Fatima Payman (WA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and the Minister representing the Treasurer, Senator Gallagher. Can the minister update the Senate on the state of the budget and some of the challenges facing the budget?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank Senator Payman for her question and her interest in all matters relating to the Australian federal budget. When parliament returns after this sitting week it will be to hand down the October budget, and the Treasurer and I announced last week that we will release the final budget outcome for the 2021-22 financial year this Wednesday.

I think we've been very upfront about the serious challenges facing the economy and the substantial pressures hitting the budget. One of the biggest pressures, of course, is the management of the trillion dollars of debt that was left to us by the former government. With higher interest rates, that debt will now cost the budget more to service, with billions and billions of dollars that we will need to find in the coming years that has not been provisioned for. That, of course, is on top of the funding that was promised by the previous government for the last financial year that did not get out the door to benefit Australians, much of which will pass over to the next financial year. Whether it's COVID support, delayed infrastructure projects or support for flood victims, there's at least $6 billion in there that those opposite promised to spend in the last financial year but didn't, and we will now have to pay for these as they flow over through the October budget.

The Treasurer and I have been very clear that the former government did not make provision for a lot of the costs that are going to have to be managed by this government. This is a government of grown-ups. This is a government that actually does its work, that is methodical in its analysis, that weighs up the evidence for policy decisions, that makes those often difficult decisions when we go through the budget process. That is our commitment to the Australian people. That's why they elected us; they wanted someone to manage the budget responsibly, to be fiscally responsible and to make room for all those areas Australians value in terms of their services and access to support.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Payman, first supplementary?

Fatima Payman (WA, Australian Labor Party) Share this | Link to this | Hansard source

Can the minister explain how the Albanese government will help Australians deal with cost-of-living pressures in the upcoming October budget?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I can. Thank you, Senator Payman. We know Australians are doing it really tough, which is why our first priority is delivering responsible cost-of-living relief—responsible because it needs to take some of the pressure off people but also grow the capacity of the economy and not make the Reserve Bank's job harder. A great example of this is our childcare policy, which every member on the side is so proud of, with the legislation being introduced into the house this week. This will be a game changer for family budgets, for our workforce and for the productive capacity of our economy.

We know what we stand for on this side: rock-solid support for game-changing, economy-building cheaper child care. It's a no-brainer. Surely anyone who is serious about helping the cost of living would support cheaper child care, and, surely, if you spend every day lecturing the government about the cost of living you would support that policy as well.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Payman, second supplementary?

Fatima Payman (WA, Australian Labor Party) Share this | Link to this | Hansard source

What steps is the Albanese Labor government taking now that it is in charge of the budget to properly manage some of these major challenges while still delivering on its promise?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank Senator Payman for the supplementary. We have been responsibly assessing, line by line through the budget process, where Australian taxpayers' money is going. We want to ensure the budget is managed properly and that we are able to meet our commitments and manage some of those incoming budget pressures.

Apart from implementing our election commitments, which are obviously important in terms of our economic plan for Australia—things like cheaper child care, cheaper medicines and fixing the aged-care crisis—we've also had to deal with issues left behind by the previous government. This includes around $5½ billion in unavoidable spending. Around $3½ billion of this was extending COVID relief payments in line with isolation requirements, vaccine eligibility, support for aged-care facilities and replenishing medical stockpiles—all unfunded by the previous government—and around $2 billion was in relation to disaster recovery—all necessary funding not provided for. (Time expired)