SENATOR THE HON KATY GALLAGHER
MINISTER FINANCE
MINISTER FOR WOMEN
MINISTER FOR THE PUBLIC SERVICE
MINISTER FOR GOVERNMENT SERVICES
E&OE TRANSCRIPT
TV INTERVIEW
THE BUSINESS
TUESDAY, 25 MARCH 2025
SUBJECTS: Federal Budget; Future Gas Strategy.
KIRSTEN AIKEN, HOST: Finance Minister, welcome. The Government has announced income tax cuts should it win another term, but this isn’t the type of structural tax reform economists wanted to see, is it?
SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Well, these are an important part of the Budget that Jim Chalmers just handed down. Some modest tax cuts, but ones that build upon the tax cuts that were handed down in a previous budget and all in all, I think together with some of the cost-of-living measures that we’ve got in this budget, they will help households meeting some of those pressures right now. We always look to see what we can do on the tax front. We have to balance that up with a whole range of other competing pressures on the Budget, but we think these are sensible, responsible, affordable, and they will make a difference once fully implemented.
AIKEN: But as it stands, even bracket creep won’t see the Budget return to balance in a decade. Does the Government need to do more to raise new streams of revenue?
GALLAGHER: Well, we’ve made no secret of the fact that the Budget’s under pressure and it has been since we came to government. I mean, managing the Budget, you’ve got to look every which way to make sure you can deal with some of those pressures right now, make room for additional investments in the future, and make sure that the Budget as a whole maps out the way forward.
AIKEN: Inflation is forecast to rise slightly in 2026. Is that a sign that the Government will stop subsidising household and small business energy bills at the end of this year?
GALLAGHER: Well, in terms of the Treasury forecasts, it’s actually an improvement from MYEFO, where it’s saying that inflation will return and be comfortably within the band six months earlier than they had previously expected. So, the inflation story is actually a positive one in this budget. There’s a–
AIKEN: But inflation spikes when the subsidies end?
GALLAGHER: Well, the energy rebates are built into the inflation forecasts, and where you see some of those rounding mechanisms that Treasury uses in their forecasts. But they are saying that inflation is sustainably back into band six months earlier and it will stay there. On the energy bill rebates, the point that you raised, look, we are looking at how we taper that support. They’re not an ongoing payment, which is why we’ve extended it for six months, just to help households through to the end of 2025.
AIKEN: What is the Government’s longer-term plan to reduce energy costs, and will the Government consider a gas reservation policy for the East Coast market during the transition to renewables?
GALLAGHER: Well, we’ve made no secret that gas is a firming fuel. We need it in the transition to renewables–
AIKEN: Do you need more of it?
GALLAGHER: Well, which is why we’ve put in the Future Gas Strategy and why we’ve been working hard, and I think the latest information the regulator has provided is that supply is secure up until 2028-29–
AIKEN: Are you ruling out a gas reservation policy?
GALLAGHER: Well, what I’m saying is we will always ensure that we have enough gas for the Australian needs. That’s absolutely the case and we’ve put in place all of that work in this term of government. But in addition to that, the future, what does the future look like, it’s all of the work we’ve done in the previous three budgets, the work Chris Bowen’s been doing, in modernising the energy system, the grid, through Rewiring the Nation, but also all of the work that we’re putting into making sure that there is a renewable energy future.
AIKEN: That said, is green hydrogen looking more and more like a pipedream?
GALLAGHER: No, I don’t think so. We’ve had some measures that go into that. I mean, the role of government, and you can see this through our production tax credits, through the Hydrogen Headstart program–
AIKEN: But $75 million allocated to hydrogen under that Hydrogen Headstart program wasn’t spent and has been redirected within the climate portfolio. Green hydrogen just isn’t working at the moment, is it?
GALLAGHER: Well, we’re prepared to support these emerging industries. We believe government has a role to support that, but we also, and this is part of our approach to budgeting – where there are underspends or there is a more effective or more immediate need for investment, we do expect ministers and their departments to reprioritise within the existing appropriation. The Budget isn’t just a continue to add on scenario, there has to be spending restraint, there has to be discipline, and we have to make sure that every dollar of taxpayers’ funds is used in the most efficient and effective way. And you see that in the climate portfolio, but you see it in many others as well.
AIKEN: Katy Gallagher, thank you for joining the program.
GALLAGHER: Thanks for having me on.
ENDS
