Senator the Hon Katy Gallagher

DAVID SPEERS, HOST: Well, someone who has been a key player around that Roundtable over the last two and a half days, there's still a few hours to go, is the Finance Minister, Katy Gallagher, who joins us. Thanks so much for joining us during the lunch break of the Roundtable session. Katy Gallagher, tax is the big talking point for this afternoon. We do hear from a lot of the attendees that one of the things that needs to be fixed is this intergenerational inequality in the tax system. Do you at least agree with the principle that we have a problem in the system when it comes to intergenerational inequality?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Well it's certainly something that's been raised through the week, not just in – I haven't sat in the first session on tax – but throughout the week across a range of areas. I think there is an acknowledgement and a responsibility on leaders to look at what's happening, not only right now, but to think about what the consequences of those decisions, or those non-decisions, are on the generations that come after us. I think that's been a real theme throughout the productivity Roundtable.

SPEERS: So, you agree with that theme, that growing consensus, that there is a problem when it comes to intergenerational inequality?

GALLAGHER: Look, I think if across, I'm trying because, you know-

SPEERS: You’re trying to be careful, I know-

GALALGHER: Because I know where you want to go, the tax sessions are underway now, and I don't want to sort of interfere in that.

SPEERS: But you’ve heard these debates from all of them, leading into this Roundtable. People like Ken Henry, Allegra Spender, the ACTU, Aruna Sathanapally, who we're going to talk to shortly as well. They're all saying it, I’m just wondering if you agree?

GALLAGHER: Well, I think you can look at some, you know, pretty clear data that shows that it is getting harder for younger generations in tax, in other areas as well. And I think there is a responsibility on us to make sure that the systems we have, whether it be tax, or the systems we provide, how we provide services, you know, that we deal with those things. That we don't ignore them.

SPEERS: So what do you do then on tax? Because you're clearly not going to solve that in a few hours this afternoon. But is there a case for a tax review, a Treasury review, a whitepaper? Something to follow this moment that's going to address this inequity?

GALLAGHER: Well we've got the, obviously, the tax policies we took to the last election. We will be implementing those. Again, difficult for me, right in the thick of the discussions that are being had now to say what is going to be the outcome of the sessions that will follow this afternoon. The Treasurer will be standing up to talk through that. So I would prefer to wait for that, and I'm not trying to avoid your questions. This is going to be a lively discussion this afternoon. I think people, there's a lot of shared views in the room, and I think there's probably some points of difference as well. But, you know, we're having the Roundtable so that we can have those discussions. Don't limit it by, you know, saying one thing or another in the lead up to it, and try and get the best outcome across the three days.

SPEERS: The point I’m getting to is this isn't the end of the process today, right? Something has to flow from this?

GALLAGHER: Well, there will be outcomes from the Roundtable. And I don't think anyone in the Roundtable has pretended that some of the big challenges we've been talking about, whether it be AI, whether it be budget sustainability, whether it be productivity in general, has a magic switch. In fact, that's been a common theme as well. If there was, we would have switched it and flicked it. And I think in many ways people would have liked that, if there was some solution like that. But it is, it's longer, harder thoughtful work. And so, no doubt there will be things that come out of this that will take longer.

JANE NORMAN, HOST: Minister, I want to ask you about the NDIS in a moment, but just before we get there, and I know that tax is being discussed, but are you seeing that there is a broad consensus and broad support now for an EV road user charge? We're expecting that to be one of the outcomes or a proposal that's gaining momentum at this summit.

GALLAGHER: Well, certainly it's been raised and talked about, and there seem to be – and again, not wanting to pre-empt some of the final outcome discussions – but there seem to be a lot of support and an acknowledgement that as our economy transitions to net zero, as people move from petrol to EV vehicles, that we need a way to ensure that we're funding the infrastructure we need, the road infrastructure we need around the country. And there did seem to be largely agreement on that. I'm not saying it's going to be non-controversial. There'll be discussions about, you know, how you do it, when you do it, the states are actively involved. But people seem to be seeing that, or seem to think, that that is one of the, you know, most obvious areas that we need to move.

NORMAN: Yeah, so that’s coming for EV drivers, effectively?

GALLAGHER: I mean, I think we've been clear. We were talking about it before the election. There's a piece of work underway already. Catherine King's talking to infrastructure ministers. What I'm relaying to you is views around the table, the Roundtable, from those industry representatives, community representatives, union representatives, were all in understanding what the issue is and why we are needing to talk about it and resolve it.

NORMAN: Yeah, to bring you back to the NDIS, Minister Mark Butler made a big announcement yesterday, and the big centrepiece was the $2 billion Thriving Kids program to move children with mild and moderate developmental delays outside of the NDIS. That's a $2 billion Commonwealth commitment. Is it your expectation that the states collectively will match that funding?

GALLAGHER: Well, that is the expectation, so we've made provision for that. And this, you know, I think when you look at how the NDIS has grown and developed – and we all accept that it's an essential piece of national infrastructure, and it's done a lot of good for a lot of people, really changed lives – is that the system that used to exist outside the NDIS, the therapy centres, the early intervention centres, the areas you went when your child was maybe a bit delayed needed a little bit of help, but otherwise got back on track. They don't exist anymore, and it's a problem. And Thriving Kids tries to find that, to reinsert that into our service system so it's not a one-way traffic into the NDIS.

NORMAN: And so, the expectation is that the states do come on board. Who would be running the Thriving Kids program? Are you expecting that to be at a state level or a federal level, like who actually provides these services?

GALLAGHER: Well, I think it'll be a mix. I mean, this will be fleshed out. I mean, Mark's job yesterday, which he did really well, was to sort of say look, this is the problem, this is what we'd like to do. We'd like to build a service system outside the NDIS. We'd like to move it along, because there's been a lot of discussions around foundational supports, as it was talked about, but not a lot of action. So, we're saying that we will be a part of that. We're not just outsourcing that to the states and saying you've got to deliver all of this. We're saying we want to be a player in that. And so, I think it'll be a mix, and it will hopefully be building on existing services. So, we're not recreating a new system, but you could perhaps use, you know, the MBS, or through Medicare, you could provide some additional supports. Whether it be through the child and maternal health nurses that the states run. So I think the, you know, the colouring in has to happen for sure. But I think Mark's point yesterday was we've got an opportunity now, over the next 18 months or so, to build and create this response for these kids that are getting sucked into the NDIS but otherwise don't need to be there.

SPEERS: The states are all, it seems, open to heading down this path. But they were only, they found out about it yesterday, some when they saw Mark Butler stand up at the National Press Club. Why weren't they given a heads up?

GALLAGHER: I mean, I've seen some of that commentary in the last 24 hours. Foundational supports has been on the agenda for a long time now-

SPEERS: This is a change though, what he announced.

GALLAGHER: Well, it's been – the change more is that the Commonwealth is prepared to be involved in that delivery of those supports. Not that we are, you know, that they didn't know we needed to build this system, everyone's known that for quite a while.

SPEERS: I’m just wondering, if it is going to be collaborative, as you say, in running this whole thing, why not have a National Cabinet meeting where you all agree on this and then announce it?

GALLAGHER: Well, I think there was. I mean, there was a National Cabinet. It agreed on trying to restrict growth in the NDIS to 8 per cent. It agreed on a system of foundational supports-

SPEERS: This was two years ago.

GALLAGHER: Yeah, and not a lot has happened. So-

SPEERS: So what I'm saying is, Mark Butler announces this new Thriving Kids approach, and the timeframes around, you know, July next year having it ready and then fully fledged by July 2027. So why not have that agreed to in a meeting?

GALLAGHER: Well, I think there has been a lot of discussions around foundational supports, and around timetables, and around the types of services that we would want. I think what we are saying is we need to get cracking on it.

NORMAN: And you’re saying to the states, they need to start stepping up here. Is there a bit of a push publicly?

GALLAGHER: Well, we have a sense of urgency around this. You know, the states are sort of saying we don't want to be hung out on a limb. We don't want to be left responsible for all of this. Fair enough. Part of Mark's message yesterday was we are joining you at the table, and we think there's real merit about designing a system. But we also need to, you know, acknowledge we have a role in that. We're a big provider of services, particularly for young families, and there must be opportunities for us to better tailor for those kids.

SPEERS: Just coming back to the Roundtable before we let you go. What happened between Jim Chalmers and Ted O'Brien? Were you in the room? Were you there?

GALLAGHER: I was in the room. Look, I think it was, you know, for us we're pretty used to the hustle and bustle and to and fro of politics. It was just an interaction like that, someone who put their political view, and Jim who had to kind of say, look, this probably isn't the right place for this but everything you just said is not correct.

SPEERS: I guess Ted O'Brien's point was around spending, having some rules in the budget around tax and spending, which-

GALLAGHER: Well, it was a number of points that he made.

SPEERS: Right. But on that point, is there a fair point that there should be some clearer rules around tax to GDP ratio and not spending any more than the economy is growing?

GALLAGHER: Well, I think he point the Treasurer made and we, I mean, we have our fiscal strategy, it's published in the Budget. We have our budget process rules. They're very clear, they're available online. So, I don't accept the point that Ted was making was that we don't have any, I just don't accept that at all. And as Jim outlined to the room, on any of the rules that people were talking about, we have exceeded them. And so, we were talking about budget sustainability overall. And also explaining to the room about, you know, some of the trade-offs, some of the pressures that government is under. So when you have a contribution like ‘spending is out of control,’ have a look at the top 20 programs that are that are growing and a big pressure on the budget. All of those are around health, education, aged care, disability, defence. I mean, you know, it's a bit simplistic to run a line that you know just cut spending and all our problems will be solved.

NORMAN: Difficult problems to start reigning in. But just before we let you go, as this three-day summit nears its end, has it been a worthwhile exercise, in your view?

GALLAGHER: Absolutely. I think the goodwill and the collaboration that's been shown, the time that people have given up. I mean, these are senior leaders in their own field that have been prepared to come here and sit for three days and talk about and consider issues that are not necessarily in their lane. That's been the real benefit of bringing that, that kind of, you know, preparedness to come and think about things from other people's perspectives and genuinely use your own skills and talents about making a contribution on that. I think it's been incredibly important.

SPEERS: So what does it achieve then? What will happen?

GALLAGHER: Well, Jim will, I think, at the at the end of the Roundtable this afternoon, he'll kind of pull it all together. So you'll have to wait for that. I mean, I'm not going to move out of my line. But there'll be ongoing work, but I think the relationships and the preparedness to come and talk and listen to each other's perspectives has been incredibly useful for everyone, not just government.

SPEERS: Katy Gallagher, Finance Minister, we'll let you get back into it. Thank you for joining us.