Senator the Hon Katy Gallagher

NARELDA JACOBS, HOST: The Government has earmarked $14.6 billion worth of savings and $8.8 billion in unavoidable spending in tomorrow’s Mid-Year Economic and Fiscal Outlook. For more, we’re joined by Finance Minister Katy Gallagher, who’s just finished an hour-long media conference. Time to do a bit more media for you, Minister. First to the savings, where will the $14.6 billion be coming from?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Well, they come from a range of areas, and thanks for having me on as well, I should say. They’re coming from a range of areas across government, so it’s part of our reforms in aged care – where we’ve built in some of those structural saves – but also where we’ve asked departments to look at existing expenditure and see whether they can reprioritise within their current budgets. So, it’s a mix of a range of those things and it makes a difference when we’ve got so many different pressures hitting the budget at the same time, to try and find savings, because that allows us to find room for important investments in health and aged care and NDIS and all of those services people rely on.

JACOBS: Have you asked departments to defer spending until after the budget to make some of these savings?

GALLAGHER: No, look, we haven’t. I mean, we’re clear in every budget update and tomorrow will be no different, there will be adjustments to some of the funding profiles, as you would expect, but that’s a normal part of any budget update. And so, you’ll see some of that. Sometimes when you fund a program, the money doesn’t get out the door as fast you expected it to. You provide those updates. But no, this will give you a current state of the budget, all the pressures on it and some of the decisions we’ve taken.

JACOBS: Some of the savings are within the NDIS and some of the spending is with the NDIS, in fact there’s an extra billion dollars being spent. How is that spend necessary?

GALLAGHER: So, that’s important in terms of getting some of the reforms through, because there’s going to be a lot more work to make sure participants are living within their plans, and so that needs people to do those assessments. But over the longer term, the good news is that some of those reforms to the NDIS that have been led by Bill Shorten have actually seen some of those – you know, I guess the growth trajectory – taper a little bit. So, we are seeing some really important signs of progress on the NDIS, but at the same time, we need to keep investing in it as well to make sure it’s there to help people who use the scheme.

JACOBS: Minister, you’ve said that you’re going to correct what you’ve called under-investments. What sorts of things are likely to be scrapped?

GALLAGHER: In terms of the NDIS or more broadly?

JACOBS: More broadly.

GALLAGHER: There’s areas in the terminating measures or unavoidable spendings where we are actually making those investments, and then there’s a range of areas in parameter variations, which are automatic updates to spending where we’re seeing continued pressure on the budget. So, you’ll see all of that in the budget – in the MYEFO, I should say. It’s not a budget. Because that’s really giving Australians the best kind of eyes on the books as they sit.

JACOBS: Was that a Freudian slip, because –

GALLAGHER: No, I often call it the mid-year budget, mid-year economic update. We’re preparing for the budget, we’ve got one which is forecast in March and we’ll move seamlessly from MYEFO into that. In a sense, we’ve been doing work on the budget at the same time as we’ve been finalising MYEFO.

JACOBS: So, is there definitely going to be a pre-election budget?

GALLAGHER: Well, that’s what we are doing all the work for. We’ve got one scheduled for one of the final weeks in March and to get that in shape, obviously we’ve got to have to be making decisions now. So, the Treasurer and I have been doing that work now and it’s planned for that last week in March.

JACOBS: Just finally, $8.8 billion in unavoidable spending, does that include cost-of-living relief?

GALLAGHER: Well, you know, every budget that we put together, we have tried to work out ways to put investments into cost-of-living. So, you’ll see some of that come through MYEFO, like the HECS reductions in HECS bills for people to try and make that difference. But the energy bill rebates and all of those other investments in Medicare and childcare, you’ll see that flowing through MYEFO. And you know, honestly, we look at what else can we do to help people through these difficult times. That’s also been front of our minds. But you know, we’re also trying to deal with the inflation challenge at the same time, we want to keep making the welcome progress that we’ve made to date, keep getting that in the right direction.

JACOBS: Finance Minister Katy Gallagher, thank you so much for joining us.