Senator the Hon Katy Gallagher

JAMES GLENDAY, HOST: But first it is time to talk federal politics and get some news. And the Finance Minister, Katy Gallagher, joins us from Canberra. Minister, welcome back to our programme.

KATY GALLAGHER, MINISTER FOR FINANCE: Good morning, James. Thanks for having me on.

GLENDAY: It is our pleasure. Now there are reports this morning that OpenAI and Anthropic are investigating tens of thousands of unauthorised actions by their artificial models. Do you think that big tech companies are in control of their own technology at the moment?

GALLAGHER: Well, that's not really a question I can answer. I can deal with the issues I've been dealing with, with OpenAI, and I know that certainly they have advised us they are doing a review into agent activity across their organisation, and obviously that's had an impact here in Australia. I think it is a reminder to all of us, and certainly here in the government led by the Prime Minister, about trying to get in place some guardrails and some legislation around this technology so that we can be better prepared for situations as they occur.

GLENDAY: Your government is, of course, still reviewing the hack of Medicare data. Are you aware of any other instances yet where artificial intelligence models have hacked or accessed other Australian data that they shouldn't have?

GALLAGHER: So, just on that point, it wasn't Medicare data, it was the statistics. People are confusing this, and I don't want people to worry that it was Medicare data. It was aggregated Medicare statistics on a public-facing website that the agent got into. I'm not aware of anything else at this point in time. Certainly, OpenAI have been sharing information with us. The information they are sharing substantiates their advice to us that this agent got into the Medicare statistics website, and that's it at this point in time.

GLENDAY: I guess people would be wondering this morning, you know, this isn't a very serious hack, these statistics, as you say, the data was forward-facing, but next time there's always the risk it could be worse. What sort of things is the government doing to try to protect data, to protect government information?

GALLAGHER: Yes. So, in relation to this incident, there's been a number of changes. One, that data has been moved onto data.gov.au, which is the open-source website where we have a lot of public data. So, that's one thing. In relation to the email that OpenAI contacted, we've changed that now, so it goes straight to a 24/7 centre which monitors cyber safety across Services Australia. There's a forensic investigation underway. But the question of protecting data, I think, is going to be one that we really need to talk with the Parliament about over the next few months or so. We've got a Data Act which is due to sunset in April next year, and we really need to work out what is the best way of protecting data. How do we make open data available? But then what are the data sets that we are never going to share and we are never going to allow, you know, and have the highest possible protections on. And that is something that we're working on now, but we need to resolve through the Parliament.

GLENDAY: As part of that process of talking with the Parliament about how to protect Australian information, should Sam Altman or representatives of OpenAI be fronting a Senate inquiry into this?

GALLAGHER: Well, who the Senate calls is a matter for the Senate, for Senate committees. So, you know, we've got a joint select committee on artificial intelligence, which is across the House and the Senate. We have asked that that committee have a look at this incident, as it will help shape some of the legislative responses that we have to put in place. So, there is a committee looking at it, but who a committee calls is a matter for the committee. I have to say from our point of view, OpenAI have provided us with all the information that we have asked for, and that is a good thing because, you know, we need to verify what they are telling us. They are sharing their technical data, their logs and that is helping us absolutely provide that assurance to the public that their information is safe.

GLENDAY: On another issue in your portfolio, the RBA is meeting this week. Minister, what's your message to families with mortgages who are seeing the value of their homes dip at the moment, at the same time that they're bracing for their mortgage payments to go up, potentially quite substantially?

GALLAGHER: Yeah, well, we know that people are doing it really tough right now. There's a global inflation challenge we've seen across other advanced economies. Interest rates have gone up in the last month or so. You know, the war in the Middle East could not end soon enough, really, because we're feeling that both in inflation and also at the petrol tank, at the petrol bowser. So, I mean, our focus has been trying to make sure we're giving people lasting and permanent cost-of-living relief through the tax system, through Medicare and investments in bulk billing, and through cheaper medicines as a way of not adding to the inflation challenge, but recognising that, you know, household budgets are under strain, and we want to support them as much as we can at the moment.

GLENDAY: Just on that, you and the Treasurer are going to announce today that the underlying budget deficit is some $6 billion better than expected. The Opposition, some economists, the IMF, among others, have been urging state and federal governments here to restrain spending to try to reduce the need for further interest rate rises. Do you agree with that position at all? If you were to substantially cut spending, would inflation be substantially lower in Australia?

GALLAGHER: Well, we have been showing spending restraint, and the fact that the budget and the final budget outcome comes in with half the deficit that we inherited in 2022, and is lower than what we forecast at budget time, shows how much work we have been doing, whether it's been savings, paying down debt, all of that in the last few years, to make sure that the budget's in as good a shape as possible. You know, we've been very mindful of the role that we play across the economy, but the challenges that we're having now in relation to inflation are not caused by government spending.

GLENDAY: But given how much heat there seems to be in the economy, would it make a difference if you deferred some policies or you decided to cut back spending, at least temporarily, while inflation is so high?

GALLAGHER: Well, we are always looking at ways to find savings, James. I mean, you can see that in every budget we handed down. We did it in the May budget as well. The biggest savings, you know, looking at how we get the NDIS on a sustainable path. So, that has contributed to our budget improvement. But the pressures on the budget are not decreasing. I mean, we've got, you know, aged care, Defence, health, all of those areas where we're seeing more and more pressures coming our way. We have to manage that, and we're doing that. But, you know, dealing with some of these spending pressures and trying to repair the budget over time is a big effort. We've put a lot of effort in, but there's more work to do.

GLENDAY: Katy Gallagher, thanks for your time this morning.

GALLAGHER: Thank you.