenge we have in the economy.
JENNETT: Why hasn’t, in your own estimation, the existing set of interest rate increases done the job so far? Why is it proving so persistent – inflation, and people’s spending for that matter?
GALLAGHER: Yeah, look, I think there’s a number of reasons for it. Inflation is moderating, but it’s staying higher than we’d like for longer than we’d like. We’ve obviously got a fair bit of global instability that’s happening around the place, but I think when you look at all the local economic data – consumption, savings, confidence – you can see that those interest rate increases are really hitting home. People are feeling it and, again, whilst the RBA will make their decisions based on their judgement, our position really has to be on how do we support people through this really difficult time?
JENNETT: But if they did go again next week, wouldn’t it prompt in your own minds – as you prepare the MYEFO mid-year update, or even next year’s Budget – further restraint rather than further support for consumers?
GALLAGHER: Well, these are – we need to make sure that fiscal policy is working hand-in-hand with monetary policy. The RBA was before an Estimates committee last week. It confirmed that our policy is doing that. Where we have banked most of the upward revision to revenue has been really helpful. But I think we've also got a role to play to make sure we are sort of ensuring people are being supported, that we're not adding to the inflation problem, but in those areas where we can make a meaningful difference, we are. And if you look at the cost-of-living package that we had through the Budget, whether it be energy bill relief, child care, Medicare investments, the Treasury estimate is that that’s shaved 0.5 per cent off the inflation numbers.
JENNETT: Well, that was their estimate at the time, but can we be certain it’s still the case is the question. Particularly, since you raise it, the example of child care – there is some anecdotal evidence in the field, which the ACCC is watching, that operators may have capitalised on those increased subsidies?
GALLAGHER: Yeah, well, that’s a whole other piece of work that we still have going with the Productivity Commission as well. But the CPI figures released last week, they show that child care would have gone up 6 per cent, it went down 13 per cent. So, you can see that the package that we brought is making a difference. And it’s definitely making a difference to household budgets, which is what we want. You can always read the economic numbers, the data numbers out. We want to make a difference on the ground. Yesterday we've got the Medicare bulk billing rate money coming in, we’ve got the Housing Australia Future Fund starting from yesterday. So, you can see the package. It was timed, it was targeted, and it is making a difference. But we are not sitting here and pretending that people aren't feeling the pain of those interest rate increases. They are.
JENNETT: Let’s see what judgement the RBA Board brings to all of that next week. Can I take you to the sad matter of domestic violence? A couple of elements to it. There was a target to reduce death at the hands of intimate partners, 25 per cent reduction each year. That was released only a couple of months ago now, and covered I think the next 5 year-period. Yet in the last 6 days, 10 days, we've seen 6 tragic deaths that involve intimate partners, allegedly. Does that make that target seem unachievable already?
GALLAGHER: Well, it makes, for me, it makes the target even more important. I think women around this country have had enough. The prevalence of violence in women and children's lives, you know, is it at a level that's just so unacceptable. And I think there's a fair bit of misunderstanding about how prevalent violence is. And the impact that it has – not only on women and families, but their children and generational impact. So, I would argue it makes the target even more important. We have to get real about reducing deaths. We have to get real about supporting women and children. And it’s a massive problem in this country. It's not one government can solve on its own, but we have a significant role to play in trying to make sure we get all of the different interventions right, whether it be parents and teachers and the community working with attitudes, which is a big part of it, to how we make sure that women are supported if they need to leave, and to how we deal with perpetrators at the other end. There’s a whole range.
JENNETT: Does anything about these terrible statistics, I just cited them only from the last couple of weeks, cause you to redouble or accelerate the ambitions towards these targets, though? Simply by virtue of the fact you seem to be slipping off them from a very early stage?
GALLAGHER: Setting targets in this area was difficult and hasn't been done before, for the precise reason that nobody particularly thinks it's going to be easy to get there. It's such a difficult problem in our country. Until we're honest about it and talking about it openly – and it has always been a bit more of a hidden problem in our country – the harder it is going to be to reach those targets and more importantly prevent the deaths and those tragic and devastating loss of life we've seen in the last month. We've got a role to play, all of us. I feel when I'm talking to all of my friends, particularly women, I think there's a level of frustration and devastation, really, about how really some women's lives end in this country.
JENNETT: Well, as you say, at least having a target does raise awareness. And we’ll keep an eye on that as we progress through the next 5 years. Katy Gallagher, really appreciate your time.
GALLAGHER: Thanks very much, Greg.