Senator the Hon Katy Gallagher

PATRICIA KARVELAS, HOST: Senator Katy Gallagher is the Minister for Finance and Women and our guests this morning. Minister, welcome.

SENATOR THE HON KATY GALLAGHER: Morning PK, thanks for having me on.

KARVELAS: Is the Shadow Treasurer right when he says the Budget and the economy are both in a strong position?

GALLAGHER: No, I heard those comments yesterday and it's actually absolutely not the case. In terms of the Budget, which is has been my focus, I mean, we're pleased to see some of the recovery in the economy and we're seeing that in some of those tax receipts coming through, but the Budget is in structural deficit. It was mismanaged by the previous government. They didn't account for a whole lot of spending that we're now having to go through and put in place and we have significant challenges going forward, Notwithstanding this final budget outcome, which as you said in your introduction, has some temporary improvement to the Budget but not an improvement that we will see flow through the Budget because of some of those issues.

KARVELAS: Before the pandemic, Labor was critical of the government's refusal to embrace the RBA's calls for fiscal reform. Do you now back Philip Lowe and his call for a combination of tax rises, spending cuts and/or productivity boosting reforms?

GALLAGHER: Well, in terms of the Budget, which again is sort of taking up all of my time at the moment, we have been very clear and were clear in opposition that we need to be absolutely fiscally responsible and look at where we can make sensible adjustments for budget repair. And that is the work that's currently before me now. I mean, these are, you know, big challenges. I'm not going to pretend they're easy. You can't just recover a $40 billion or $50 billion dollar deficit that's going through the out years overnight. I mean, they simply, those decisions would be almost impossible, absolutely impossible and cause a lot of harm, but we have to make sure that we are making those reprioritisation decisions, looking at where we can make savings, looking at adjustments to programs. That is the work we're doing now. We want to support the work the RBA is doing, not make their job harder. And part of that is Budget repair.

KARVELAS: Just talk to me about waste and rorts, that category that you've been talking about and why you're now saying it might take longer than expected to deliver those savings.

GALLAGHER: Well, this was an election commitment of ours as you remember that we wanted to go through the Budget line by line and look where we could make adjustments. I mean, we were critical of some of those big funds where big loads of money were sort of, you know, just packed into the Budget to seemingly for political benefits. So, we've seen some of those audit reports that are critical around that. And there were some decisions in the in the last Budget where you know, large amounts of money were placed in programs, particularly I think one was for example is like the regional accelerator program, which didn't have a lot of detail around it. We've been looking at those to see whether there are, you know, business cases, whether there's evidence to support those decisions, to make sure that that money is going to where it's needed or that it's needed in the first place. And we'll make some early decisions on that in October, obviously, we've only had a few months to work through that. And then my view as Finance Minister, because of the state of the Budget, but I think also good practice, is that we will keep this audit going on in an ongoing sense to look at where we can drill down and where we need more time to work through and in particular looking at areas of duplication or where we've programs that become layered and layered on top of each other because, you know, this is part of the equation here to sort of recover the Budget. Not only are we going to be dependent on some revenue coming in, we have to make sure that on the payment side and the spending side that we're actually making sure that that money is well spent and actually delivering on our policies and what the Australian community needs.

KARVELAS: Everyone from the unions to the Coalition Government in New South Wales the Treasurer, Matt Kean, wants you to fast track changes to the child care changes bringing them forward to January. You've said no thus far. Is it simply a workforce issue? Why can't you do it earlier? Is it actually the logistics?

GALLAGHER: Well, there's certainly an element to that, PK, is getting the systems in place. I mean, this is going to be a big investment in childcare. It's, you know, it's massive. It's our biggest commitment that we took through the election campaign. We want to make sure that when we deliver, it's delivered smoothly through our you know, the systems through Services Australia and the rest of it. And, you know, we are, of course, acutely aware of some of the issues that the child care or the early education sector are talking to us about workforce as well. That's not the --workforce issue is sort of separate and we have to work on that separately. But we do want this reform to come in and be implemented smoothly. And that will take a little bit of time.

KARVELAS: So there's new calls for it to come forward even from the New South Wales Government. Are you rolling that out absolutely, here?

GALLAGHER: Well, our commitment and the decision we've taken is to implement it as in accordance with our election commitment, which is that it comes in in the first of July.

KARVELAS: Just very briefly, what are you hoping the ACCC's review of the rising costs of childcare will actually achieve? Do you believe operators are price gouging? And how can you stop them if they are?

GALLAGHER: Well, we know that childcare is one of those areas, which really hits household budgets and particularly if you've got a couple of kids in early education and care, it's a massive cost on the family budget. So we want to make sure that we're getting the right information about what some of the drivers of those cost increases are so that you can actually respond to it. And I think that's the purpose of having this commitment and putting it in place. I mean, we know that making sure the early education system is fit for purpose, delivers for families, supports our economy, you know, is critical to the future going forward and understanding why some of those cost increases happen and how to deal with those is a really important part of the work going forward.

KARVELAS: Just finally, what's your reaction to these extremely disturbing allegations about how Aboriginal players were treated at Hawthorn during the premiership peak from 2008 to 2013?

GALLAGHER: Well, I've only just seen some reports, but obviously, you know, very distressing. I think anytime you see things like this, you know, I think it does shock people and that's no different, we're no different or my responses in any different to that. And I have no doubt that these matters will be looked into very, very carefully.

KARVELAS: Thank you for your time.

GALLAGHER: Thanks PK.