Doorstop – Parliament House

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: The Budget we hand down in just over a week’s time will be a Budget that addresses immediate challenges. It’ll be a Budget that creates more opportunities for more Australians and importantly it will lay the foundations for a more secure and strong and resilient economy. One of the issues we’ve been dealing with as we’ve been finalising this Budget is unearthing all the unfunded and terminating programs that actually have ongoing impacts through the Budget process. We started doing a bit of that in October, where we uncovered about $4.1 billion in unfunded terminating measures that needed addressing and as we’ve gone through the May Budget process, we’ve uncovered over $5 billion in more of those types of pressures. So these are programs that are ongoing. These are agencies that need funding, these are services that people expect and rely on. And this Budget will have to deal with those. Essentially cleaning up the mess but it’s billions of dollars of mess that this Budget will have to make room for and we’ve been pretty transparent through this that these programs are ongoing. They need ongoing funding and really the decision to treat them another way or the way the previous government did was dishonest and dodgy, in my view, in terms of Budget transparency and honesty. So you will see those areas where we have unearthed some of these problems and we’ve addressed them through the Budget. Happy to take questions.

JOURNALIST: This is your second Budget, why are you unearthing them now?

GALLAGHER: Well, it’s really that in October our Budget was on those sort of immediate pressures that we found. So really urgent and immediate. We addressed those, that’s about $4 billion. But as we’ve gone through agency by agency in a full Budget process October was largely about urgent things and also our election commitments. It wasn’t a full Budget. We’ve gone through every department now. And through that process, those departments have brought forward, and ministers brought forward, programs that have been unearthed through that process. So this is really, hopefully, the last of these which we have addressed. Because in total, it’s in the order of about $9 billion.

JOURNALIST: In the previous Budget, there was about $20 billion worth of spending cuts or savings as you guys put it. How much would be in this Budget. Also another one on JobSeeker. You said the Budget will be focused on those that are most vulnerable. Aren’t those on JobSeeker vulnerable people?

GALLAGHER: In terms of the savings and the reprioritisation, you will see a significant effort again in doing that in this Budget. It’s part of our fiscal strategy. That we’re not only putting in additional investments where they’re needed, but we’re also making sure that the money that exists in the Budget is going to where it needs to go. So that’s the reprioritisation and some savings. They’ll be in the order of billions of dollars. This is important. It’s about a responsible Budget. It’s about meeting pressures, making room for new things, but also making sure every dollar is being spent in the way we need it to be spent and delivering outcomes. So, you will see that. In terms of JobSeeker, this Budget will have a significant cost of living package and that cost of living package will be targeted to the most vulnerable Australians. I mean I think that is a core value of the Labor Party and the Labor Government, but it’s also about meeting need across the board. We’ve got those reviews. They’ve made recommendations about increases to different payments, and a whole range of other recommendations as well, and you’ll see a response to that.

JOURNALIST: Just on the cost of living measures, will they be one-off? We know that the energy support is going to be in the Budget, but when you talk about cost of living relief are you making structural changes that will be ongoing or is it one-off here to support these people?

GALLAGHER: The cost of living package or the energy component of that which people are aware of, that is a one-off cost of living measure. But across the board, across the Budget more generally, you will see investments in an ongoing sense about addressing disadvantage and alleviating cost of living pressures. You saw one announced last week in terms of cheaper medicines from the Health Minister. Those are ongoing and will an ongoing impact.

JOURNALIST: You were talking about savings in the order of billions of dollars. Are you hoping will be maybe half of last time, sort of more like $10 billion, or less than that?

GALLAGHER: Look it’ll be a significant savings reprioritisation package. I don’t think we’ll get to quite where we were in October. It’ll be less than that. But it will be significant. It will be billions of dollars that we have reprioritised and saved.

JOURNALIST: Maybe about half of that?

GALLAGHER: Look, we’re finalising all of the details of that. You’ll see them in the Budget but it will be less than I think the $22 billion which we got in October. But that, to be fair, it was reprioritising or returning to the Budget, large buckets of money that had been left there by the former government. This has been a harder second phase work in terms of going through all of the areas when you make savings and reprioritise. You’ve seen some of that announced through the Defence Strategic Review, for example. There will be others.

JOURNALIST: Some economists are saying it is possible the Budget could end up being in surplus this year, is that something that the government’s mindful of? Is delivering a surplus a desirable outcome given that that might take some of the pressure off inflation?

GALLAGHER: Well we’ve been saying for some time that we will see significant improvement to the bottom line in the near term but pressure which faces in the Budget and the thing that I’ve been focused on as Finance Minister and the Treasurer has been focused on in his role is the long term structural problems facing the Budget. So yes, we will see significant improvement. We will release the bottom line that you will be very interested in on Budget Day. The focus of all of our efforts and our work and some of the reform work we’re doing is really about those longer term structural pressures. The Budget remains in structural deficit, the pressures coming towards us are increasing not decreasing in those areas that you’ve all been writing about and filing stories on – NDIS and defence and health and aged care and servicing Australia’s debt burden. So that remains the Budget challenge and that won’t be solved in one Budget.

JOURNALIST: So there could be a surplus on May 9?

GALLAGHER: I’m not speculating on that. We’ll release the Budget details on Budget Day but the monthly financial statements are out. I know people have been writing about those. Jim and I have been clear that we would see a significant improvement in the bottom line in the near term, but that doesn’t take away from pressure that is coming at us over the forward estimates and over the longer and medium term.

JOURNALIST: The Greens want the Federal Government to intervene to freeze rents and interest rates. How feasible is it for the Federal Government to do something like that? And then secondly, you said the government is going to address some of the immediate challenges and particularly with references to the vulnerable in its Budget. We know there’s a rental crisis at the moment is there something specific in the Budget for renters?

GALLAGHER: We won’t and don’t take advice from the Greens political party. That’s my first point. I think you’ve seen plenty of people respond to their requests or calls for intervention and some of the issues that that would cause. National Cabinet discussed some of these issues on Friday. They have mapped out a piece of work that needs to be done. The Commonwealth is fairly and squarely back at the table in terms of housing policy. We’ve been absent for the last decade. We are back there. We want to work with states and territories. Some of the issues – supply – which is essentially what we need to do. We need to build more supply and more affordable supply, is and rests with the states and territories and local governments. So that’s why some of that work coming out National Cabinet is so important. If the Greens think that you can wave a magic wand or snap your finger and solve some of these deeply entrenched issues across a number of governments right around Australia, they’re wrong. It’s simply not the case. Having said that, we do want to make sure that we’re doing everything we can on housing. I would say to single best thing the Greens could do on housing is support the Housing Australian Future Fund. It is absolutely incredible that we’re in this situation where we’ve got them screaming from the sideline about the housing crisis, and at the same time refusing to progress through the Senate a $10 billion fund specifically designed to increase the supply of affordable housing. They should be doing that. They should be supporting that. And you’ll see through the Budget again in just over a week’s time all of the various measures that we want to invest in to increase the supply of housing and work with states and territories.

JOURNALIST: The Prime Minister has repeatedly said that the Budget will show Labor values. What would it say about Labor values if you’re willing to put more billions into defence but not into helping the nation’s most vulnerable?

GALLAGHER: I’ve already made it clear that this Budget will have a cost of living package that will be targeted to the most vulnerable Australians. We are aware of the pressures and we are responding and we will respond in this Budget. In terms of defence, we have been very clear through this Defence Strategic Review announcement, through the announcement of AUKUS and in the work that the DPM is doing about in the forward estimates dealing with these pressures in defence within their funding envelope. Don’t underestimate that. That is a big piece of work that has to be done. So we are balancing up a range of pressures. Whether it be in defence, whether it be in health, whether it be on payments side, whether it be on the program side. Aged care, all of these areas have pressures. The job the Budget has to do is look across the board and make you know hundreds if not thousands of decisions about how we put all that together for this Budget update, and that’s what we’ll be doing.

JOURNALIST: On the first Home Guarantee, we’ve seen eligibility expand, but will we see the program itself that 35,000 quota expand alongside it?

GALLAGHER: Well it’s in the order of about 50,000 if you include the First Home Guarantee, the Regional Homebuyer’s Guarantee, and Family Home Guarantee. So as a package we have extended eligibility. We want to make it easier for people to you know, to meet those eligibility standards or requirements and also reflect I think, you know, in a sense a modern view of people’s arrangements. We don’t think you should be locked out because you don’t fit the eligibility criteria. Obviously you have to meet other requirements in the program. But we want the program to work for everybody.

JOURNALIST: Sorry, can I just clarify, so that taking that 50,000 figure, will that rise as well?

GALLAGHER: Well, no the program will remain as it is. We are changing the eligibility criteria within that.

JOURNALIST: So is that a sign that it’s not, you’re struggling to fill that quota that you’ve expanded that eligibility?

GALLAGHER: No, no, I wouldn’t think you could say that at all. In fact, the programs have been very successful.

JOURNALIST: Will the Government have to look at significantly reducing the number of people coming onto the NDIS every single year to ensure that by just 2026 which is pretty close, we’re reducing growth by 8%? Do we have to look at how many people are coming on every single year?

GALLAGHER: Well, I think Bill Shorten is leading the work there and he announced some of the work that he’ll be doing, the reforms he’ll be doing within the scheme to make it more sustainable. In a sense, the target around 8% is around moderating the growth. It’s not around reducing investments. We know that there was going to be billions of dollars additionally put into NDIS over time to make sure that people have packages or supports they need. But we also want to make sure that it’s sustainable for the long term. And, you know, I have to say anywhere in government if you have a program growing faster than GDP, you’re having a look at it pretty carefully. In the NDIS that’s growing in the order of 14% year-on-year. We have to be responsible and to make sure that the NDIS is there for the long term and as part of that we need to make sure that the growth in that is sustainable.

JOURNALIST: Do you think raising JobSeeker will be inflationary, and if, so at what point?

GALLAGHER: There’s no doubt there isn’t the inflation challenge that this Budget has had to be mindful of. As we’re making decisions across the board, we are ensuring that we’re working hand-in-hand with monetary policy and not against it. And across the board, I mean, this isn’t one decision about one payment. The Budget is thousands of decisions across the board and making sure that we are mindful of the inflation challenge has been critical to some of that.

JOURNALIST: There’s a lot of support, or you’ve said that women need a lot of support. Obviously in the last Budget we had a women’s statement and so on. In this Budget, where do you think women need the most support? Where can you target women to really give them the boost that they need?

GALLAGHER: Well, I wish it was just one area to be honest. I mean, if you look at women’s economic inequality, and you look at women’s inequality across the country, it’s in a whole range of areas. It’s in access to programs, it’s in the workplace, it’s in dealing with the violence epidemic that exists across the country. It’s in housing, it’s in a whole range of areas. But this will be a very, very strong Budget for women in this country as it should be. If we are able to lift women up, if we are to create equality across the country, women, supporting women is going to be critical. And it’s critical to our economic prosperity as well. So we don’t just see it as something that’s nice to do because we should all treat women equally. it’s actually fundamental to our economic prosperity. And this Budget will reflect some of those decisions.

JOURNALIST: Will you lift the age of the single parent payment?

GALLAGHER: Those decisions will be clear on Budget night. It’s clearly an issue that they’re getting a lot of attention and it’s come to us through those reviews and I’ve made no secret that it’s something that the ERC has been considering.

JOURNALIST: When you’re targeting increases to welfare, what criteria do you work off and how do you choose who gets the increase and who doesn’t?

GALLAGHER: Well, again, speaking generally, I mean, this isn’t just around payments. I mean, these are some of the challenges before the ERC all the time. I mean when you’re looking at making additional investments into any program, you want some guarantee that there’s a need that exists. That this will make a difference and that you’re going to drive outcomes. And you know, that’s across the board, that’s not specifically about any one particular part of the Budget and we’ve been working through that really since we put the October Budget to bed. So this has been months of work by the Government to make sure that this May we do what we can to meet those immediate challenges. We do what we can to create opportunities for more Australians and we do what we can to make sure the Budget puts the economy on a stronger, more resilient footing. You’ll see that in the Budget.

JOURNALIST: Sorry, just specifically on that. If you are to choose between welfare payments, to raise one, not raise the other or raise a whole base, how are you going through and what criteria are using to choose the specific payments, specific people, specific Australians that get increases?

GALLAGHER: Well, we take advice on it, Charles. That’s what we do. You know, we work with the experts in the sector. We read the work that’s been done. We take advice from the departments and we look at what’s affordable and responsible in the current context and then we make decisions.

JOURNALIST: The $5 billion programs you said at the beginning of the press conference you said you had to find money for. Can you give us some examples of those sorts of programs that were going to run out of cash?

GALLAGHER: Yes, yeah, sure. And we can provide you a whole list as well. I mean, you know, Australia’s Radioactive Waste Agency, the [Australian] Digital Health Agency, MyGov to keep it operating the way it’s being operated now – I’m sure people use that all the time. But it’s also around under investments as well. So under investments in national parks, for example, in the departments like Veterans Affairs where we’ve seen long waiting lists for services to veterans. I mean, the former of government dressed up their Budget to make it look better than it was. There is no doubt about that, in my mind. They did it perhaps for political purposes for in an election campaign. Or they did it because they thought they could make these somebody else’s problem. And the result is we had billions of dollars that we’ve had to find to be a bit more honest about the state of the Budget books and you’ll see that reflected in the Budget on the 9th of May.

JOURNALIST: We’ve seen many Labor MPs come out, they’re backbenchers, saying that they do think the JobSeeker rate can be raised. Obviously, you’ve talked about what can be done in Budget, but what’s your response to so many of your colleagues coming forward so publicly saying that what are your thoughts on it?

GALLAGHER: Well I don’t think it’s a surprise really, you know. Good people right across the board want Government to do a whole range of things. And for them, some things are more important than others. Our job is to look at all of these across the board, all of these pressures, all of the investments that are needed across the board and come to a final position on those. And you’ll see that in the Budget.

JOURNALIST: You were just saying before, did the former government, essentially booby trap their last Budget?

GALLAHER: Yeah, it was booby trapped. Without a doubt. I mean, it’s taken us some time to uncover them because programs are ending on the 30th of June this year or next year. And we’ve worked through that, but there’s no doubt they were booby trapped. Now this was either because they were going to make it our problem, or because they wanted to just put forward a better set of books than actually was the case and we’re cleaning their mess up.