The PRESIDENT: Senator Babet, I believe this is also your first question. Congratulations.

Senator BABET (Victoria) (14:53): Yes, it is; thank you, President. My question is to the Minister representing the Treasurer, Senator Gallagher. Can the minister update the Senate on what the government is going to do to reduce the $963 billion of national debt?

Senator GALLAGHER (Australian Capital Territory) (14:53): I thank Senator Babet for the question, his first question in this place. The senator is right to point out that we face a significant challenge managing the almost $1 trillion—it will hit $1 trillion next financial year—of Liberal debt that has been left for this government to manage.

Senator Hughes: That’s not true!

Senator GALLAGHER: It is true. There’s $1 trillion of Liberal debt that is left in the budget to manage. There’s debt going out into the future. Whilst those opposite would like to say that this is all a result of the pandemic, the former government had doubled the debt before the pandemic hit. Let’s not forget that. Their fiscal vandals had done the damage before the pandemic hit, and now we are all going to be paying the price for it—and the cost of servicing that debt is increasing and increasing rapidly.

We’ve seen the latest figures from the Treasurer that some of the cost of servicing the debt is going to exceed programs that currently pay for the childcare subsidy, higher education—those types of programs run by the Commonwealth government. The cost of servicing debt is going to exceed those. That’s the situation we’re in, and that’s why the work we’re doing, Senator Babet, going through the budget line by line, is to see where sensible savings can be made so that we can reduce that debt over time.

It is one of the key challenges facing us as we work through the Expenditure Review Committee to make sure that we can deal with some of those challenges over time, and servicing debt and managing the debt is a really important part of strong, responsible budget management.

The PRESIDENT: Senator Babet, a first supplementary?

Senator BABET (14:55): Inflation has just risen to a horrifying figure of 6.1 per cent—absolutely
huge. The cost of electricity is a component of CPI. What is the government’s plan to reduce the cost of electricity?

Senator GALLAGHER (14:55): I thank the senator for the question. The Labor government went to the last election with a plan known as the Powering Australia plan. That involves setting up rewiring Australia, which is a fund—

Senator Rennick interjecting—

Senator GALLAGHER: Well, we have to modernise the grid. I won’t interject to Senator Rennick, but, in case he hadn’t noticed, we need to work out how to get more renewables into the grid so we that can lower power prices, something that you guys failed to do over years and years. We need to grab the opportunities that are going to come with modernising the electricity grid so that it can take in more renewables—good for lowering our emissions and lowering power prices.

The cheapest energy is renewable energy, and we can’t get it into the grid, because you guys did nothing. So that is what we’ll do.

Senator Carol Brown interjecting—

The PRESIDENT: Order! Senator Brown. I’ll call all senators to order. This is Senator Babet’s first set of
questions. He has the right to ask them in silence and hear the answers in silence. Second supplementary, Senator Babet?

Senator BABET (14:57): The RBA has increased the cash rate, which has triggered an increase in
home loan rates. What’s the government’s plan to help the millions of Australians who will experience hardship as a result of not being able to meet their ever-increasing mortgage repayments?

Senator GALLAGHER (14:57): I thank the senator for the question. It’s an important question because it’s about how households manage with increasing costs not just from mortgages but from going to the shops, filling their cars up—the prices of everything are going up.

The areas that we think we can make the most difference as a government—obviously there are the short-term additional payments that were made through the former government’s budget, which are still going through the system. But where we believe the most responsible investments can be made to support households so that they can manage some of these costs are by trying to lower power prices, lower childcare costs, getting wages moving and dealing with some of the supply chain blockages and disruption that we’ve seen. Those are actually the areas where we, as a government, can make a difference. I think everybody understands the challenges that people are facing and that they can’t be fixed overnight, but we’re a responsible government that’s going to make those investments to help over the longer term.