SENATOR THE HON KATY GALLAGHER
MINISTER FINANCE
MINISTER FOR WOMEN
MINISTER FOR THE PUBLIC SERVICE
MINISTER FOR GOVERNMENT SERVICES
E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO NATIONAL BREAKFAST
WEDNESDAY, 29 JANUARY 2025
SUBJECTS: Upcoming inflation data; interest rates; Deloitte report; March budget; tax reform.
SALLY SARA, HOST: Well, all eyes will be on the latest inflation data set to be released this morning and whether it gives the Reserve Bank enough reason to cut interest rates next month. The Federal Government is hoping that inflation is on the way down, so that voters get some long-awaited rate relief before polling day. I’m joined now by the Finance Minister, Katy Gallagher. Minister, welcome back to Breakfast.
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Thanks for having me on, Sally.
SARA: Are you confident that the Government has created the right conditions for the RBA to cut rates?
GALLAGHER: Well, we’ve been making sure that the decisions we take don’t work against the RBA and their attempts, you know, response to get inflation down. So, I think the statistics speak for themselves. When we came to government, inflation had a 6 in front of it, it now has a 2 in front of it. And at the same time, we’ve been seeing that welcome progress, we’ve been seeing quite extraordinary job creation, over a million jobs, 1.1 million jobs created, almost half of those going to women. And we have not seen any quarter of negative growth, unlike many other countries, and wages are growing, for the first time really in a decade, we’ve seen four quarters of wages growth. So, look, our decisions – we’ve been very mindful of the inflation challenge, obviously, it’s been the key economic challenge since we came to government, but we have seen very, very substantial progress in seeing inflation come down and that’s really important because that obviously affects what people – you know, how they manage their household budgets.
SARA: Many households have certainly been feeling the effects of a per capita recession. If there’s no rate cut next month, are there any fiscal changes you’d consider at this point?
GALLAGHER: Well, we get that people have been doing it tough, feeling under pressure, which is why we have ensured that through our budget, we’ve been able to find very responsible ways of providing some relief for that, whether it be the energy bill rebates, the tax cuts, childcare subsidies, rent relief – those types of things which can support households but not add to the inflation challenge. And as we’re putting our budget together – it’s due on the 25th of March – obviously we are mindful of the economic conditions, how people are feeling out and about and whether there are any further responsible decisions we can take that can assist households as we navigate this time.
SARA: This is Radio National Breakfast, my guest this morning is the Finance Minister, Senator Katy Gallagher. Minister, do you agree with Deloitte’s latest quarterly business outlook today that living standards in Australia won’t recover to pre-pandemic levels until 2030?
GALLAGHER: I’ve had a quick look at that Deloitte report and, you know, I think the first point I’d make is that living standards were dropping under the former government and they’re now starting to improve again. So again, that’s reflective of some of the decisions we’ve taken and how we’ve been able to generate wages growth in particular to help households out. But I think the report also says inflation is down, wages are up, unemployment is low, much lower than other countries. So, we’ve been able to keep people in work as we’ve navigated this time. And it also acknowledges that we’ve made some progress in cleaning up the budget. So, there’s more to do and I’m not pretending that people aren’t still feeling under pressure, but we’ve got the budget in better shape, we’ve got wages moving, we’ve provided cost-of-living relief, tax cuts to help households throughout this time, but there is more to do, obviously.
SARA: Do you think the worst has passed?
GALLAGHER: Well, I think again, if you refer back to the Deloitte report, it’s certainly making some statements from their point of view that they think we are through the worst. And that really that narrow path that the Bank’s been talking about, or a soft landing, really I think what the economists are saying there is the way to navigate this inflation challenge and the cycle of rates increases without seeing the country go into recession or see the significant loss of jobs and certainly from where we are today, it looks like that’s a real possibility. So, I think it’s quite – not withstanding the fact that households are under pressure – it is quite a positive story to recognise that really, in relation to jobs, wages and some of the challenges we’ve been seeing globally, that we have been able to manage some of these pressures and provide cost-of-living relief at the same time.
SARA: The Government is insisting that we’re still going to see this budget in March, as you were saying. The Treasurer says the Government is focused on rolling out cost-of-living supports it has already announced. Does that mean that there won’t be any further cost-of-living measures announced?
GALLAGHER: Well, we’re putting the Budget together now. Really, we’ve been working on it over the summer and that will continue. It’s on the 25th of March. And I think the Treasurer’s comments are accurate. You know, we’ve got free TAFE, we’ve got HECS relief, we’ve got the childcare subsidies, the energy bill relief, the rent relief, the tax cuts still flowing through. So, we’ve done quite a bit of work in trying to provide cost-of-living support. But the Treasurer’s also said, and I work closely with him in these budget decisions – we look at all of the information available to us when we’re finalising budgets and we make the decisions in the best interests of people and the best interests of the country. So, we haven’t landed the final budget yet, more decisions to take.
SARA: There’s widespread agreement that Australia is overly reliant on income taxes, but the only major tax reform proposals currently are from Allegra Spender. Are the Teals doing more on tax reform than Labor?
GALLAGHER: Well, I think again, if you look at the tax cuts, how we reshaped the tax cuts, that’s been a significant part of this agenda of this term in parliament. And you’ll remember that Peter Dutton wanted to go to an election over those, because he didn’t want to support them. But they’ve been an important part. We’ve also brought forward tax reform in relation to multinational tax reform and we’ve still got some super tax reform before the Senate that we would like to pass this term. So, I think you’ve seen that we have been making changes and putting forward reform measures to the parliament. That’s the job of the government, responsible government.
SARA: But the stage 3 tax cuts in their original form were a Coalition initiative and when we look at those super tax reforms, they’re only for people with very, very high super balances. These are not major tax reforms.
GALLAGHER: Well, we think they are still meaningful and responsible, and we think they are changes and reforms that we should pursue, and we have had that in the – if we’re talking about super tax reforms, we’ve had that in the Senate for over a year now, I think, probably a year. And we’re hoping to get that passed. Tax reform isn’t easy, particularly in a Senate with a makeup like ours, and so you have to negotiate and talk with other crossbench members about how to navigate that. The Coalition really say no to everything we bring forward to the Senate. And that requires patience. But you know, we are hopeful to get that through.
SARA: What does the Trump administration’s decision to pull out of the OECD tax agreement – what does that mean for the ability of multinationals to avoid paying their fair share of tax and what does it mean in Australia, do you think?
GALLAGHER: We are, and you’ll see this from some of the tax reform that I’ve done, that the Government has done over the past year or three years really, we are absolutely focused on making sure that multinationals pay their fair share of tax. And that doesn’t change with the change in administration in America. You know, it’s vital to have that revenue coming in to help pay for things like Medicare, aged care, childcare. I mean, this is the point of raising revenue, to fund services. And we’ll continue to work to make sure that happens here and of course we will continue to work with the United States as the new administration comes in. We know that they’re going to bring a different suite of policies, but we know our relationship is close and that we’re confident we’ll be able to navigate those changes.
SARA: Minister, we’ll need to leave it there, thank you very much.
GALLAGHER: Thanks so much.
ENDS
