Senator the Hon Katy Gallagher

ANDREW CLENNELL, HOST: Joining me live now is Finance Minister Katy Gallagher, of course a former ACT Chief Minister. Thank you so much for your time. And I will get to the ACT election in a moment, Katy Gallagher, but I wanted to start with this issue around the Order of Australia medal being stripped from the former head of Home Affairs, Michael Pezzullo. And you’re an ex officio member of that Council of the Order of Australia. Were you privy to this decision or part of it?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: No, I wasn’t, Andrew. Good morning, thanks for having me on. I was aware just before the matter became gazetted, I think, on Friday. This Council makes their decisions. They make that recommendation to the Governor-General and then it’s gazetted, as far as I understand.

CLENNELL: So, do you know why the medal has been stripped?

GALLAGHER: Well, no. I mean, I haven’t been given a statement of – any sort of briefing or explanation. I mean, I presume it is over the matters that have been ventilated in the media over his communications with known members of the Liberal party. I presume that was what it was relating to.

CLENNELL: I just wonder about this sort of thing. Shouldn’t it take some sort of criminal charge or corruption finding to strip someone of one of these medals? Why does a workplace misconduct issue, which is what the Public Service Commissioner’s found it to be, apply?

GALLAGHER: Well, I think those are questions for the Council, Andrew. I think they have a criteria, I imagine they look at it and there have been other matters in previous times when, if they feel the Order of Australia or those medals have been brought into disrepute, they consider it against those criteria. But that really is a matter for them. They consider this. They make a recommendation to the Governor-General.

CLENNELL: Do you think it was the right decision they’ve made, or are you pretty agnostic about it, or do you sort of question it?

GALLAGHER: Well, I trust in the Council that they’ve considered these things. I think it’s always pretty hard because it’s such a public, you know, matter – when it becomes, you know, public. But I think Mr Pezzullo’s been dealing with those matters for the last 18 months or so. I saw his statement, I think he was a long-term, career public servant in Canberra. He did many good things, but this is a matter for the Council. They’ve had a look at it, they’ve considered it against their criteria and they made a recommendation to the Governor-General.

CLENNELL: Let me ask about the ACT election result, then. It seems the Labor-Greens alliance has got there again and it is extraordinary, isn’t it, seven terms in a row? Do you welcome the result?

GALLAGHER: Obviously, I think Andrew Barr ran a great campaign. He’s been a very effective, long-term Chief Minister. Canberrans are very astute with how they vote and how they use the unusual electoral system, the Hare Clark system here, to make sure it returns the parliament they want. You know, we don’t take anything for granted, I don’t think Andrew takes anything for granted. He’s campaigned hard. We’ve seen the rise of a couple of independents, which is new for the Assembly, the Greens have come back from their six seats, they look like having maybe three. But the ACT community is a pretty progressive place, so I don’t think it’s unusual that you’d see a fairly progressive parliament with a minority government supported by a crossbench.

CLENNELL: I wanted to turn now to the unemployment figures during the week. A lot of speculation that that unemployment rate still being this low, 4.1 per cent, means we’ll have to wait longer for a rate cut. What do you make of that speculation?

GALLAGHER: I think everyone’s looking at all of the economic data, Andrew, and sort of trying to work out – particularly around interest rates. I mean, employment data will be part of it. But so will quarterly inflation figures and a whole range of other information the Bank will look at. I mean, it is a pretty extraordinary result, I have to say, that we’ve still got jobs being created and unemployment so low in this country. A million jobs in the first term of the Albanese government is an extraordinary result, when you think about it. And this is part of the balance, right? Bringing inflation back down to target band without losing lots of jobs. And that’s what we’re seeing at the moment, we’re seeing inflation come back and the labour market hold pretty steady, which is a really extraordinary outcome.

CLENNELL: Is it representative of the economic situation, though, the unemployment figure, when it seems that somewhere between 60 and 90 per cent of jobs at the moment are being created from public funds? Public sector workers? I mean, isn’t the private sector and the economy doing a lot worse than the government are saying?

GALLAGHER: Well, I think when you look at the jobs – and I saw that claim from Senator Cash saying that it’s all public servant jobs, and when you look a bit deeper, it’s certainly jobs that are in the care economy. So, you see that in health and education, but also more broadly across the care economy. And that’s I think a very good outcome, too. So, it’s not just what I think Michaelia Cash would like to demonise as public servants, but it’s a much broader scope of jobs being created and that’s a good thing too, because we have a lot of shortages in the care economy sector as well. So, if we’re seeing jobs created, people taking those positions, that’s a great result. But again, I say – when we look around the world, when you’re seeing – we are doing very well on the jobs and keeping people in employment. Which is a really important part of our economic plan. And you know, I think when we look at what’s happening here compared to other countries, we’re doing pretty well, acknowledging, of course, as we always do, that people are doing it tough.

CLENNELL: Is the care economy holding up the economy, though?

GALLAGHER: Well, when you look at some of the jobs that are being created, the services side of the economy is an important part of our labour market. You know, we need people in aged care, in disability, in early education and care. And we have been, and State governments have been as well as Commonwealth, looking at how you resource the public sector properly. When you look at schools and hospitals and places like that, these are critical workers in critical jobs. And I don’t think they should be demonised because they’re in that category of worker.

CLENNELL: There was a story in The Australian yesterday featuring correspondence between the Treasurer’s Office and the Prime Minister’s Office, where the Treasurer was encouraged to add a line to a speech about the Future Made in Australia and the Treasurer declined to put a line in his speech, then, that the PMO suggested, saying that the economy is weak. Do you agree the economy is weak?

GALLAGHER: I think we’ve been seeing elements of weakness across the economy. In the National Accounts and other data. And we’ve been pretty upfront about that, I think. There’s certainly some challenges that we’ve been seeing in relation to growth and productivity that we want to address. So, I don’t think that’s unusual. And I did see the story as well in the paper yesterday – and again, I don’t think there’s anything surprising, that you would see chats between offices about a big speech that one of the ministers were giving. It’s a pretty normal way of conducting business across executive government. I certainly share my speeches. I often share them with Jim, with the PMO. And you know, if they’ve got suggestions to make that would improve it – or ones that I don’t agree with – your words are your own, so you make those comments yourself.

CLENNELL: Let me ask about the decision by the Treasurer to ask his department for advice on negative gearing changes. Were you privy to that call for advice?

GALLAGHER: Look, certainly the discussions I’ve had with the Treasurer – and I think he’s addressed this in lots of media conferences, including ones where I’ve stood next to him – again, it’s not unusual for treasurers or ministers to be seeking information that are matters being ventilated in public discourse. It’s, again, part of us doing our job properly. There’s an annual statement that goes out around what’s happening with the tax system, so certainly negative gearing, capital gains tax, would be part of that. I think it’s really part of the ongoing job of the Treasurer and the Treasury to be looking at all these matters and seeing what’s happening, both in the utilisation of it and also how much are those tax concessions – in this case, impact on the Budget. It’s important information.

CLENNELL: What did the advice say? Have you seen the advice?

GALLAGHER: Well, I don’t know that there’s a specific piece of advice. I certainly haven’t seen anything. I think it’s more an ongoing discussion between the Treasury and the Treasurer about matters relating to tax more generally that happens as a normal part of the Treasurer doing his job. And you know, I think the Treasurer and the PM and others have made it clear that that isn’t part of our housing policy. Our housing policy is focused on generating supply of housing, which is the real constraint in the housing market at the moment.

CLENNELL: Does Treasury want to see this? Does Treasury want to see changes to negative gearing?

GALLAGHER: Well, I don’t think the Treasury has a view on these matters. And I don’t get briefed by the Treasury, so I can only speculate. But it’s part of them doing their job. They’re responsible for all matters relating to receipts, the tax side of the Budget, and I imagine they brief the Treasurer about what’s happening with that. But again, you know when we’re looking – and I work with the PM and the Treasurer on these matters pretty much on a daily basis – the focus on all of our discussions have been on supply of housing. How do we generate more supply of housing and how do we get more people into owning their own home?

CLENNELL: Speaking of which, Peter Dutton’s come out with his policy yesterday for a $5 billion fund for infrastructure to help greenfield developments off the ground. He also wants to freeze the National Construction Code for ten years, says it’s adding too much to the cost of homes, all these environmentally-friendly, energy-efficient measures. What do you make of his announcement yesterday?

GALLAGHER: Well, on the information I can see, it looks like he’s kind of picking up one of our policies. So, we’ve already got one about enabling infrastructure. It is one of the constraints at the moment, particularly on greenfield development, all of the drains – all of that enabling work that councils and state governments need to put in. So, we’ve already got a program that does that. So it looks like it’s essentially copying that. And I think on the other side, we already know he’s going to cut about $19 billion out of housing. He’s already made that clear through getting rid of the Housing Australia Future Fund, the Build to Rent, Help to Buy, those programs – which we’re trying to get a couple of them through the Senate. The HAFF’s already established and already commissioning projects. So, we know they’re on the chopping block from Peter Dutton. And this program he announced yesterday seems largely to be the program we have in place with the States and Territories.

CLENNELL: Did the Prime Minister ask your opinion before going to buy the $4.3 million home at Copacabana?

GALLAGHER: No, he didn’t ask my opinion –

CLENNELL: What is your opinion?

GALLAGHER:What is my opinion? Well, I think he and Jodie are entitled to buy a house and start their lives together. I think people do that all the time in this country. Obviously, this is a bit more public than most people’s house purchases, but I don’t think it’s – I think some of the criticism of it’s unfair. He and Jodie are starting a new life. He’s selling a property and he’s buying one with his new partner, close to where her family live. I think PM’s and anyone else is entitled to make that decision.

CLENNELL: Do you see any political danger out of the decision, whether it be fair or not?

GALLAGHER: I think Australians see things like this and I don’t think – and I heard your comment about some of the research, I don’t know, that you were talking about at the head of your show – I think people understand that he’s entitled to buy a house. He’s worked hard. He’s starting a new life with Jodie. They’re very happy. And I don’t think it’s surprising that the two of them want to buy their first house together. And I know from working with the PM – and I do really closely work with him – is his focus, 100 per cent of the time, is on cost-of-living and housing for other people. That’s his focus. And making sure we’re doing whatever we can to get the supply of housing where it needs to be. And I don’t think this changes that at all.

CLENNELL: How far advanced are you in your Budget deliberations? Is there going to be a Budget in March or an election then? And is another surplus possible, or it’s pretty difficult to achieve?

GALLAGHER: Well, we’re pretty in the thick of it now, Andrew. We’re doing our mid-year economic update. So, the MYEFO process is well underway. And ERC is meeting a couple of times a week. And that will continue, really, through to March. So, the March Budget has been scheduled in the calendar. And I really think that we’re sort of in that process and that process probably won’t finish now until March. In terms of the surplus, we’ve got the Budget in much better shape. We’ve done two surpluses. We’ve halved the deficits going forward. But I think in this financial year, it’s going to be pretty tough to find – I think the deficit, you know, to try and find savings to push that into surplus would be hard. The job gets harder each year. I think we found a lot of savings, but we’re focused on making sure we can repair the Budget where we can, but also provide all of that cost-of-living relief that we’ve been funnelling through, through energy bill rebates and investments in Medicare and medicines and things like that. So, we’ll continue that approach both in MYEFO and in the Budget.

CLENNELL: Just briefly, there was a report in the papers this morning there might be some sort of solar subsidy or battery subsidy and that both sides of politics are looking at it, do you think that could be in the mix?

GALLAGHER: Well, I think looking at how we support households with the energy transition is a critical discussion for government. We’re looking at all ways we can do that. We’ve been doing it with energy bill rebates. Obviously, the States have programs usually around solar and batteries. And you know, if we can do something that supports households to deal with the cost of the energy transition, of course we’re considering all matters relating to that.

CLENNELL: Okay. Nearly out of time here. And I’m going to just try to get a couple of things in. So, I’ll ask you to be brief if that’s okay. The allegations at Channel Nine, do you share the concerns of some staff about how that’s being handled? Do you have a reaction to that?

GALLAGHER:Well, I think improving workplace culture is really important. They’ve obviously had this review. I think the key thing here is how the implementation of the recommendations go, that’s what’ll really show whether they’re actually leaning into it and dealing with these complaints around culture.

CLENNELL: And the Queensland election Saturday night. Widely expected Labor will lose. What are you expecting?

GALLAGHER: Well, I’m not from Queensland, so – you can ask me all the questions about the ACT election, I get a lot more. Obviously, I can see the Labor campaign fighting hard to win and I’ll leave that to the good people of Queensland.

CLENNELL: Katy Gallagher, thanks so much for your time.