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. The following are some of the reactions from economists to the government's latest budget:

This is the most irresponsible budget in recent memory. The government set itself a simple standard: not to make the Reserve Bank's job harder. Michele Bullock may just choke on her cornflakes.

HSBC's chief economist, Paul Bloxham, said that core inflation is likely to be higher in a world with subsidies than one without and, 'There is a growing risk that rates remain higher for even longer.' Chris Richardson said: 'My big ask of the budget was that it didn't poke the inflationary bear. I don't think it passed that test.' Minister, given the reactions of independent economists, aren't the Reserve Bank's inflation assessments far more credible than the Albanese Labor government's?

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

I welcome the question from Senator Birmingham and the opportunity to talk about the fantastic budget that the Albanese Labor government delivered last night. I note in the question there was reference to the energy subsidies that were included in the budget as a way of putting downward pressure on inflation, which I thought I heard in the media reports that you were all supporting. I think that's what I heard, or are you now saying that you don't think that is a way to put downward pressure on inflation and help people with the cost of living?

This budget, which we delivered last night, has a focus on easing some pressure on people around the country. That goes to the cost-of-living relief. It looks at how we can repair the budget over time from the one that we inherited from those opposite. I know it must absolutely kill you to know that we're going to deliver the second surplus—the first government in 16 years to achieve that—that we've got lower debt than we inherited, that we've got lower deficits than we inherited, that we're paying less interest on that debt and that we've managed to find savings, something that seemed to elude those opposite in their budgets.

We've been able to find savings, pay down debt, lower interest rates, have smaller deficits and have two surpluses at the same time. Whilst we're doing all that, we've got an eye on the future: what role should Australia play in the global economic transformation that we're seeing at the moment? What do we hear? We hear that those opposite are going to vote against a Future Made in Australia. Why would you think that was okay? It's against Australian jobs, against Australian industries and against a tax system that works to incentivise production to play a real role in the economic transition to net zero. What a surprise! Those that can't stop saying no say no to even a Future Made in Australia. (Time expired)

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

The budget papers confirm the unprecedented increase in net overseas migration under the Albanese government, with 1.67 million new migrants coming to Australia over five years. At the same time, Labor's budget shows there will be zero growth in housing construction next year, after two years of falls. Will you admit the Albanese government's bad decisions over three budgets have actually added to pressures in the housing market?

Hon. Senators:

Honourable senators interjecting—

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

Order!

Minister, I have not called you. I'm waiting for order across the chamber. Senator Cash, it does include you when I call senators to order. Senator Wong!

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

My apologies, President, I was too quick out of the seat! I might start where I was interrupted. How audacious is it that Senator Birmingham, who was a senior member of the former government, which did nothing in the area of social or affordable housing or working with the states and territories on increasing housing supply, would wander in here and try and absolve them from any responsibility for the fact that we don't have enough houses in this country. The Commonwealth government, when they were in power, removed themselves from any involvement—outside of trying to ransack people's super to pay for housing—to actually deal with the fundamental issues of low affordable housing supply in this country. There is no government other than the Albanese Labor government that has lent in more heavily in this space to increase supply and deal with the housing challenges that exist across the economy.

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

Minister, both you and the Treasurer have tried to claim an emphasis on spending restraint, yet how is this a case when, compared with the last budget update in MYEFO, tax receipts have gone up again in each of the forward years but so have deficits forecast compared with MYEFO? Isn't it clear that you are spending faster than even your record revenue intake is growing?

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

Again, I think the Treasurer and I have been extremely honest about the pressures that are intensifying on the budget in those five key areas: NDIS, defence, health, aged care and paying the interest on the trillion dollars of Liberal debt that we inherited when we came to government. I might say, this budget shows that we are paying $80 billion less in interest costs on that debt because of the work we've put in to lowering the requirements for debt to fund the budget.

The second point I'd make is the fact that, over the past two budgets, continued in this, we are cleaning up the mess of a former government that never budgeted in an honest and complete picture, so we have terminating measures. What about myGov? Do you think myGov is a program that only operates for one or two years? That's how long it was budgeted for; we are now providing that funding. Two-thirds of the net spend in this budget is unavoidable spending, most of which we inherited from those opposite.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Gallagher. In the Treasurer's budget speech last night, it was clear that the No. 1 priority of the government and the budget is helping Australians with the cost of living, while also laying the foundations for future prosperity with the Future Made in Australia. Can the minister update the Senate on how the budget delivers for every Australian?

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

I thank Senator O'Neill for that question and indeed for the focus on the budget on behalf of the constituency she represents in the beautiful state of New South Wales.

The budget that the Treasurer handed down last night does deliver for every Australian—as Senator O'Neill pointed out in her question—from a government that is working for all Australians, with a tax cut for every Australian taxpayer from 1 July 2024 and a further package of cost-of-living relief, including $300 in energy bill relief for every household and a little bit more than that, $325, for eligible small businesses.

The budget will see us invest in more homes in every state and territory across Australia. It'll provide more support for parents; wages growth in every industry—and we saw, again, good WPI numbers released today showing that wages continue to grow under this government—investments in TAFE and universities; and investments in women's equality and safety, and in opportunities for women. It will provide energy and industry policy to invest in a Future Made in Australia and creating jobs across the country. It will provide stronger Medicare and commitments to strengthen the care economy—another area where we saw underinvestment and undervalue placed by the former government. Strengthening our defence capability and in support for small business, this budget has so much in it in terms of the challenges we're dealing with but also with all the opportunities that we see ahead.

It's a very different budget to the budgets that we've seen from coalition governments, including that famous slash-and-burn budget of former prime minister Abbott that the Liberals handed down 10 years ago. We're not here to cut health and education, which we saw under the Liberals. Our plan is about maximising the economic and industrial benefits of the move to net zero, something that opposite don't even believe in, and securing Australia's place in a globally changing economic and strategic— (Time expired)

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

Senator O'Neill, first supplementary?

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much, Minister. I know there isn't enough time in these answers for you to tell us all the amazing things that are in the budget, but it is indeed great to hear that the budget will provide further cost-of-living relief while also laying the foundations for future prosperity. Can the minister provide further detail about how this budget is underpinned by responsible economic management and why this is in the interest of all Australians?

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

I thank Senator O'Neill for giving me the opportunity to talk about our responsible approach to budget and economic management. This budget strikes the right balance between keeping pressure off inflation and delivering cost-of-living relief at the same time, whilst keeping an eye on the future and future growth opportunities and, at the same time, strengthening public finances. The improvements in the budget that have occurred since we took office are a result of our decision-making and our focus on being fiscally responsible.

After delivering the first surplus in 15 years, we're projecting the first back-to-back surplus in nearly two decades. We're expecting a stronger fiscal outcome in every year compared to when we came to government, saving around $80 billion in interest costs over the decade. We've found $77 billion in savings and reprioritisation since coming to government. We're banking 96 per cent of the revenue upgrades this year, keeping pressure off inflation while it's above band, and we're doing this while we're spending on unavoidable— (Time expired)

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

Senator O'Neill, second supplementary?

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much, Minister. With the nation's books in good shape, can you please outline how last night's budget will directly reduce inflation and build on the government's existing policies, which are easing cost-of-living pressures for Australians?

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

This government's budget is an inflation-fighting and future-making budget that strikes the right balance, one that is fit for the times. It is putting downward pressure on inflation, not upward pressure. The targeted cost-of-living measures announced in the budget are expected to reduce inflation, with energy bill relief and Commonwealth rent assistance expected to directly reduce inflation by half a percentage point in 2024-25. This is on top of the government's existing inflation-fighting investments—policies opposed by those opposite. The existing energy bill price relief, the cheaper child care and the boost to Commonwealth rent assistance are expected to take three-quarters of a per cent off inflation in the 2023-24 fiscal year. Treasury is now forecasting that we could see headline inflation return to the target band by the end of 2024, slightly earlier than was expected at MYEFO.

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. In these uncertain economic times, Australians needed a budget that restored their standard of living—that restored prosperity and created opportunity and restored budget discipline and honesty. Instead, Australians got a budget that will leave interest rates higher for longer, costing mortgage holders and renters thousands of dollars. Labor came to government promising that Australians would be better off. They said you would feel a change of government in your pocket. But isn't it true that, after two years and three Labor budgets, real wages have gone backwards by 7.5 per cent and the average Australian household with a mortgage is $35,000 worse off?

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

What the Australian people have got with the election of an Albanese Labor government is a government that's not only directly focused on cost-of-living pressures for them but also dealing with the challenges that were ignored by those opposite for a decade.

So we're dealing with issues like housing. We're dealing with energy policy. We're dealing with the net zero transformation. At the same time we're doing all of that—something that those opposite couldn't even reach agreement on themselves let alone lead a policy discussion on across the country—we're investing in the care economy, we're investing in universities and future skills and we're investing in women—remember that little problem? Remember that problem where women felt completely abandoned by the former government? We're dealing with issues like that.

So, when you talk about all the spending that we shouldn't be doing, is it the investment in women's safety that we shouldn't be doing? The leaving violence payment that you only funded for two years: is it that we shouldn't be funding? Should we not be putting super on PPL? Is that an area that you wouldn't prioritise? We are building in substantial support for people, not only so that it assists them in their pockets—

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

Order! Senator Hume, you've asked the question.

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

but so that it sends a message about the value, in this case, of women and women's economic security and the drive for equality across the economy. So we are doing a lot of things. We're addressing long-term challenges, we're dealing with short-term cost-of-living pressures, and we're laying down the foundations for future growth. That is what the Australian people expect their government to do. It will pay benefits. The wages that we've got moving for the first time, again, in a decade—good results today are showing that wages are moving and we are seeing real wage growth. Again, that is important in terms of the support people get around the household. But we recognise there's more to be done. That's why we changed the tax cuts that you voted for, and that's why we're bringing forward energy bill relief in this budget to everyone as well.

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

Senator Hume, first supplementary?

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

After the budget, independent economist Chris Richardson said:

My big ask of the Budget was that it didn't poke the inflationary bear.

I don't think it passed that test.

The government said it would be careful not to frontload its new costs.

But that's exactly what it did—and its new dollars are both big AND fast.

Why is this government spending an additional $315 billion instead of reining in spending to actually address its home-grown inflation and deliver real cost-of-living relief to ordinary Australians?

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

I just want to take up Senator Hume on her use of a new figure, I think, which is now over $300 billion. On that, Senator Hume, are you no longer going to index the age pension? Is that what you're not going to do? You're not going to index JobSeeker? You're not going to pay veterans the compensation they need—the compensation that veterans need? Is that right?

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

Order! Minister, please resume your seat.

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

Well, that's the number you're using.

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

Minister, please resume your seat.

Opposition senators interjecting—

Order on my left! Senator Hume, you've asked your question. It's now—

Senator Hume, don't speak back to me. You're not in a debate with me. I am trying to establish order in the Senate and I am asking you to refrain from disorderly interjections. Minister, please continue.

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

All I can take from the question I was asked that raises the figure that Senator Hume used is that the opposition have now decided that indexing the age pension or providing support to veterans is wasteful spending. That is the argument they are putting. In addition to that, I can list a range of services that were not funded properly, underinvested in or not funded at all in an ongoing way, including palliative care services and chronic healthcare services, and we are fixing all of that up in this budget. (Time expired)

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

Senator Hume, first supplementary?

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

Australians needed a budget that restored discipline and spending restraint. It needed a government that restored the fiscal guardrails, but instead this government refuses to show economic leadership and take the hard decisions to reduce spending and get inflation under control. Minister, can you confirm that for every dollar of savings you have spent four?

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. I can confirm that every dollar of savings—$77 billion since we came to government—is $77 billion more than the opposition ever saved. Certainly their last budget had zero savings. So it's $77 billion more than you ever put forward.

In terms of fiscal responsibility, we have shown spending restraint. Real spending growth is in the order of 1.4 per cent, which is half of what it was under the former government. We've got gross debt hundreds of billions of dollars below what was forecast when we came to government. We're paying less on our interest bill because of that. We have reduced the deficits that we inherited and we have delivered and are on track to deliver two surpluses. If it's all so easy, why wasn't it possible for those opposite to ever do that—why wasn't it—when we saw deficits and debt increasing even before the pandemic hit?

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

Senator Hume, second supplementary? I beg your pardon; I nearly gave you a free one! I'm trying to help! Senator Hodgins-May.

Steph Hodgins-May (Victoria, Australian Greens) Share this | Link to this | Hansard source

This is not my first speech. My question is to the Minister representing the Prime Minister. This weekend I'll be doorknocking in my home area of St Kilda and I will hear from community members about the Albanese government's decision to prioritise budget surplus over helping them. I'll hear about your decision to have the budget pump almost $50 billion into subsidising fossil fuels over the next 10 years when we are veering towards environmental and climate collapse because you prioritise your corporate mates over the people who voted you in. Minister, what should I tell my community when they ask me about this government's betrayal of those doing it tough and selling our kids' futures to big coal and gas companies?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I thank the senator and congratulate her on her first question and to her swearing in in this place. If I may hasten to add, I suspect that you are doorknocking but I suspect that you are also putting a view in that doorknocking, which was expressed in the question. What I would say to them is this is the only party that is offering energy price relief. This is the only party which is offering rent assistance—on the back of the biggest increase in many years, another increase. This is the only party that is actually offering a transition to the clean energy future that will be implemented, because—with respect, Senator—your party thinks you can do it by press release and slogans. The hard job of transitioning what has been a fossil fuel dependent economy to a renewable energy economy is one we understand.

This budget invests in a future made in Australia. Do you know what that is about? It is about grasping the opportunities of net zero. It is about recognising that if we want to ensure jobs for our kids and also to deal with the crisis that we see in climate then we have to transition our economy. That means governments have to do what we are doing in this budget, which is giving the signal to the markets and investing to ensure that we drive investment into green hydrogen, into renewable energy, into those industries which are necessary for the clean energy economy. You can tell them this is a government focused on equity now, fairness now for Australians, but also a future which has more opportunity and which grasps the opportunities of a clean energy economy.

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

Senator Hodgkins-May, first supplementary?

Steph Hodgins-May (Victoria, Australian Greens) Share this | Link to this | Hansard source

Members of my community saw the Albanese government release its Future Gas Strategy and its push to sell coal and gas beyond 2050. They then witnessed the highly coordinated display of faux outrage from government MPs in marginal seats right across the country. These same MPs didn't even bother to turn up to the other chamber yesterday to vote on this issue. What is your message to my community about why they failed to vote to oppose expanding coal and gas beyond 2050 and locking us into climate and biodiversity crises?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I previously suggested the Greens might be involved in a bit of electoral politics when it comes to some of these policies. I think that was demonstrated by that question, where you asked about specific members of parliament exercising their vote or not. With all due respect, Senator, I don't actually watch all the proceedings in the House of Representatives. I've got a few other things that I try to be working on, so I will take as read what you have put to me. But can I make some general comments about gas. I find it disappointing—

David Shoebridge (NSW, Australian Greens) Share this | Link to this | Hansard source

You love gas!

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I will take the interjection from the senator. What is problematic about this discussion is that it becomes a discussion about emotion and identity and politics and not about facts. That is what happens. The fact that I have just been told 'You love it' is a demonstration of that. It's not about what you love or don't love; it's about what is the best way to make a transition.

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

Senator Hodgins-May, second supplementary.

Steph Hodgins-May (Victoria, Australian Greens) Share this | Link to this | Hansard source

When defending the Future Gas Strategy, the Prime Minister said not a cent would be spent on gas companies. So why does the budget include $33 million for Santos's sea dumping infrastructure on top of the $1.5 billion for the Middle Arm gas and petrochemical hub in Darwin? Is the Prime Minister mistaken about the fossil fuel subsidies in the budget?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Again, I think there are some factual issues with the question. I'll take, for example, Middle Arm. I know there's been a campaign against Middle Arm from the Greens political party. The Australian government's investment in Middle Arm's Sustainable Development Precinct is an investment to support industries critical to meeting our commitment to net zero, including green hydrogen, the manufacture and export of lithium batteries, and renewable energy. The government's investment in Middle Arm is not an investment in gas or an investment in fracking. Those who continue to peddle this conspiracy are failing to engage in the detail of the proposition on Middle Arm that the Australian government has put to the Northern Territory government.

We have a view that we want to transition what has been a very fossil-fuel dependent economy to an economy that is a renewable energy superpower, and we know there is work required to do so. (Time expired)

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Minister Wong. Given that helping Australians with the cost of living is our government's No. 1 priority, can the minister please inform the Senate how the Albanese Labor government's budget delivers for all Australians, and can the minister please provide some details on one of my favourite measures, which is the tax cut for every taxpayer, and any other key measures within that? As well, could you please touch on the energy bill relief for every household, less student debt and an increase to rent assistance for nearly a million households?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Thank you to Senator Grogan, from the fantastic state of South Australia. Thank you for having such a close interest in the budget measures. As the Treasurer and Minister for Finance and Prime Minister have made clear, our first priority in this budget was to deal with cost-of-living pressures and to do so in a way that didn't add to inflation, at the same time as charting a course for the future.

In relation to the cost of living, we understand the extent to which Australians are doing it tough, it is so important for the government to do all we can in a responsible way to assist with the cost of living. It's the big challenge, not just here but in every household in Australia. How is our budget helping? The first way is through tax cuts—tax cuts, for every Australian, that are geared far more to those on middle incomes and lower incomes and far less to high-income Australians than was proposed by those opposite. These are tax cuts which deliver to 13.6 million taxpayers across the country. Then, of course, there is electricity bill relief for every household. We understand that energy prices mean that people are doing it tough, and a centrepiece of this budget is a $300 rebate for every Australian household. Of Australia's 13.6 million taxpayers, everyone will get a tax cat. The average tax cut will be $1,888. On top of that, as I said, there will be a $300 electricity bill rebate for households, and $325 for eligible small businesses. This extends and expands the energy bill relief rolled out last year. On top of that is a 10 per cent increase to Commonwealth rent assistance. (Time expired)

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

Senator Grogan, your first supplementary?

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Minister, that was a great response. In my home state of South Australia, many of the people I speak to want affordable housing, and I'm sure that's the case across the country. Can the minister please tell the Senate what the Albanese Labor government budget will do for people who want to buy a home and for people who are renting, and, more broadly, what the government is doing to deliver more homes for more homebuyers and renters?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Thank you, Senator Grogan. I know, from not only your priorities in the parliament but also your work outside of the parliament before you were sworn into this place, that you understand deeply the importance of housing supply and of social and affordable housing. Unfortunately, as Senator Gallagher said, we have had 10 years of neglect from the other side. Actually, it was more than neglect; it was an active decision not to take any responsibility for housing supply. Now they come in here and have a go and say, 'Where's the housing supply?' as if the last 10 years of vacating this policy area can be hidden.

The budget includes $6.2 billion in new investment to build more homes quickly, bringing the government's new housing initiatives to $32 billion. That's $32 billion for more social and affordable housing, for more infrastructure, for the removal of red tape, for better transport and for increased student housing. (Time expired)

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

Senator Grogan, second supplementary?

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

Could the minister please explain how the spending in this budget is responsible and carefully calibrated so that it can deliver responsible cost-of-living relief and ease pressures now without adding to inflation?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

The government's budget balances relief, restraint and renewal and is delivering a cost-of-living package that is both substantial and responsible but which is in the context of a forecast second surplus and inflation returning to the band during the calendar year under the Treasury's estimates. I would make this point. We've heard a lot from those opposite in this question time and in response to the budget about why we need more spending restraint and why too much is being spent. Tomorrow night is Mr Dutton's third budget reply. So far it has been all negativity and no plans. That dance is going to have to come to an end. That is going to have to come to an end. At some point you're going to have to front up and tell people what you're going cut. Are you going to do it tomorrow night? (Time expired)