SENATOR THE HON KATY GALLAGHER
MINISTER FINANCE
MINISTER FOR WOMEN
MINISTER FOR THE PUBLIC SERVICE
MINISTER FOR GOVERNMENT SERVICES
JIM CHALMERS MP
TREASURER
E&OE TRANSCRIPT
PRESS CONFERENCE
BRISBANE
MONDAY, 28 APRIL 2025
SUBJECTS: Labor costings, Australia’s AAA credit rating, Coalition costing holes, Peter Dutton’s cuts, nuclear in Dickson.
JIM CHALMERS, TREASURER: For the third time in a bit under five weeks, we're releasing detailed costings again today. We are making it very clear the cost of Labor's policies and how we will pay for them, much earlier than usual, at the start of the final week of the election campaign.
Responsible economic management has been a defining feature of this Albanese Labor Government, responsible economic managers throughout our first term, and responsible economic managers if we get a second term as well.
That is one of the key reasons why we have made so much progress together as Australians in our economy. We've got inflation down. We've got real wages and living standards up. Unemployment is very low. Interest rates have started to come down and growth is rebounding solidly in our economy as well.
Now a big part of our strategy has been budget repair, and there we've made a substantial amount of progress as well, back-to-back surpluses for the first time in almost two decades, a much smaller deficit this year, $177 billion less liberal debt, saving tens of billions of dollars in debt interest, $100 billion in savings, banking most of the upward revision to revenue, keeping real spending growth lower than what we inherited from our predecessors. This is what responsible economic management looks like, and it has been a defining feature of the Government that Anthony Albanese leads.
The costings that we released today show that we will more than offset our election campaign commitments in every year of the forward estimates. We will finish this election campaign with the budget in a stronger position than at the start of the election campaign. We have improved the budget position by more than a billion dollars comparing the Pre-election Outlook to the costings that we release today. Katy's talk us through some of the budget improvements, and then I wanted to say a few more things, and then we'll throw to you for your questions.
KATY GALLAGHER, MINISTER FOR FINANCE: Thanks very much, Jim. And Just following on from what Jim said, we've made responsible budget management a real feature of the work that we've done since 2022. We got rid of a lot of the waste and the rorts that was embedded in the former government's budget, and we returned that money to budget, and it allowed us, along with finding savings, to find room for those really important cost-of-living measures that we've been able to deliver through our budgets, our investments in Medicare, our investments in housing, the income tax cuts and other measures like lowering HECS debt. We've been able to find room for that because we fixed up a lot of the problems that were in the budget. We also did a lot of structural reform with areas like the NDIS and aged care to make sure that over the medium term, we were reducing some of the pressure that the budget faced.
Now, when we look at savings from 2022 to the budget, we found about $95 billion in savings. With the costings document we are releasing today and the decisions we've taken, we will bring that savings and reprioritisations to over $100 billion since we were elected in 2022. Now that is not an insignificant amount of work that's gone into that to find those savings, but it's been a really important part of repairing the budget, lowering debt, lowering interest payments on that debt, and making sure, which I think the Australian people expect us to do, that every dollar in the federal budget is used to support programs and people that deliver those services.
So the costings today, we will find a whole of government save in the order of $6.4 billion. This will be focused on non on non-wage expenses, so not on people or on programs, but on all of the other expenses and resourcing that whole of government has.
We've managed in the first term to find about $5.3 billion in savings in those areas. So this is really a continuation of that effort, and we have no doubt that we will be able to deliver those savings without impacting importantly on the services and the programs that the APS provide. So this will be a continued focus on expensive consultants and contractors and labour hire. In the additional public service that we’ve appointed people to jobs, about a third of them have come from converting labour hire, which was a favourite approach of the former government, very expensive, didn't deliver quality services.
We will continue that approach. I think our approach also recognises how important the public service is and how important it is to resource it properly, to do the job it needs to do, and stands us in stark contrast to the approach of the Opposition, which wants to cut and sack 41,000 public servants, which will decimate the public service and make it unable to deliver the services that people rely on, whether it be through Services Australia or Veterans’ Affairs, or engagement from business with the tax office.
That is the alternative here. So we will continue the approach we've taken on making sure we're making every dollar count, making sure we are driving those savings across government through, whether it be whole of government contracting, purchasing, travel, hospitality, legal, these are all areas that we've focused on in first term. There's also, as part of that, a small uplift in student visa fees. Again, we think that's a sensible measure that really prices, I think, the value of coming here and studying in Australia. So that will also be used, but that figure is not counted in our savings of over $100 billion.
So we're very pleased that we've been able to do this hard work. We've been able to offset the commitments that we've made post PEFO, for those that were announced beforehand, we found room in the Budget for those. I think this is what the Australian people expect when you come to managing the budget responsibly. It's what we've done in the first term. It’s what we would continue if we were fortunate enough to get a second term.
CHALMERS: So these costings show that we are managing the budget and the economy in a responsible and a considered and a methodical way. If you think about the roughly ten billion of commitments that we've made in this election campaign, 4 billion of that was already provided for and provisioned for either in the Budget or the Pre-election Economic and Fiscal Outlook, and the other $6 billion has been more than offset by the two budget improvements that Katy has identified.
Now we call on the Coalition now to come clean on their cuts. We've made it very clear what our costs are and how we will pay for the commitments that we have made in this election campaign. This continues a record of responsible economic management. It is long past time for the Coalition to come clean on their secret cuts to pay for their nuclear reactors. They need to come clean on what their secret cuts for nuclear reactors means for Medicare, for pensions and payments, for skills and housing and other essential investments in the budget.
Now we have put our costings out on the Monday of the final week of the election campaign. We call on the Coalition to release their costs and their cuts immediately. By our count, they have committed more than $60 billion in this election campaign and in their policy commitments, and that's before we get to their $600 billion of nuclear reactors.
So the test for the Coalition who should release their costings and their cuts immediately is whether or not the costings that they release includes all of those 10s of billions of dollars of commitments they've made. Now don't forget that David Littleproud said, and I'm quoting, “We'll start building the first nuclear power plant the very first day after a Coalition government's elected.” That means that any costings released by the Coalition which don't have their hundreds of billions of dollars for nuclear reactors will not be worth the paper that they're written on. The test for their costings is to come clean on their cuts. What does their spending mean for deficits, and also to include the nuclear reactors that David Littleproud says will begin to be built the very first day after they're elected if they're elected, that's a test for the coalition.
They also need to fix up the mistakes that they've made with their costings, whether it's the long lunches policy and the blowout there, whether it's the mistakes they made with mortgage deductibility or the changes they're proposing to petrol excise. They have very substantial holes in their costings and in their budget as a consequence.
When they release their costings, they need to release their cuts, they need to include the nuclear reactors, and they need to fix the mistakes they've made in at least three areas where the costs are substantially higher than what they have claimed.
Now Labor is the only party going to this election on Saturday with a costed, coherent and credible plan for our economy to build on the progress that we've made together as Australians. We are providing the stability and the responsibility, Peter Dutton poses an unacceptable risk to household budgets, to the national budget, to our economy, and also to our triple A credit rating as well.
In uncertain times, in volatile times, we don't need a volatile leader like Peter Dutton, who lashes out when he's under pressure. We need to see the stability, the responsibility that only Anthony Albanese can provide, which I think is highlighted by the costings that we release today. We are managing the economy in a responsible way. We are providing that stability in uncertain times. Peter Dutton offers only an unacceptable risk.]
Happy to take a few questions.
JOURNALIST: How were you able to find these labour hire contractor savings in the weeks since the post election financials but not for the budget a month ago?
GALLAGHER: We had a component of it in the budget. So you will remember, I think in the Budget papers, it's published about $780 million. This continues through the forward estimates about the increase of savings that we've sought over the first term. So with the commitments we've made, we've sought to offset them, and we can do it through finding savings across those areas that we've found them in in the first term.
JOURNALIST: I guess you’ve address it then but aren't these late savings and a cynical ploy so you can deliver better budget bottom line compared to when the election began, even though spending through the forwards has increased significantly.
CHALMERS: First of all, as Katy said, these savings that we're proposing today build on a record that we're very proud of. When we came to office, there was an explosion of spending on external labor and contractors and consultants at the same time as the Public Service had been hollowed out, and because we've got a wonderful Finance Minister and Minister for the Public Service, we've rebalanced that. We've invested in more capacity for the public service. We've gotten through all of that shameful backlog in veteran claims, for example, and one of the ways that we've improved the budget is to wind back the wasteful spending of our predecessors on contractors and on consultants and some of these other areas.
And so the difference between what we're proposing here and what our opponents have spoken about is they want to sack tens of thousands of people providing essential services. What we're talking about is not about winding back people, not about winding back their pay, not about winding back programs, but finding savings in other areas, and it builds on the work that we have already been doing.
JOURNALIST: S&P Global says that the AAA credit rating could be at risk because of election campaign spending, what do you say to that?
CHALMERS: The biggest risk to our triple A credit rating is Peter Dutton and the Coalition.
They won't come clean on their cuts. They've got more than $60 billion of commitments. They won't say where the money's coming from. They've got a $600 billion off-budget fund on the way, which is their nuclear reactors.
And so what we've shown, and what the ratings agencies will know now that we've released our costings, is the budget under us is in a stronger position at the end of the election campaign than it was at the beginning, and that is a powerful demonstration of our responsible economic management. It also sets up a pretty clear choice. Peter Dutton has got secret costs and secret cuts. He won't come clean on those cuts because Australians will be worse off when Peter Dutton cuts, Australians will pay. And so if the ratings agencies are worried about spending, we've been able to put their concerns to rest by releasing our costings today. It is long past time for Peter Dutton to do the same thing, to come clean on his cuts, because he can't find the $600 billion he needs to pay for his nuclear reactors without coming after Medicare again, like he did when he was the Health Minister in the Abbott government.
JOURNALIST: Can you promise will always maintain that triple A credit rating. And how worried are you about S&P this morning?
CHALMERS: Look, one of the things I'm most proud of is we got the triple A from the major ratings agencies with a stable outlook under Labor during and after the GFC. And so it's a source of considerable pride to us in the Labor Party as the party of responsible economic management that Australia achieved that rare level, rare in the world, because of the considered and methodical and responsible way that we manage the budget.
Now, if the ratings agencies are worried about spending and if they're worried about off-budget funds, we've demonstrated we've found the room for our election commitments. The budget is stronger at the end of the campaign than it was at the beginning.
But Peter Dutton is a big red flashing light when it comes to household budgets, when it comes to the national budget, and when it comes to the national economy in uncertain times. They have shown no ability whatsoever to come clean on their cuts or to say how they'll pay for their commitments. Now Peter Dutton poses an unacceptable risk to our budget and to household budgets, and that's why he won't come clean on his cuts.
JOURNALIST: Was this S&P alert a surprise for you when it came through?
CHALMERS: From time to time, the ratings agencies make their views known. We take their views seriously, and we're managing the budget responsibly.
I say to that particular agency, indeed, all of the ratings agencies, that in our time in office, we've engineered the biggest positive turnaround in a budget of any parliamentary term ever, a $207 billion improvement in the budget. We found $100 billion in savings. We've banked most of the upward revision to revenue. We've delivered two surpluses for the first time in almost two decades. We've got the deficit down. If you look at the monthly financial statements for the year that we're in right now, we're making even better progress this year than what we anticipated in the budget.
So one of the real stories of this Albanese Labor Government in its first term has been responsible economic management. We know that the ratings agencies are keeping a close eye on budgets right around the world. We welcome the focus on Australia because it gives us the opportunity, first of all to talk about our record of responsible economic management and budget repair, and also to talk about the contrast between us and our political opponents.
They've announced more than $60 billion in commitments. Peter Dutton has said he won't tell you where the money is coming from until after the election. So that should send a shiver up the spine of every Australian who remembers that when he was the Health Minister, he came after Medicare.
Now last night, in the debate, there are a number of interesting things about the debate last night, but one thing last night really stood out for me, and that was when Peter Dutton defended, made the case for, cuts to Medicare when he was the Health Minister. He said that he wants to make primary care sustainable, and that's how he defended the fact that he came after universal health care when he came after Medicare and tried to impose that GP tax. And so we've made it clear where the money's coming from when it comes to our election commitments. It's time he did as well. When he cuts, Australians pay. We've seen this movie before with Peter Dutton, tens of billions of dollars in cuts to hospitals, coming after Medicare. He will do it again if he's elected the Prime Minister on Saturday.
JOURNALIST: Is it safe to say if you’re elected, you’re committed to bringing down those forecasts budget deficits?
CHALMERS: We've shown an ability to bring those deficits down, including in the year we're in now. Better than that, in our first two years, we turned enormous liberal deficits into substantial labor surpluses. No Treasurer or Finance Minister or Prime Minister has been able to say for almost two decades that they delivered even one surplus budget. We delivered two together, and that's made a positive difference when it comes to debt and debt interest as well, dealing with some of the structural issues in the budget. And so I'm sure the ratings agencies have noticed the record turnaround, nominal turnaround in the budget on our watch. We know that responsible economic management is ongoing. It's not a destination. We know that it requires ongoing effort and attention, and that's why the savings that we've announced today are so important, because they more than pay for the commitments we've made in this campaign.
JOURNALIST: Treasurer, wow much of the savings on contractors and labour hire is travel and hospitality? How do you plan to crack down on this spending? Is it a new directive that's limiting future trips?
CHALMERS: Katy will take that for you.
GALLAGHER: So this is, we've started this work, so it started in 2022. The majority of the save will come from reducing on external labour, consultants and contractors. The Commonwealth is a big contractor of, purchaser of services and contracts, around $100 billion in the 23/24 year. So we're talking about a very small percentage of that that we would like to return to the budget as a save. So the majority comes through that. But there are, I think, in our first budget in October 2022, we had around half a billion dollars that came from legal, travel, hospitality, that kind of area, so non-wage expenses within departments. The way it works is that we've outlined this save. It would be updated through the budget process and removed from departmental expenses.
JOURNALIST: So S&P says one of the biggest issues is state government debt. Will you talk to your state counterparts about ways to reduce the sizes of their budget deficit?
CHALMERS: We're focused on our budget. We've got an important job to do, and that's why we're focused on more than paying for the commitments we've made in this election campaign. I think more or less most, if not all, state budgets are under pressure as well. What I try to do is not take shots at them about the way that they're managing their budget. I think everybody knows that a number of state budgets are under substantial pressure as well. Our job is to is to focus on ours.
I wanted to make one more point before we finished up, and this is for the people of Dickson, the people of Peter Dutton's local community, who may not have tuned in to the debate last night, I wanted to say this.
Peter Dutton was asked last night, would he be happy to have a nuclear power plant in his suburb, in his local community in Dickson? And his answer was, “yeah, I would”. And so to all of those people in that wonderful part of southeast Queensland, in the electorate of Dickson, you all need to know that your local member wants to build a nuclear reactor in your suburbs now. So far, he has pretended that these reactors would only be far away from the suburbs, and what he said last night, when he said the quiet bit out loud, should be a factor in and a feature of your decision making as you work out who you want to represent you. Now, Ali France is not going to build a nuclear reactor in your local community, but Peter Dutton wants to, and so I'd encourage you to think about that over the course of the next five days, as you choose your local member. Peter Dutton wants to build a nuclear reactor in the suburbs of Dickson, Ali France never would.
Thanks very much.
ENDS
