SENATOR THE HON KATY GALLAGHER
MINISTER FINANCE
MINISTER FOR WOMEN
MINISTER FOR THE PUBLIC SERVICE
MINISTER FOR GOVERNMENT SERVICES
E&OE TRANSCRIPT
TV INTERVIEW
ABC AFTERNOON BRIEFING
MONDAY, 28 APRIL 2025
SUBJECTS: Election costings; Public service; Student visas; National credit rating; Welcome to Country.
EVELYN MANFIELD, HOST: Minister, welcome back to Afternoon Briefing. Just earlier, you flagged $6.4 billion in savings by directing agencies to further reduce spending on consultants, contractors, and labour hire, as well as some non-wage expenses like travel, hospitality, and property. Can you give us some more details here? What are you cutting?
KATY GALLAGHER, MINISTER FOR FINANCE: So, we've released our costings today, and thanks for having me on the show. And what our costings show is that we've been able to offset the spending that we've announced in the campaign and actually leave the Budget in better shape than at budget time. So, that's a significant commitment and it shows that responsible economic management that we've bought to our budget processes, essentially where we want to find further whole-of-government savings is really in those areas you outlined. The Government is a big spender in procurement and contracts usually in the order of about $100 billion a year. We think there's room to make further reductions in that area to make sure that we are using every taxpayer's dollar wisely, but also we've resourced the public service properly, so we've got more staff there doing the jobs they need to do, and at that time we can look for further efficiencies through these savings across the four years. So, they are modest in the spending, overall spending of government services. They don't affect programs or people, and that's a real contrast, I think, with what the opposition is saying, which is in the order of $28 billion worth of cuts and 41,000 jobs that they want to sack the public service. We've taken a different approach.
MANFIELD: I'm just curious, Minister, though, $6.4 billion, it's not nothing. So, what exactly would be cut here in terms of consultancies? What would that look like for one of our public service agencies?
GALLAGHER: So, in the last term we found $5.3 billion in savings in this area. So, it's a continuation in a sense of the approach that we took since 2022 when our first budget was handed down. And that really is saying to people and the public service secretaries, well now that we are resourcing -- we're putting people into the jobs to deliver the services -- we expect to see a reduction in the use of consultants and contractors across your department. We think that is a reasonable and sensible approach because we are resourcing the public service properly. Again, a bit of a contrast between what the opposition are proposing. We'd also look at areas like hospitality, travel, legal, property savings. We've already seen quite a significant reduction in our leasing costs in the order of about 18 per cent. We think more can be done there. So, this is really looking -- and I think the Australian people expect us to do this. When you're a big employer like the Commonwealth, how can you make sure that every dollar stretches as far as it needs to go?
MANFIELD: Sure. Just to briefly follow up on that, things like travel and hospitality, does that mean, I guess they would have more of these meetings online rather in person? Is that what you'd be hoping for?
GALLAGHER: Well, absolutely. We've seen the nature of work change. People do a lot of work online, so I think we, in the last parliament, we reduced that part of the Budget by about $500 million. We've already found those savings. We want to continue to keep the pressure on, and this is at a time when we're essentially rebuilding the public service from the days of Robodebt and PwC. We want public servants doing public servant jobs. We will work with the CPSU as we have in the first term and make sure we protect the public servants and the services they provide. But at the same time, like any business or any big organisation, you've got to make sure that every dollar is being spent wisely.
MANFIELD: You also mention in your press release, Minister, that agencies will be encouraged to find savings from productivity gains in things like flexible work and new technology. So, how would that work in terms of savings as well?
GALLAGHER: So, I've been in charge of the Digital Transformation Agency, the DTA. We are seeing increased utilisation of technology across our workplaces across Australia, the public service is no different there. And I think there are further opportunities in whole-of-government purchasing around it that we need to implement. So, that's part of it. We need to make sure that those are being driven from the centre in the most cost effective way. Often long-term contracts, sometimes five years, as we're renewing those, we need to make sure that we're getting the best outcome there. But also when it comes to working from home, and I mentioned property costs before, because we have got a hybrid workplace or where people are allowed to work flexibly, and we know this has been a big issue in the election campaign when there was a threat to remove working from home arrangements, we've already seen that desk utilisation is up, property leasing spaces down. These are the types of returns to the Budget. And what that means is we can then use that money to invest in Medicare and all those other services that people want. But we thought it was important, Jim -- the Treasurer and I -- thought it was important to get the costings out earlier than usual Monday of the final week. And I guess now the pressure is on and we'd be calling on Peter Dutton to release their costings and be upfront with what the cuts are going to be to pay for those nuclear reactors he wants to build.
MANFIELD: Sure. I just want to focus on your costings for now, Minister. Another part of this is to do with student visa applications. You've said that you'll raise an extra $760 million from increasing the cost of visa applications for students to $2,000, and that'll take place from the 1st of July this year. Is that designed to be a deterrent for foreign students?
GALLAGHER: Not at all. I think it puts an appropriate price on the value of coming and studying in Australia. We know that international students love to come and study here. It's highly sought after, our educational institutions. But we also feel like when we're issuing visas, that they should properly reflect the benefit that comes from coming to study in Australia. That's good for the Budget. I think it's good for international education and a sensible and modest change to again repair the Budget and ensure that we are able to fully offset the commitments we've made in this campaign and actually have a budget in a better nick than we announced at budget time. That's not an insignificant statement to the Australian people about our responsible economic management.
MANFIELD: Okay. I'm keen to cover a bit more ground today. You would've seen one of the world's biggest credit ratings agencies, S&P Global, has put both Labor and the Liberals on notice that Australia could lose its AAA credit rating. If your election promises result in larger structural budget deficits, how seriously are you taking this warning?
GALLAGHER: Well, obviously we listen to global ratings agencies and it was a Labor government that secured that AAA credit rating post-GFC, and it's one that we have done a lot of work to protect in government, and we will continue to do so. And I think our commitment of issuing our costings today that show that the Budget is actually slightly better off over the four forward estimates because of the decisions we've taken, reinforces the approach that we want to take and I think is in line with some of those issues raised by S&P, but again, in stark contrast to a $600 billion nuclear off budget fund. I mean, that would completely destroy Australia's credit rating. We've been sensible, careful --
MANFIELD: If you're reelected, can you guarantee that you would keep the credit rating?
GALLAGHER: Well, I think we've clearly shown today the decisions we've taken about how much we respect the AAA credit rating. It is important and the decisions we've made to offset all of our spending, to actually reduce the size of the deficit, deliver two surpluses, halve the deficit in this year, lower debt, lower the interest on that debt, actually shows the seriousness with which we approach this task. And again, I think stands in stark contrast to the Opposition and their nuclear fantasy.
MANFIELD: I want to ask you about another story today. It's been reported that Labor first became aware back in March that Russia had made some sort of request to transit aircraft through an Indonesian air base. Was Cabinet briefed about this at the time?
GALLAGHER: Well, I think the PM has dealt with this today. I mean, we do not discuss intelligence briefings publicly. I mean, that is what a mature government in receipt of that information holds dear, that that information is kept appropriately, not used in media responses. So, I think the PM has answered that comprehensively today.
MANFIELD: I also just want to ask you about some comments from Opposition leader Peter Dutton. He was saying that an Anzac Day dawn service wouldn't necessarily be an event that he thinks should continue to have Welcome to Country ceremonies. What's your response to this, do you think Anzac Day dawn services should have Welcome to Countries?
GALLAGHER: Well, I think Peter Dutton always goes to trying to reignite culture wars when he's trying to avoid discussing things like costs and cuts of nuclear. And that's exactly what we are seeing. I think the PM again dealt with this last night. We think a Welcome to Country, Acknowledgement of Country shows respect and that is important, but we also recognise that people have different views about this and organisations make their own decisions about how they conduct their events. Now, I've been to many events where organisations have prioritised that respect for First Nations Australians and have shown either done an Acknowledgement of Country or asked for a Welcome to Country to be provided by a traditional owner. And I think that's appropriate. But I really think Peter Dutton is trying to distract from the big questions which he needs to answer, which are about costs and cuts.
MANFIELD: Okay. Finance Minister Katy Gallagher, we really appreciate your time on this final week of the campaign.
ENDS
