Senator the Hon Katy Gallagher

HAMISH MACDONALD, HOST: As you heard in the news, Tropical Cyclone Alfred is expected now to hit late on Friday. Millions of people are in the path of the storm, there’s already thousands of calls for help to the SES. Perhaps you know people up on the North Coast, perhaps you’ve got family there, perhaps you’re listening up in northern parts of New South Wales. We’re doing all of this without a national messaging system. The Federal Government had promised one, that it would be ready, in fact, by the end of 2024, many people are now asking, where is it? Katy Gallagher is the Federal Finance Minister, lots involved in her portfolio, she’s here in the studio with us this morning ahead of an election being called any moment now. Good morning to you, Senator.

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Good morning to you, Hamish.

MACDONALD: Where is this national messaging system? It was promised that it would be ready by the end of last year.

GALLAGHER: So, this is the new national messaging system. So, it’s still under development, fully funded. It was always the intention to use the existing system for this disaster season, so the 2024-25 disaster season, and certainly to all those people who are in the firing line of Tropical Cyclone Alfred, we are thinking of you and a lot of work is being done across New South Wales, Queensland and Commonwealth governments to make sure people can be as prepared as they are and all governments are pulling in the same direction.

MACDONALD: But why isn’t this system ready now? It was said by the previous minister, Murray Watt, that it would be ready by the end of 2024. We’re now being told it’ll be mid-2027. What’s gone wrong?

GALLAGHER: Look, this isn’t in my portfolio, but from what I understand it does require quite a lot of coordination across states, territories, Commonwealth and the telco providers themselves. I haven’t seen that date as the date it won’t be ready until, but I understand the intention for this disaster season was that this messaging system wouldn’t be available and so all of our planning has been done with the existing messaging system. And it is only one way –

MACDONALD: Which did fail in certain areas during previous emergencies, right?

GALLAGHER: Well, I think concerns had certainly been raised by people that felt that the warnings that they’d been provided weren’t timely enough. But I think if anyone has been watching all of the work that’s been going on this week, a lot of work has been put in to make sure people are prepared, that information is available. I saw messages going out last night about evacuation centres and areas where there was concern in northern New South Wales yesterday. So, I think certainly there isn’t a lack of information and effort going into trying to make sure that people are prepared and kept safe. And all governments are working together.

MACDONALD: In terms of the Defence Force, obviously there were issues during the previous Lismore floods about getting the military deployed. Does the Defence Force stand ready? Can the Government deploy, if necessary?

GALLAGHER: Certainly, it’s the state governments who lead on the emergency request. Assistance from the Defence Force, of course that will be available, the Defence Minister has been clear on that. And I think you saw that with the floods in Townsville recently, where it was very quick for the Defence Force to be there to rebuild bridges and infrastructure so that communities could be reconnected. And you would see and expect the same of that. I know that assets have been moved closer to that location so that they are ready to be there if the requests come in. And we are right across the Commonwealth Government in every portfolio – mine, obviously, in Government Services has a lot to do about making sure when payments are needed for people, emergency payments, that Services Australia is able to step up and provide those really quickly, so there’s a lot of work going on there as well.

MACDONALD: New research from the Australia Institute shows that one in five Australian households are not actually insured, or they’re underinsured. A big problem going into this cyclone. We’re hearing lots about that. Zali Steggall’s going to be joining the program later this morning, she says the Government was supposed to release a national climate risk plan last year. She sees that as part of a complex picture around insurance as well as underinsurance. But why hasn’t that climate risk plan been delivered?

GALLAGHER: Well, there’s been a lot of work done in this space. Again, that’s not my area so I’m not sure I can give you the definitive answer –

MACDONALD: Come on, you oversee a lot of it with Finance, don’t you?

GALLAGHER: I do, well, certainly when it needs resourcing. But a lot of work has been done and I’m sure there will be time to talk further about why the cyclone has come and come so far south and come quite late, but I think really the focus for all of us now is on making sure that people are safe and that all our effort goes into supporting those communities who are extremely anxious, as you would expect, in southern Queensland and northern New South Wales, that’s out entire focus, one hundred per cent, over the next few days.

MACDONALD: And Zali Steggall coming up after nine o’clock this morning. I’m speaking to the Federal Finance Minister, Katy Gallagher. 1300 222 702 is the number. Do you think Australia is getting better equipped to respond to these sorts of disasters? I’d like to hear from you on that this morning. Maybe you’ve got friends and family up on the North Coast or Queensland, battening down the hatches ahead of this storm. Katy Gallagher, one of Donald Trump’s key picks at the Pentagon has said Australia’s defence spending should rise substantially, go to three per cent. We’re not really close to that, we’re above two per cent and moving higher. Three per cent would be a big difference. Will you commit to doing that? Obviously, Donald Trump’s making it clear that he doesn’t want sort of discussions about this stuff, they will just say what they want and smaller nations are meant to jump to it.

GALLAGHER: Well, I think the first point I’d make is that we’ll make decisions about the defence budget based on information that our agencies give to us about what’s needed and that’s what we’ve done since coming to government. So, yeah, it is increasing, it’s going from I think just below two per cent when we came to government. It’ll go to two point four percent, that’s involved an extra $50 billion going into the Defence department. So, we are talking large investments and there’s no doubt that we have to resource keeping Australians safe, keeping the nation safe is the number one priority. So, where we get advice about what needs to be spent –

MACDONALD: But to the question of three per cent, it’s a no, is it?

GALLAGHER: No, what I’m saying is we respond to advice from our experts about what is needed to keep Australians safe. We’ve done that since coming to government, that has required extra investment and so you wouldn’t rule out that further investment is required. All of the advice coming was that we were underprepared, and we needed to make sure that we were putting more money in. So, we’ve put $50 billion in, that’s not small change that you find under the couch. That’s a lot of money that we’ve found and invested and we’ll keep making those decisions. You know, if we get further advice that more needs to be done and that’s entirely possible, we would make sure that we are keeping Australians safe by those very significant investments.

MACDONALD: What’s your view about the best way to deal with Donald Trump? Is it to stand up to him? Is it to be loud back? Is it to be really firm in your own positions? Obviously, we’re seeing different leaders around the world take different approaches.

GALLAGHER: Well, I think the position the PM has taken, and we’ve had good engagement with the new administration through the PM, the Deputy PM, the Treasurer was there last week, the Foreign Minister has obviously been there – so, we have good lines of communication with the new administration. That’s the administration the American people have chosen, they are a close ally of ours, so obviously that’s important. I think the decisions –

MACDONALD: Do you think the alliance stands as it always has? Because there’s a lot of people saying look, the alliance system’s broken, it’s dead, Trump’s not interested in that, he’ll deal with you on a transaction but anything beyond that, don’t count on it.

GALLAGHER: Well, I think the relationship between Australia and America is stronger than individuals. It always has been. It’s been decades in the making. And there are good reasons why we have been allies for that length of time. I think the Prime Minister’s position has always been that we act in our national interest on everything, it doesn’t change, it doesn’t change with President Biden or President Trump. The arguments that the Australian Government will put forward are, what is in our best, national interest, and that will be the case. To stand up for that because that’s what we were elected to do.

MACDONALD: Obviously, an area that you’re concerned about is interest rates. The Deputy RBA Governor says that the political reality has been turned on its head recently because of decisions Trump’s making in relation to tariffs, we’re looking at a global trade war. The longer-term flow-on effect is higher interest rates, isn’t it? Because this pushes up inflation. We all know the consequences of that.

GALLAGHER: Well, here in Australia, inflation is coming down and we’ve seen that –

MACDONALD: We know that. Just casting ahead, the world is changing at such a rapid pace, don’t we just need to be honest about what some of this stuff means?

GALLAGHER: Well, I think we have been honest. You know, a global trade war is not in Australia’s interest. We’ve been clear about that. We don’t believe tariffs on Australian steel or aluminium is in America’s interest or our interest and so we will continue to argue for that. We don’t want to see an escalating trade war, you know, in terms of that, because it will impact the Australian economy. And we’re seeing some of that play out. But again, our job, our focus has to be advocating on our national interest grounds to the Americans and keep those lines of communication open and that’s what we’re doing.

MACDONALD: 1300 222 702 is the number. An election could be called any time now, Katy Gallagher. The Coalition wants public servants back in the office five days a week. Pretty remarkable story on the front page of the Fin Review today, talking about federal government agencies where a quarter of the workforce never go to the office. Is that acceptable?

GALLAGHER: Well, there’s arrangements in place, and I think if you look across the economy, many workers these days work from home or have hybrid arrangements in place for different reasons. So, it is a feature of modern working life.

MACDONALD: Yeah, but one example is the Tertiary Education Quality and Standards Agency. 27 per cent of employees have never worked from the office. Is that okay?

GALLAGHER: Well, there are arrangements in place and entitlements under the EBA, which have to be approved. They can’t be demanded, unlike what the Opposition is saying, that people can just walk in to never be in the office. It’s not true. So, these are operational decisions that are agreed to at the local level. And it can be for a variety of reasons. For example, it may be that the staff that have the expertise and skills don’t live in the same location as that workplace. I mean, I was in –

MACDONALD: But a quarter of the workforce?

GALLAGHER: I mean, again, it’s difficult to talk about individual arrangements in place, but there are a lot of reasons why. Now, I’ve asked the APSC Commissioner to really have a look at essentially how the nature of work is changing, and it’s not just changing in the public service, it’s changing everywhere. And we need to make sure that it’s working for everybody. Now, he’ll provide me with a report shortly – I don’t know actually, I don’t know when it’s due, but I’ve asked for it and he’s compiling it across government. For example, I was in Cairns. I know everyone wants to portray this as lazy public servants sitting around doing nothing, but if you have a look at the actual evidence, I was in North Queensland the other day in a call centre. Now, the manager was very clear, he would not be able to staff that call centre if people were required to be in the office five days a week. he said, because of the different arrangements in place. So, this is something that works for families, I think. It works for people in cities where there’s long commutes and high costs with travelling. And as an employer, I think we have to make sure that we are able to attract and retain the best talent. I get that there’s cheap politics associated with this, easy, cheap, politics –

MACDONALD: Do you work from home ever?

GALLAGHER: Yeah, I work from home at times. We are very mobile, politicians. I would be very surprised if Mr Dutton doesn’t work from home, I would be very surprised. In fact, I think sometimes you see them on TV when they’re patching in from home on their TV interviews.

MACDONALD: So, should they be forced to work from the office permanently if the rest of the public service is?

GALLAGHER: I think the Opposition’s attack on the public service is a broader thing about work, working people. They’ve been clear about that.

MACDONALD: We do have to keep moving, but very briefly, are you actually writing a Budget or are you sort of playing with the spreadsheet and you’ll do it after the election?

GALLAGHER: No, absolutely, we’ve got a Budget on 25 March, that’s what Jim Chalmers and I have been preparing for. We’ve done months of work, obviously it doesn’t get done in a week, it’s over months. So, all of those decisions are being locked down.

MACDONALD: Katy Gallagher, thanks very much for coming in.

GALLAGHER: Thanks for having me, Hamish.