Senator the Hon Katy Gallagher

THE HON JIM CHALMERS MP, TREASURER: Really important day today, the first of July, where the Albanese Labor government's meaningful and substantial and responsible cost of living relief kicks in. From today, every Australian taxpayer gets a tax cut. Every household gets energy bill relief. Millions of Australians on awards will get a pay rise. And there'll be cheaper medicines and an extra couple of weeks of paid parental leave as well. This is how we do more than just understand that people are under pressure, we’re doing something about it. And our budget, as a central feature, had this cost-of-living relief, which is rolling out today. We know that by providing tax cuts, by providing energy bill relief, by making medicines cheaper, by making sure people get a pay rise, that we can take some of the edge off these cost-of-living pressures that we know people are under. This is how you deliver cost-of-living relief, not with more expensive nuclear reactors in 15 years’ time. Cost-of-living relief which starts today is Labor’s policy, the Liberals’ policy is nuclear reactors in 15 years’ time. Now don't forget, these tax cuts that come in today are the tax cuts that the Liberals and Nationals didn't want people to get. The Opposition Leader called for an election over these tax cuts. The Deputy Opposition Leader said that they would roll them back. And so these are the tax cuts the Liberals and Nationals don't want every Australian taxpayer to get. Were it not for our efforts, only some Australians would be getting a tax cut today. Because of us, every Australian taxpayer gets a tax cut today, as well as energy bill relief for every household and all of the other cost-of-living relief that we're rolling out. This cost-of-living relief which rolls out today is meaningful, it is substantial and it is responsible. We found a way to provide this substantial cost-of-living relief at the same time as we fight inflation and get the budget in better nick without smashing the economy. Do you want to add anything Katy, or we’ll take your questions?

JOURNALIST: Senator, can I ask you a question? Fatima Payman says that the parliament's more diverse than it's ever been. Does she have a point then, in saying that there should be more diverse opinions across the parliament and within the Labor Party caucus, like do the rules need to better reflect that diversity in Labor?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Well, it's welcome that the parliament is as diverse as it is. Our caucus is diverse. I mean, we saw that with the election of an Albanese Government. But it's also a privilege to serve in the Labor caucus and one of the responsibilities you have is that we stand together, we make decisions together, but we stand together. And so that diversity can be can, you know, is a part of our decision making. It's a core part of our caucus. Everyone brings their views and their experiences. We take decisions and then we stand together, and when somebody doesn't stand together, that doesn't strengthen us. And so there has been consequences for decisions that Senator Payman has made.

JOURNALIST: How has it made you feel, the fact that she hasn't stood with the party? And if she feels so strongly about this issue, do you think that she should quit the party?

GALLAGHER: Well, look, these are matters for Senator Payman now. The leadership of the parliamentary party has made a decision. That means until Senator Payman can agree to stand with us as a member of the caucus, that she should sit outside our caucus. So that's a matter for Senator Payman now. I mean, I think we've tried to respond, and we all accept – all of us deeply feel the issues in the Middle East. You know, the horrific events we're seeing in Gaza. We all do that, which is why our position as a government has been so strong under the leadership of the Prime Minister and the Foreign Minister. And so, we have tried to support Senator Payman. We've been mature and respectful. But ultimately, these are decisions that she has taken and the caucus has had to respond.

JOURNALIST: She hasn’t been expelled, though. So is this a new standard for other Labor Party members moving forward who cross the floor?

GALLAGHER: Look, I think the decision of the Prime Minister and the leadership group have made, around the fact that she was suspended, until she can confirm that she will stand with us as a member of the caucus, that –

JOURNALIST: But she won’t, so should she quit?

GALLAGHER: Well, again, that’s a matter for Senator Payman. We want her to remain within the Labor Party. She was elected as a member of the Labor Party. And she, you know, for the people of Western Australia, she is their Labor senator. But it is ultimately a matter for her. She has made decisions over the past week. There have been consequences to those decisions. But now, any further decision she takes is a matter for herself, and she has to be responsible.

JOURNALIST: She says she’s reflecting the rank-and-file members of the party. Does that then mean, does the caucus – you know, do you think the caucus then doesn't necessarily represent the members of the broader party?

GALLAGHER: No, well, I respectfully disagree with Senator Payman on that matter. You know, all of the issues in the Middle East are felt deeply across our caucus. They have been a subject of much discussion and, indeed, policy decisions that have been taken by the Australian Government, including at the United Nations. You know, we have consistently, for months, called for a ceasefire. We have supported the people of Gaza with financial assistance and aid. We have urged Israel not to act when it has threatened to do so. Our position has been very strong under the leadership of the PM and the Foreign Minister. And so, I don't agree with Senator Payman. I think those issues, the issues and concerns of our membership have been reflected in our decision-making.

JOURNALIST: Sam Mostyn is being sworn in today as Governor-General. Why is she the right person for that job?

GALLAGHER: Sam Mostyn is a person of enormous integrity, capability, experience, and commitment to public life. She is an outstanding candidate and she will be an outstanding Governor-General. It is an important moment today, with the swearing in of the Governor-General, and also the departure of the former Governor-General – the current Governor-General, who will shortly be former – in Governor-General, His Excellency David Hurley.

JOURNALIST: We know a lot of people are under pressure at the moment. Does the $700,000 pay cheque for the Governor-General, do you think that sits well with most people?

GALLAGHER: The Governor-General has been paid what former Governor-Generals have been paid. So, it is a salary that reflects the importance of the position. But any suggestion that there has been a significant pay increase for the incoming Governor-General is simply wrong. You know, former Governor-Generals have had their salary set by legislation, reflective of all of the income sources they have. And Sam Mostyn’s salary reflects previous practice.

JOURNALIST: Treasurer, how do you think Australians struggling with their bills feel about the new Governor-General getting an extra 200 grand?

CHALMERS: I think, as Katy said a moment ago, there hasn't been a change to the way that the Governor-General’s salary is calculated. The Remuneration Tribunal plays a role. It's linked to other salaries that the Remuneration Tribunal determines. And previous Governor-Generals have had to factor in other sources of income, and that explains the difference, as I understand it, between this Governor-General and the Governor-General that she replaces. Can I just say, in addition to what Katy said, it's a big day in the civic life of this country to have the 28^th Governor-General of Australia sworn in. We know Sam Mostyn as really quite an extraordinary person. An extraordinary business leader and community leader. Someone with vast achievements but also quite amazing dedication and empathy and integrity, as Katy said a moment ago. So it's a really important day. And I just wanted to add to Katy’s thanks for the outgoing Governor-General, His Excellency David Hurley, we thank him for his service and his dedication. But I think today is an important day, it's an exciting day, to have somebody of Sam Mostyn’s calibre sworn in as our 28^th Governor-General.

JOURNALIST: And on the economy, is there a chance Australia’s economy could fall into recession?

CHALMERS: That's not our expectation. But we do know that the growth in the economy is already quite flat. We saw that in the first three months of the year. And that's a combination of global economic uncertainty, combined with the impact of the rate rises which are already in the system, which are hammering discretionary spending, and household savings ratios, and the retail sector, and softening our labour market at the same time. And so, our job as a government, the Reserve Bank's job as well, is to get on top of this inflation challenge without smashing the economy and that's our focus.

JOURNALIST: What frustration are you sensing in the caucus about Fatima Payman’s decision to cross the floor?

CHALMERS: I don't pretend that people don't have strong views about it. Of course they do. And these are really important issues that we're grappling with. From my point of view, I have respect for every single one of our colleagues. And I believe, as Katy said a moment ago, I believe that in the Labor Party we make much more progress and we get much more done when we act collectively rather than individually. And unfortunately, in this instance, that has been breached. That sense of solidarity, that sense of collective purpose. And so I have the view that's been expressed by others, that we want to act collectively rather than individually. In that light, I think the response that the Prime Minister's Office announced last night is the appropriate one. But also, in recognising and not diminishing or dismissing how important these issues are, my focus has been overwhelmingly working with Katy to ensure that we roll out this cost-of-living relief today, that we fight inflation and we manage the economy in the most responsible way.

JOURNALIST: Are you worried you’ll get any blowback from voters if Senator Payman was expelled from the party?

CHALMERS: I haven't been making those kinds of calculations. The sorts of calculations we've been making are what's the average tax cut – 36 bucks – what does the average household with kids get – 63 bucks a week. Those are the sorts of things that we have been focused on, not on the electoral politics. You know, we don't dismiss or diminish how important this issue is. And we don't dismiss or diminish the legitimate pain that people feel in our communities because of the horrific, I think, senseless violence that's happening in the Middle East. But our focus, as the government's economic ministers, has not been primarily on that. It's been primarily on rolling out this cost-of-living relief.

JOURNALIST: Obviously, today is about the immediate relief to people out in the community. When will you turn your mind to issues like bracket creep and things like this? Is that a medium to long term objective?

CHALMERS: Bracket creep is absolutely central to the changes that we're making today. You know, this is genuine tax reform. This is tax reform that lifts two thresholds and cuts two rates and gets average tax rates down. Don't forget, and I saw the story that Shane wrote today, don't forget the highest average tax rates in the last 35 years or so were under John Howard, 26 per cent. And we're getting average tax rates substantially down. We are returning bracket creep, but we're doing that in a way that ensures that every taxpayer gets a tax cut, not just some. Don't forget how we got here today. Now this is actually a really proud day for us. Because had we not acted in January to make these tax cuts fairer and bigger for more people, then a lot of people would have missed out on a tax cut today had we not taken that action. And I am personally, and we are collectively, very proud of the changes that we put in place. It is tax reform. It does return bracket creep. It gets average tax rates down. And that's been a big motivation for what is rolling out from today. Thanks very much.