She's On The Money - We Asked the Finance Minister What This Budget Really Does For You

Starting point is 00:00:00 Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money. She's on the money.

Starting point is 00:00:36 Hello and welcome to She's On The Money, the podcast that translates government budgets into information that you are actually going to be able to understand. If you felt like you need a politics degree just to understand if the budget this year is good or bad, or you're sitting there like, wait, what is a structural deficit and why should I even care? Or maybe you're just wondering, cool, but does any of this actually help me or benefit me? My friend, you are in exactly the right place. I'm Victoria Devine, the one that's here to ask the real questions, cut through the spin and make this budget make sense for real life. And today, which is actually the day after the big budget announcement, I'm doing a very special

Starting point is 00:01:40 recording from Parliament House in Canberra, but I'm not doing it alone, which would be a little bit sad. I am joined by someone who helped shape this year's federal budget from the inside. Senator Katie Gallagher is the Minister for Finance and the Minister for Women, and she's here to chat with us about what made it into the budget, what didn't make it, and what it actually means to you. Katie, welcome to She's on the Money. Thank you so much for having me on. It's very exciting. It is, honestly, for me, career highlight. Guys, I'm in parliament. Baby Victoria would be shaking in her boots right now. First of all, I'm just going to start this off assuming that a

Starting point is 00:02:22 lot of my community haven't dipped their toes in the political waters yet. And I have seen questions in my community of, Victoria, what's the difference between the Minister of Finance and the treasurer. How does that relationship work and what are the different roles? Okay, so that's a great question. Really, Jim and I, so Jim Chalmers is the treasurer, I'm the finance minister. We work very closely together on all matters relating to the budget, but really on all matters relating to economic policy as well. But if I could sort of simplify it down, I think really Jim is the lead economic minister. So he's in charge of economic policy across the country, revenue, all those, you know, big kind of nationally important things. And I'm

Starting point is 00:03:08 responsible for the money. Like where's the money coming from? Where are the savings? More of like the accounting bookkeeper part of the business. So I get- You're in the nitty gritty. I am. I'm in the nosy part. Yeah. You're in the one, I want that role. I don't want to be treasurer. I want to be nosy. I know. Well, the treasurer has a lot of responsibilities. He's busy, but you can be nosy and give him the highlights. I can. And I have my fingers really in every single thing that happens across government. So

Starting point is 00:03:39 I know what's happening in other ministers' portfolios. I know what policy is being developed up. Yeah. It's a very interesting role, but I'm kind of, yeah, it really suits my personality, which is naturally nosy. Okay. Me too. Me too. Like I don't want to be part of the drama or the gossip, but I actually would really like to know what's going on. Just keep me in the loop. Like if you give me a budget or a spreadsheet, I will do a little bit of a nosy into what that means and how that works. You are also, in addition to being the Minister for Finance, you are the Minister for Women, which I think is so special and so cool, but let's wrap it back to the budget. Was this a good budget for women? Yeah, I think so. You know, we've worked

Starting point is 00:04:23 hard on it. There's some really good and important big announcements for women, but it shouldn't be seen in isolation of the other three budgets we've done where we've tried to shift the dial for women as well. I think, you know, like for the last decade, really, I feel like women's policy had really been a bit more of an afterthought. It wasn't kind of central at the table, kind of front of mind. And, you know, putting me as finance minister and minister for women means the minister for women is at every kind of decision of the budget. And that helps. Plus helps having a PM who wanted me in that role because he wanted women's policy right at the front and center of government. And it helps enormously to have a treasurer who doesn't need

Starting point is 00:05:03 convincing that women's economic equality, you know, getting a fair deal for women is actually a national economic priority. Like it's good for the economy. And so I don't have to convince anyone on that. And that's made a big difference to what we can pull off. And I feel like that is obvious. I feel like you have had so much pull and have, I guess, garnered so much respect for that because it's obvious there's a team. It's obvious that people are backing you to go through this and you're not having to fight to go, no, do you know that this is also important? And I, as a female, adore seeing that. This year's budget has had to walk, I would say, a fine line between helping people and then making sure we're not fueling inflation. How in your role, how do you

Starting point is 00:05:47 actually make that balance work? How are you looking at inflation, but then also going, oh, honestly, we're in the middle of a cost of living crisis and we want to help people, but sometimes too much help actually sends it the wrong way. Yeah. And I think part of the challenge for people has been like in the GFC and in COVID, when there was sort of an economic crisis or something that we needed to, a shock, an economic shock, the response was to hand out money. So we got money to stimulate the economy. The issue with the inflation shock is that it's the opposite response. You've got to work out how to calm down demand in the economy. And I think that's been part of our challenges. People saying,

Starting point is 00:06:32 well, I'm under a lot of pressure. What are you doing for me now? And why aren't I getting the support that perhaps I got in the GFC, et cetera? You're right. It's a real balance. And we've had to find ways to help people, but doesn't add to the inflation challenge. So it's not simply like sending a checkout in the mail or something like that, which happened in the GFC. It's more about, okay, well, let's take some pressure off your energy bill. So you're not out with more money in your pocket, but it's reducing your costs in another way. And so, you know, we've made a lot of progress on inflation. It's come back towards ban. In this budget, it shows that it's coming back in sustainably into the normal range six months earlier, which is really good news.

Starting point is 00:07:13 But we also recognize people are still under pressure and that's why we have to try and find ways to help. Yeah. And I think a lot of people don't understand that balance. They go, well, why aren't they throwing more at this? You really have to step back and look at the bigger picture or the bigger umbrella to be able to understand, okay, well, if we actually just lined your pockets like we did in the GFC, we're actually stimulating the economy and a growing economy means inflation is going to increase the cost of eggs. And like, it all comes back to that and goes, all right, well, we could help you here. And I love that you're like, okay, well, let's look at the energy bill side of things. Let's actually take the pressure off while not hopefully stimulating

Starting point is 00:07:53 the economy in that way. I feel like there's been a lot of commentary as there always is when a budget happens, right? Like I think the budget is exciting, but the day after the budget is more exciting because all of the commentary comes out, all of the articles are online. Every man and his dog has an opinion. Yes, they do. And I love it. Again, I'm nosy, so I'm reading and devouring absolutely every part of it. In your view, what was this year's most misunderstood part of the budget? Well, to be honest, I have not even had time to read much about what people are saying about the budget I had a whole flight here I'll cut you up later yeah because like you say actually budget day is more controlled for us like because we've got the lock up we've got the set press

Starting point is 00:08:37 conference then the budget speech in the evening and then we do a few late press conferences but not a lot of people have read the detail but come Wednesday yeah everything's unleashed people you know stakeholders are having their you know two cents worth economists are out with all the big answers usually and a lot of free advice. What's been the most misunderstood? Well, I think for us, you know, we feel very strongly, Jim and I, that we've put together a budget that's right for the times, like right for the economy. And our thinking has been about that, not about politics. And I think there's been, from what I've seen, a lot of commentary saying, oh, this is just a political budget, you know, to get to the other side of an election because

Starting point is 00:09:20 on the eve of an election. And I know from the sort of tens of loads of hours that we've sat in the ERC room, that's not the case. Like we look at all what's happening in the economy, where are the areas of pressure, how can the government help? And we've made decisions we think in the national interest, but I think there's a lot of cynicism about politicians and politics and motivation. But yeah, I really think that if this wasn't an election year, we would still be handing down this budget. That's good to hear because I feel like so much of the narrative is it's a political budget. They're going to announce it in the next six weeks. So they're trying to appease everybody. And you just go, that actually wouldn't help their narrative. Let's say it comes back in

Starting point is 00:10:05 and Labor stays in. It actually doesn't help to just be political and say all these things that kept you in because you're going to be held to those standards as well, right? Yeah, exactly. Exactly. I mean, this is a priority for the next 12 months, not for the next six weeks. And I think governments have a responsibility to make decisions. Every decision we make is in the nation's interest, regardless of whether you voted for us or not. I mean, you know, we're responsible and we've tried to do our best, I think, as you say, kind of navigating that inflationary environment

Starting point is 00:10:36 with really sensible and good and responsible assistance to help people like Medicare, like HexDebt relief, cheaper medicines, like putting all of that out in a way that doesn't put cash in people's pockets and fuels the inflation challenge. Because in the long run, that makes everybody poorer. And that was the real challenge I think we've dealt with the last three years. Absolutely. I have the privilege of interviewing lots of people in business. And I was having a beautiful conversation with someone this morning about how sometimes when you get to a certain level in business or in politics, people stop seeing you as human and

Starting point is 00:11:13 think that maybe you are this all magical beast that somehow knows absolutely everything. I would see that as a pretty big responsibility, right? Like I wouldn't feel like the weight of the world was on my shoulders. Like that is a lot. How do you, from a more personal perspective, how do you deal with that? Because I'm in awe. I'm like, this woman is the coolest. Like she is the minister for finance. Not only that, the minister for women. I think that there has been so much done, but then people are vocal. That would be really hard. I get one Instagram message of someone saying that my hair doesn't look good. And I'm like, oh, maybe I'll cry under the table. How are you dealing with not just commentary, but knowing that that is a big responsibility?

Starting point is 00:11:57 Yeah, I think that's been a really big adjustment for me coming into this role. Really felt it. And I think it's probably, I sort of take the mystery away from it. It's like every job. I think when you come into a new job, you feel the weight of the responsibility. You don't want to mess up. There's things that you didn't know about the job that all of a sudden are part of the job. And over time you adjust to that and you get better at it. And so I feel like, you know, when people go, you know, tell me what your job's like, I feel like saying to them, well, it's probably very like yours, you know, every other job. There's processes, there's planning, I've got a boss, there's teams to work with, deadlines to meet. I didn't have time for lunch. Yeah, exactly.

Starting point is 00:12:35 And I think mine's a little bit different in it's more public and more contested at times. But other than that, it is like every other job. And I am like every other woman going to work. I've got kids at home. I've got a dog that needs walking. I need groceries that need buying. You know, I have the same anxieties as everyone else.

Starting point is 00:12:54 You have to push away imposter syndrome and think, oh my God, am I really up to this? You're telling me at this level, you still have imposter syndrome? I think everybody else is in a lot of trouble. I'm much better at it than when I was younger in my career where I really kind of was looking around going does everyone know that I'm at here and responsible for things whereas I'm much better now you learn that as you get older but I still feel like you know I guess for me it's part of taking the job seriously not thinking that I've got all the answers being open to advice being careful and thoughtful about how you make decisions but it's not a job for everyone I

Starting point is 00:13:32 I think, and on the social media stuff, I just don't look at it that way. Or when I do, I delve in and then I'm like, well, straight back out again. Like, okay. Because one, I feel like engaging with people and going, that is totally not true. And there's no point. There's just no point. So you can't change the opinion of somebody who's already decided what theirs is and is quite adamant with that. And that's okay, but that is a hard pill to swallow. Let's get back to the questions because I could talk about stuff like that for ages. This budget has a $27.6 million deficit. And there's lots of commentary. I'm telling you, we can talk about it later, but there's lots of commentary in the media about this. And the government's forecasting

Starting point is 00:14:15 more for years to come. For our community who is sitting there trying to budget for their own lives, that honestly sounds quite scary. Like billions, what do you mean? Even a million is out of reach. Can you explain why a deficit in government spending might actually be okay? Yeah. So, I mean, this is part of my job to try and explain this. And there's a lot of, you know, obviously this is a contested political environment. So there's a lot of, oh my God, there's deficits and the rest of it. It's important to use the budget to support the economy at different times. And so particularly coming through COVID, the former government really lent in and, you know, borrowed a lot of money to try and get people through JobKeeper

Starting point is 00:15:00 and other big payments like that. And what that did to the budget was it forced the budget into a pretty significant deficit. And it's important that you do that because we actually avoided a recession. People maintained their jobs. People were supported with social security payments. The media doesn't like that part though. No, they don't. No, they don't like that. That's not as exciting to talk about. That's right. But if you didn't do it. Yeah, we would be in trouble because that government made us go into a recession. Yes. So you're not going to win here. I'm so sorry to let you know. Well, I feel like part of my job is to tell a broader story to say the budget needs to lean in when government investment is needed. And then as you get

Starting point is 00:15:39 through an economic shock, the private sector returns, usually because they withdraw during economic shocks, they return and they take over their rightful place in the economy and the government can withdraw. And not entirely, because we pay all those payments to families and childcare subsidies and all our investments in other areas as well. But it means you don't have to lean in as heavily and you can take a step back and then you can repair the budget, which is what we've been doing over this term, where we've got more revenue coming in than expected, we pay down debt. We lowered the deficits and that's what we've been doing, but you can't just flick the switch off because if you tried to get into a surplus immediately, and we have delivered two

Starting point is 00:16:22 surpluses because we got more revenue and employment remained really strong. So we were able to deliver those, but going forward, it would mean some pretty significant cuts that people would really feel right now. And so it's sort of my calm methodical approach. We repair the budget over time and you bring the budget back into balance. And that's completely appropriate and really part of pretty standard economic theory. Yeah. I was explaining it in more, I guess, relatable terms to someone. Was that not relatable? No, it totally was relatable, but I was trying to like go, we've got good debt and we've got bad debt. And sometimes we have to take on some bad debt to actually project ourselves forward. Like sometimes we have to

Starting point is 00:17:04 take a step back and get a mortgage because we don't have the amount to purchase in full. Nobody does, but sometimes we need funding and the deficit is kind of like, all right, well, we can't afford a house, but we really need this. And we're going through this process. And I think that just understanding that a deficit doesn't mean that you're going to be in deficit forever. There's strategy, there's planning. I think it makes me feel a lot lighter about it. I go, oh, okay. So we're not absolutely burying the economy. It's actually strategic and there was a reason for this. That's right. And you can't just spend irresponsibly and go, oh, who cares? You know, who cares about the bottom line? We do. We totally do. But you've got to be kind of practical about

Starting point is 00:17:46 the expectations of what you're going to fund and how you fund it. And the other thing I'd say is you've got to look at the Commonwealth has a lot of assets as well. Like we've got a very good balance sheet from which to borrow against. And debt for us comes at pretty low interest rates and things like that. And we can deliver other outcomes by borrowing to invest in things. And that's your good debt, bad debt. I think we're on the same page about that. I do like the concept of investing. I've heard that. Katie, we're going to go to a really quick break, but guys stick around because when we come back, we're going to get into the stuff that hits a little bit closer to home. Tax cuts, we're going to touch on grocery bills, energy rebates,

Starting point is 00:18:25 and whether this budget actually is going to give you any breathing room. Don't go anywhere. Welcome back. We're here at Parliament House with Senator Katie Gallagher, the Minister for Finance and the Minister for Women. And we're going to dive into a few things, parts of the budget that the community really want to understand. But Katie, in the middle of the break, you were like, I want to talk a little bit more about women's health. I'm really passionate about it. Let's do that. I mean, you were touching on it before. I feel like we moved off it. Talk to me a little bit more about women's health and why it is so important. Yeah, well, this is a really big part of this budget. So each budget we've been trying

Starting point is 00:19:03 to work through priorities for women. So women's wages, women and work, early education and care, age care, all those kind of areas. And we keep doing that. But Jed Carney, who's the one of the assistant ministers for health has done this huge piece of work at looking at how the health system works for women or doesn't work for women and she found through her work some really you know amazing things like the no oral contraceptive pill had been listed on the pbs for the last three decades none of the new menopause treatments had been listed on pbs and women were paying out of pocket because you know many of those treatments are better for you have less side effects it makes And so this is part of having women involved in politics. When you have enough women involved in

Starting point is 00:19:53 politics, things like contraception, menopause, endometriosis, pelvic pain, IVF, all those things start being considered as priorities. And this budget deals with all of those in a pretty comprehensive way. It lists some of the new medications like Slinda for the oral contraceptive pill, a lot of new menopause treatment for women my age going through that, and also training up and helping healthcare professionals actually treat women, making sure the MBS allows doctors to insert IUDs without women paying those huge out-of-pocket costs. All of that is in this budget and it's a big investment, almost $800 million it costs, but the health system, because there hasn't been a lot of women in politics has gone under-recognized for too long and you know this

Starting point is 00:20:47 budget fixes that and so hopefully women will be saving hundreds of dollars. Now I have a question that's sidelining that it's on the same track and you've probably heard this from a plethora of women before but so many women go to the doctor and then have their pain or their symptoms dismissed they go and obviously it is so fantastic to have more funding but you know is funding enough to get doctors and health care providers to start taking women's issues seriously yeah that's I mean that's a different side right yeah and it's so many of us that have gone to doctors and been patted on the head and told well it's just period pain take some panadol yeah no norepinephrine and lie down you'll be fine so this yes it does it has a component here one of the elements which Jed

Starting point is 00:21:34 started and we're building on it is these endo and pelvic pain clinics, which are actually staffed by specialist GPs who are aware. I visited one, I think in Melbourne, and it was amazing just talking to the doctors, talking to the women who use the service, the kind of care that they are getting, the recognition that their pain is not in their head. And also that there's something you can do about it even changing your diet can help people who don't know if you haven't got access to those doctors exactly so you know simple changes that can be made for more complex people you know you might be a referral to a specialist whatever so we're opening some more of those and I just think they'll become a feature of the health landscape as it should and like

Starting point is 00:22:22 you're the minister for women I don't have to convince you but like I'm just in the background cheering you on, being like, yes, queen, that is exactly what we want to see. I'm going to pivot because I know that I don't have a heap of time left with you. In the treasurer's speech, he mentioned that we are going to be putting some more accountability onto supermarkets when it comes to the cost of living and the cost of groceries, which I know is going to appeal to my community because I think that's where most of us are starting to tap our cards and feel the pain, right? So that sounds great, but how does that actually translate to dollars at the checkout? When are people going to start to feel the impacts of this budget and the conversations

Starting point is 00:23:02 that are being had at the checkout? Yeah. No, I completely understand it. I do the shopping in my household too. And sometimes you just go, what? When you look at a price of something in the supermarket. So particularly over the last couple of years, I reckon. And so a couple of things there, the ACCC has done a piece of work. It's found that we've got a highly concentrated grocery market. So we have the two big players. We'd like more competition. So there's some effort going in there. We've got Aldi and that made a difference when it came in, but we need to make the system more competitive so that there's other players that feel like that they can compete. So part of it's making sure that system's right. We've also

Starting point is 00:23:40 got this, and I know it probably doesn't sound real for people when they're going around with their trolleys and looking at the prices, but there's a mandatory code of conduct being put in place, a mandatory food and grocery code, which actually sets out some pretty clear rules about how supermarkets are to behave. We're also attaching multi-million dollar penalties to that. Now there's been a voluntary code, but many people who work in this space will say voluntary codes never do anything. Yeah. So we've made it mandatory in law and we've significantly increased the penalty. So it actually, if they breach that code. It's not going to be worth it. Yeah. It's not going to commercially work that. And it kind of assists with, you know,

Starting point is 00:24:23 some of the complaints we've had from farmers who feel like that they can't raise a complaint if they're being treated badly by one of the supermarkets. They can now make an anonymous complaint to the ACCC and have that investigated so they don't have to fear retaliation. Yeah. That's really important. Yeah. Massively important because yeah, it's all about power. And when you've got a concentrated market, we know where the power sits. The other thing I'd say, and it's good if people take a look at it, we've funded choice to basically do a series of, you know, shopping basket assessments and publish that. So where is the cheapest basket of goods and who's offering it?

Starting point is 00:25:02 And they publish that now and it's free for everybody. And I think, you know, again, it might not change things overnight, but I think that transparency and accountability and consumers have a lot of power here too, to kind of take the time if they can to work out where they shop and what they shop for. And, you know, there'll be more to say on this, I think, because it's not a finished piece of work. Totally. My last question, because I am very aware that we are time limited. Labor said that this budget is about responsible spending. And I feel like we're all being very responsible, like we are pinching our pennies, which makes total sense in an inflation environment. But for someone in my community who might be skipping meals or spending 60% of their

Starting point is 00:25:46 income on their rent, I feel like sometimes that doesn't feel like it's enough. How do you define responsibility in that context? And how do you balance what the economy needs versus what the people needs? And I guess that wraps very nicely back around to what we were saying before, where sometimes we can't just put money in your pocket because it would grow the economy and that is literally the exact opposite of what we want to occur right now. Yeah, no, exactly. So, I think budgets are often seen in isolation. So, they think, oh, it's only the new things that are funded in this budget where they actually have money running through them year on year from what we did last year to what will happen next year. So, firstly, I'd say we've tried to look

Starting point is 00:26:30 at all of the ways that we can help people, particularly on low and fixed incomes. For example, with renters who have been feeling the pinch, part of the issue is the supply of housing. So we need to build more houses. Now that, for a person right now, they'll say, oh, well, that's not going to help me right now. So then it's things like rent assistance and increasing rent assistance, which we've done in two budgets. So we're trying to come at it each way, but without adding to inflation. And that has been tricky. The government is a big player in the economy. If the government pours a whole lot of money into an economy at a time when inflation is high, that hurts everyone. But it most hurts those on low and fixed incomes

Starting point is 00:27:11 who don't have a lot of discretionary use of their money. They spend almost all of their money just to keep up with living costs, basically. A budget is really about striking that balance and also accepting that this is a point in time. In a normal year, we finish the budget and we pretty much go into what's called the mid-year economic and fiscal update or commonly known as MAIFO, if you hear that word. We usually start MAIFO maybe three weeks after we finish the budget. So it's a continuous process. It never finishes. And so there's always room for new ideas. I love that. Katie, thank you so much for your time. This has been an absolute privilege and getting to sit down with you, especially after budget night.

Starting point is 00:27:56 I am very grateful because I am absolutely certain that your inbox is on fire. I haven't even looked at it, maybe. Don't, don't carry your head. But thank you for having me on. It's so great to be able to try and explain what we're doing, what we're up to. You are so welcome any time.

Starting point is 00:28:11 Let me know. And that's a wrap on our special budget episode recorded right here in Parliament House. A massive thank you to Senator Katie Gallagher for sitting down with us especially after budget night when I am absolutely certain that her inbox is on fire so if you're walking away from this episode feeling a little bit clearer a little bit more empowered or even just like someone finally explained what a structural deficit actually is my friend that's a money win if this helped do not gatekeep share it save it and hit subscribe

Starting point is 00:28:43 so you're always across the stuff that actually affects your wallet the advice shared on she's on the money is general in nature and does not consider your individual circumstances she's on the money exists purely for educational purposes and should not be relied upon to make an investment or financial decision if you do choose to buy a financial product read the pds tmd and obtain appropriate financial advice tailored towards your needs victoria divine and she's on the money are authorized representatives of money Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289.

She's On The Money - We Asked the Finance Minister What This Budget Really Does For You

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