Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

My question is to the minister representing the Treasurer, Senator Gallagher. With energy bills up $500, even taking into account Labor's limited temporary payments, and the average family $25,000 worse off under this budget, hasn't Labor let Australia down by failing to deliver a budget that gets the cost of living down for all Australians?

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

I thank Senator Hume for the question and for the opportunity to talk about what a strong, responsible budget we have handed down. In answer to the figures that Senator Hume has read out, I don't trust those figures because I've just worked through this budget and all the dodgy budgeting that went into their years in government—the hidden funding cliffs, the underresourcing, the failing to account. A significant part of the investments we are making in this budget is to deal with funding that just terminated and was never accounted for in their budget.

Hon. Senators:

Honourable senators interjecting—

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

Senator Gallagher, please resume your seat. Senator Henderson?

Sarah Henderson (Victoria, Liberal Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Interjections are disorderly. Senator Watt was interjecting from the moment the question was asked. I would ask if you could bring him into order.

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

Thank you, Senator Henderson. I'm very glad that you noted that interjections are disorderly because there were interjections across the chamber. I remind all senators that interjections are disorderly, as Senator Henderson has reminded everyone. When questions are asked and ministers are on their feet, I expect all senators in this place to respect the silence that's required.

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

This budget takes pressure off families while not adding to pressure on inflation. We have done our job in finely and carefully calibrating this budget so that we don't add to inflation but so we are able to provide sensible cost-of-living relief for those that need support the most, while at the same time making historic investments in bulk-billing in Medicare, tripling the Medicare bulk-billing incentive to make it easier for parents of children, for concession card holders and for pensioners to ensure that when they need to see a doctor they get that consultation bulk-billed. That's what you get under an Labor government: not dodgy budgeting and failing to account but fiscal discipline, investments where they need to be made, cleaning up the mess of nine years of your administration and putting the budget on a more sustainable, more resilient footing so that we can make room for the things that we know Australians depend on and expect from their government. That is the approach we took in this budget. I am very proud of this budget—very proud indeed—because we have had to balance a range of competing pressures to land a document that is right for the current economic challenges and circumstances we face. (Time expired)

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

Senator Hume, a first supplementary question?

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

Why has the government removed the objective to tackle inflation from the federal budget papers?

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

Did you get past the glossy, Senator Hume?

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

No.

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

Right. It's run throughout all of the budget papers. It was in the Treasurer's speech to the parliament when the budget was introduced last night. It is filtered through every single document.

Honourable senators interjecting—

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

Minister Gallagher, please resume your seat. I'm asking for order across the chamber once again. Order on my left and my right!

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

The Treasurer and I have been talking about the inflation challenge since we came to government. The largest increase in inflation happened in the March quarter of last year under your administration when you poured $8.6 billion into the economy in six months. That wasn't inflationary then, according to you. We have a very carefully calibrated budget that looks to repair the budget over time, put it on a more sustainable footing, make the investments we need and ensure that we can support those people who are doing it really tough across the country.

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

Senator Hume, a second supplementary?

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

After three quarters of inflation with a seven in front of it, why did the government deliver a budget with $185 billion in increased spending that will add to inflationary pressures and—as Chris Richardson, S&P, Goldman Sachs and UBS have all said—force the RBA to raise interest rates?

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

Well, I don't accept the number that Senator Hume has used in her question, for a start. I don't know where it came from and I don't know who on the opposition's benches got the calculator operating to come up with that figure. But I would say that we've taken our advice from the Treasury. You see the inflation forecasts in the budget papers, if you get to that point, in Budget Paper 1. You can see what the Treasury, who advises us, is saying about this budget and its impact on inflation—six per cent in the 2022-23 year, declining to 3.25 per cent next year and declining back into the target range in the year after that. Let's go with what the budget books say, hey?

In terms of economists, yes, you will get a range of views from economists. I just sat next to one at a lunch, and they said their view is that the budget is neutral. In fact, that's what a lot of the major banks are saying—that at worst case it's neutral. There will be opinions, but we are very confident with what we are doing. (Time expired)

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

My question is to the Minister for Finance, Senator Gallagher. Can the minister update the Senate on the budget that the Treasurer delivered last night and how it delivers for all Australians?

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

I thank Senator Payman for that question. I appreciate it. The budget the Treasurer delivered last night does many things. It responds to the immediate challenges and sets Australia up for the future as well as forecasting a surplus and providing relief for the most vulnerable. Helping the vulnerable and delivering a forecasted surplus aren't really experiences familiar to the coalition, are they? They never managed it during their nine whole years in government. They got the mugs printed, but they didn't actually deliver it. We remember all the photos. It was nine years of financial mismanagement, nine years of bad budgeting, gaps in the budget, fiscal cliffs and booby traps that have taken us two budgets to uncover. We've inherited it all, and we've dug the budget out of that hole in order to deliver a forecasted surplus. We've cleaned up the mess left behind. We've managed to deliver for Australians, particularly those who need it the most and those who had been left behind under the former government.

The budget builds stronger foundations for a better future by delivering cost-of-living relief that doesn't drive up inflation: a historic $5.7 billion investment to strengthen Medicare and investing in a strong and more secure economy through significant investments in renewable energy, in skills, and in modernising and growing Australia's industrial capabilities and of course broadening opportunity, including advancing women's economic opportunity. We don't see women as an add-on, as something you look at once you've finalised the budget. Women have been front and centre of our decision-making, and we are absolutely determined to ensure that we seize the economic opportunities that come from a country that treats women equally.

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

Senator Payman, a first supplementary?

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

Can the minister outline how the government's responsible economic management allows it to make significant investments in Medicare to benefit all Australians?

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

I can, Senator Payman. Thank you very much for the question. I think a very key part of this budget is how much, with the upgrades to revenue, we have put back to budget repair: 87 per cent over the last two budgets in revenue upgrades to the budget, compared with about 40 per cent under the previous administration. This shows how serious we are around fiscal repair, ensuring that we avoid borrowing hundreds of billions of dollars in debt and paying the interest on that debt. To do so, we have ensured that we are putting the budget on a more sustainable footing, which allows us to make critical investments in things like Medicare—things that people value; tripling the bulk-billing incentive—putting a range of measures in place to ensure people can have their healthcare needs looked after, including those with chronic disease. In terms of the bulk-billing incentive, 11.6 million Australians will benefit from that measure alone.

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

Senator Payman, a second supplementary?

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

Thank God the adults are back in charge. Can the minister provide further information on how the government is delivering cost-of-living relief through its $14.6 billion in responsible and targeted cost-of-living relief?

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

The cost-of-living package is a key part of the budget. We've been clear, as we've been dealing with the inflation challenge, accepting that we needed to provide targeted and calibrated cost-of-living relief across the forward estimates, that we have targeted that carefully.

The $14.6 billion cost-of-living package over four years allows us to make those investments into energy bill relief for five million households and one million small businesses—which, I will remind people, those opposite voted against in December, when we recalled the parliament; more affordable health care; cheaper medicines; support for those who need it most, including extending parenting payment single for single parents who have children between the ages of eight and 14; $4.9 billion to increase the rate of eligible working-age and student payments, which will benefit 1.1 million Australians; and the largest increase to Commonwealth rent assistance in 30 years. (Time expired)

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Is it the government's assessment that Labor's budget makes future interest rate increases more likely or less likely? Is fiscal policy working complementally to monetary policy?

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

We have been very clear in the lead-up to the budget and in the decisions taken, which are outlined in the budget paper, that we see dealing with the inflation challenge in the economy as a priority. As to decisions the Reserve Bank may make, we don't foreshadow those. We leave that for the independent bank to make those decisions. We never try and get ahead and say what we think it should do, what its decisions will be. It is independent of government for important reasons, and I think that was something the opposition has previously accepted. In terms of the inflation forecast—

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

Surely you've done an assessment?

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

I'm trying to answer your question, Senator Birmingham, if you would stop peppering me. You can see the inflation forecasts in the budget. The forecasts are outlined in the budget. You can see, when it comes to energy bill relief—the package you voted against, the caps that you voted against and the relief that you voted against—that it actually has a downward pressure on inflation of three-quarters of a per cent. And the other measures that we are taking, carefully calibrated over four years, do not have a negative impact on inflation. That is the advice the government has and that is represented in the budget papers.

It might be an uncomfortable truth for those opposite to actually find a government that wants to do a number of things in the budget, that actually wants to show a bit of compassion, deal with some of the pressures that people are feeling and be responsible about how we manage the budget. I think that is probably a foreign concept to you. I can see how it is challenging you. But we are able, with the approach we have taken to this budget of returning money back to budget—cleaning up the mess, making investments—to make sure that the measures are carefully targeted not to add to inflation.

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

Senator Hume, your constant interjections are disorderly, and I would ask you to stop. Senator Birmingham, a first supplementary?

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

Minister, contrary to your claims, the Financial Review has reported that 'extra spending is not offset by meaningful cuts to neutralise the fiscal pulse'. Economist Chris Richardson said of the budget, 'I had thought that the Reserve Bank was done and dusted but this has notably raised the chance that they will do another swing of the baseball bat.' Given that the minister is unable to say that future interest rate increases are less likely as a result of Labor's budget, aren't you acknowledging that the Albanese government's fiscal policy settings do not put downward pressure on interest rates?

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

enator GALLAGHER (—) (): It is amusing to me that Senator Birmingham is able to ask that question with a straight face, to be honest, after the work that I have done having to clean up the mess of the previous administration, including finding $40 billion in savings in two budgets. And what happened in your last budget?

Opposition Senators:

Opposition senators interjecting—

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

Order! Order! Order on my left!

Senator Payne, I just called the chamber to order.

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

Forty billion dollars in savings that we have identified in just two budgets in less than a year, when in the March budget—zero.

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

Minister, please resume your seat. Senator Hume?

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

A point of order—the minister is misleading the Senate. Offsets and saves are very different things. Are they saves or are they offsets?

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

Senator Hume, that is a debating point.

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

Forty billion dollars in savings—zero in the March budget. You poured cash in in a pre-election cash splash, and there were zero savings. Part of the spending that we are doing in this financial year is to keep the lights on at the agencies and services that you were going to flick off. That's $11½ billion that we've had to make room for, find—unexpected, didn't know it was going to happen—in order to keep services going. That's the legacy of your government. (Time expired)

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

Senator Birmingham, a second supplementary?

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

I refer the minister to the remarks of BetaShares Chief Economist, who said the spending in this budget is 'unambiguously expansionary and risks one, if not two, additional interest rate increases,' or Goldman Sachs, who say the budget has created a 'hawkish' outlook for monetary policy risking more interest rate rises, or UBS, who say the budget shows an increasing risk of further rate hikes. Are all of these experts wrong about the Albanese government's budget when they say it will put more pressure on the Reserve Bank to keep interest rates higher for longer?

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

I thank you very much. As I've said in previous answers, the decisions we took in this budget were to ensure that for the spending where we had to spend and where we needed to spend, including in targeted, calibrated cost-of-living relief for vulnerable households in this country, we did it in a way that didn't add to inflation. That is the advice from Treasury. That is what you will see if you make it past the glossy in the budget papers, and I suggest you read it. No doubt we will go through this in estimates.

Well, I have had a number of discussions. I presume you selectively quote, Senator Birmingham, with due respect. I have had a number of conversations, and, indeed, there are a number of opinions across the economic field, across economists. What a surprise that is! In the ones that I've just had this morning, their view is, in the worst scenario: neutral. That is the assessment of some. You choose to selectively quote others. So be it. We're in a contest here. I understand that. (Time expired)

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

My question is for the Minister representing the Treasurer, Senator Gallagher. Minister, last night's budget left people in poverty. People who are struggling to survive on Centrelink poverty payments have criticised the budget for leaving them in dire straits, and they've been backed in by organisations like ACOSS, the Antipoverty Centre, the Tomorrow Movement and the National Union of Students. The Business Council of Australia said this morning that we have to lift JobSeeker to 90 per cent of the age pension over time. Your handpicked Economic Inclusion Advisory Committee recommended an increase in JobSeeker and other payments of more than six times than what the government delivered last night. When will you listen to this advice and raise the rate of JobSeeker and other income support payments to above the poverty line?

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

I thank Senator Rice for the question. It's an important question, but I would also say: welcome to the Senate. We have questions here saying we're 'doing too much' and we're 'fuelling inflation', and we have questions here which are saying we're 'not doing enough' and we 'should triple or, indeed, progress it more than that'. I think that makes the point the Treasurer and I have been trying to make for some time, which is that this budget is balancing up a range of decisions based on the economic circumstances of the time. We have high inflation. Our spending has to be calibrated, it has to be careful and it has to be targeted.

So when you look at the work that we've done in just this budget—or even if you attach it to the October budget to look at what we've been doing—you'll see that we are making gradual progress towards addressing some of the needs that have been left to us by the failure of those opposite to deliver and towards doing some of the work that we know needs to be done because we're Labor people. You'll see that in this budget. You'll see it in the childcare investments. You'll see it in the cheaper medicines. You'll see it in Medicare. You'll see it in the investment in skills. You'll see it on the growth side of the budget and you'll see it on the compassion side of the budget in relation to social security and payments. There is a significant uptick for single parenting payment. There is an increase to the base rate of JobSeeker. There is the most significant increase to Commonwealth rent assistance ever seen. All of this is working together to make sure that, for those who need an extra helping hand, we are giving them an extra helping hand.

These have been difficult decisions to land. Some say it's too much. Others say it's not enough. But I think you can see the genuineness with the approach that the Albanese government has taken when we said we would assess payments and do what we can to adjust them. In every budget we've been doing that work. (Time expired)

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

Senator Rice, first supplementary?

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

Minister, as for your compassion, last night's budget gave people living below the poverty line an increase of just $2.85 a day, which won't even cover the cost of a loaf of bread, but it gave billionaires and politicians almost 10 times as much, with the stage 3 tax cuts giving every one of us here $25 a day, or $9,000 a year. Why do we politicians need $9,000 a year in tax cuts while jobseekers are left on poverty payments?

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

ALLAGHER (—) (): I would again say to Senator Rice that the cost-of-living package is targeted and was carefully calibrated so as to be affordable and sustainable going forward and not to add to inflation. It should also be seen in the context of a range of other measures—the energy bill relief, for example, and the efforts that we're putting in for cheaper medicines, urgent care centres and bulk-billing rates so that people on payments can actually access bulk-billed health care. We know that that's a problem. So I don't think you should see one payment in isolation from all of the other work that's being done in this budget. On top of that, we've found $4 billion for the community sector indexation, providing services to people, many of whom are on payments—$4 billion. Do you think that mob would have ever done that? These are the difficult decisions we've taken. It's carefully calibrated, and it's the right thing to do. (Time expired)

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

Senator Rice, second supplementary?

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

Last night's budget sets out a $4 billion surplus. You can't eat a surplus. Why have a surplus when you've still got too many Australians living in tents and cars, trying to survive on one meal a day and not able to afford critical medications?

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

Being in government means you have to do a range of things. One of them is repairing the budget. We have to repair the budget so that we can ensure that, as needs grow—and we know they are growing—and as pressures on the budget increase, we have room to meet those pressures, be it in climate policy, social services, investments in women or investments in housing. All of those pressures are going to have to be met, so we have to get the budget on a better footing. We have also avoided borrowing hundreds of billions of dollars to pay for our services, avoiding interest payments on that debt, which again makes a difference in finding and creating room for those people that we want to invest in and for those programs we want to invest in.

In the next financial year, when the payments come in, there is a deficit. The budget is in deficit in four of the forward estimates years. So budget repair remains a challenge. Finding room to do good things for good people is also a priority. (Time expired)

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Social Services, Senator Farrell. Minister, we know that Labor created the welfare system and has been a champion of strengthening Australia's social security safety net. Can the minister outline how the Albanese Labor government is continuing to strengthen the safety net through measures in the budget to support Australians doing it tough?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I thank Senator Smith for her question and the great job she's doing for the people of South Australia. And I can answer her question. This government—but particularly terrific Minister Rishworth—understands that many Australians are doing it tough. We know that households are feeling the pinch as a result of cost-of-living pressures. That's why we sent through this budget to address these pressures, providing responsible, targeted relief as the No. 1 priority in our budget.

As the Treasurer announced last night, our $14.6 cost-of-living plan includes help with bills, record investment in Medicare bulk-billing and cheaper medicines. We're also increasing working age, student payment rates and Commonwealth rent assistance. These increases are responsible and targeted to help vulnerable people and strengthen the social safety net. Rates of JobSeeker, youth allowance, partnered parenting payments, Austudy, Abstudy, the youth disability support pension and special benefits will rise by $40 a fortnight. This will benefit around 1.1 million Australians.

We're also expanding eligibility for the existing higher rate of JobSeeker to single recipients aged 55 and over who have been on income support for nine or more continuous months, which currently applies from age 60. We will provide additional support for renters, with the largest increase in Commonwealth rent assistance in more than 30 years—yes, 30 years. The budget will increase the maximum rates of this payment by 15 per cent. Combined, these changes provide additional support to around two million people. They provide responsible, balanced support to those who need it most. (Time expired)

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

Senator Smith, a first supplementary?

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

RIELLE SMITH () (): Thank you, Minister, and please feel free to call me Marielle. Minister, we know that single parents in our community are doing it really tough. They're doing one of the most challenging but rewarding jobs all on their own, raising their children. How is the Albanese Labor government showing our support for single parents and older Australians by strengthening Australia's social security safety net?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I can answer that question because single parents are the family type most likely to experience financial hardship. It can be tough for these parents, who are overwhelmingly women, to balance caring responsibilities and full-time work, study or looking for work. This doesn't end when the child turns eight.

With the government's changes announced in the budget, which expand eligibility for single parenting payments to parents with the youngest child under 14, more than 57,000 single parents will be better off by at least $176.90 per fortnight. Similarly, we know that older Australians face barriers when looking for work. Our changes expand access to existing higher rates of JobSeeker for those on payments for nine months or more or those over 55. This acknowledges their circumstances and provides greater financial support while they look for work.

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

Senator Smith, a second supplementary?

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

IELLE SMITH () (): Minister, how will young people benefit through the strengthening of Australia's social security safety net?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I know this is a group of people you have a very deep interest in. Our government understands the unique challenge that young Australians are facing, and we want to ensure that young people are set up to succeed. Students and young people will benefit from Labor's changes to payment rates, with 318,000 young people on income support, including those on youth allowance, receiving an additional $40 per fortnight. Many students and young people will also benefit from the government's increases to Commonwealth rent assistance. For those who already receive the maximum amount, their payment will increase by 15 per cent. This is the vast majority of students and young people who receive rent assistance. For example, a 20-year-old student on youth allowance who rents with flatmates and receives the maximum rate can receive more than an additional $55 per fortnight.