Today show host Sam Armytage has mocked the Albanian government’s claims that it has reined in spending after a mid-year budget update revealed a growing deficit.
On Thursday morning, Armytage began his interview with Finance Minister Katy Gallagher by calling the budget figures revealed on Wednesday “bleak”, with a deficit that has soared by almost $22 billion and a national debt forecast that will exceed one billion dollars.
In response, Senator Gallagher claimed that the government had found $92 billion in savings, Armytage interrupted with a skeptical laugh.
“You’re spending more, more than you predicted,” Armytage said.
Senator Gallagher, unfazed, continued on.
“We’ve found $92 billion in savings, we’ve reduced the debt, we’ve reduced the interest on that debt and we’ve had two surpluses,” he said.
“The budget is $200 billion better than what we inherited, and that’s because of the decisions we’ve made, but yes, there’s more work to do, there’s always more work to do.”
Earlier, Armytage asked why spending had not been controlled.
Today show host Sam Armytage laughed at a federal minister’s claim that the Albanian government was cutting spending.
‘These figures are discouraging. You say it’s a balancing act, but spending here has skyrocketed. Why haven’t you controlled it? Armytage asked.
Senator Gallagher blamed automatic payments.
“I think one of the reasons we’ve seen some slippages, as you say in your introduction, really has to do with payments that are automatic, meaning pensions, payments to veterans, use of Medicare, the use of the child care subsidy,” he said. .
“Those are important supports the government is providing to the Australian community to ensure people get the help they need.”
Armytage noted that the government had set aside $5.5 billion for an electoral “war fund.”
“So will we see more cost of living support promised by the Treasurer before the election, because this is all Australians are talking about right now?” he asked.
Senator Gallagher did not refer to new measures, but listed actions the government had already taken, such as subsidizing energy bills, Stage 3 tax cuts, childcare subsidies and HEC grants.
“We are looking at what more we can do to ensure we support the cost of living for the Australian people and we will continue to do so,” Senator Gallagher said.
Finance Minister Katy Gallagher (pictured right) insisted the Albanian government had controlled spending.
When pressed further about the cuts, Senator Gallagher only said what the government would not touch.
“We will make reasonable savings, we will not slash and burn,” he said.
“We’re not going to pretend that you can cut Medicare or cut the child care subsidy or cut pensions as a way to improve the budget balance because people deserve those services too and depend on them.”
On Wednesday, Treasurer Jim Chalmers gave a mid-year update on the federal budget.
Figures showed the budget bottom line is expected to be $21.8 billion worse than previously forecast over the next four years, the mid-year economic and fiscal outlook revealed.
With spending rising due to challenges such as an aging population and tax revenue falling due to slow economic growth, Australia is not expected to return to surplus until 2034/35.
Cherelle Murphy, chief economist at EY, warned that government finances have long been in structural decline, but nothing is being done to reverse it.
Deficit reductions are expected to add an additional $49 billion to public debt by 2027/28, meaning more money will need to be dedicated to interest payments.
That meant less flexibility to solve future problems, according to Murphy.
“The government has failed to find a way to raise the prosperity of the Australian people and get out of the debt burden,” he said.
“We need a plan to boost our productivity through major reforms – including, importantly, those to our tax system, trade and education – or we will face higher taxes and cuts to essential services in the future.”