Finance Minister Katy Gallagher wants ministers to be more financially accountable

Labor ministers will have to scour their own departments for savings and existing funds to finance future new ideas and pet projects under a permanent cycle of budget repair.

Labor ministers will have to scour their own departments for savings and existing funds to finance future new ideas and pet projects under a permanent cycle of budget repair to rein in spending and pay down Australia’s trillion-dollar debt.

All programs will be evaluated ahead of every budget in a bid to ensure taxpayers are getting the best bang for their buck, with only a handful of exemptions made for new spending on major flagship reforms, as Labor seeks to balance borrowing costs against cost-of-living pressures.

In an exclusive interview Finance Minister Katy Gallagher told Newscorp she had a “true state of what the books look like” after “flushing out” half-funded or expiring commitments from previous Coalition government, and now her focus would shift to ensuring her own Labor colleagues don’t get carried away with spending.

“Ministers are having to look (at their budgets) and say okay well within this, I can make some changes, and don’t need as much funding from you,” Ms Gallagher said.

The federal budget handed down on Tuesday will include $17.8 billion in savings and reprioritised spending, of which $7.8bn will be reinvested within the Defence Integrated Investment Program as part of the government’s response to the Defence Strategic Review released last month.

Finance Minister Katy Gallagher is making ministers change their ways. Picture: NCA NewsWire / Martin Ollman

Ms Gallagher said she wanted to continually “redeploy” resources and said just because departments had been doing things certain ways for a “long time” that did not mean their approach was a “priority now”.

“Part of that is getting ministers to be more in control and direct about what the government’s priorities are,” she said.

“I think for discretionary kinds of things, ministerial ideas, grant programs, it’s about have a look (at what’s already being spent).”

Ms Gallagher said she believed her colleagues found this approach “useful”.

“They’ve gone and had a chat with their department secretaries and they’ll come back and say, well there’s this program that which you know I can amend,” she said.

Treasurer Jim Chalmers and Finance Minister Katy Gallagher hold the cards to the budget. Picture: NCA NewsWire / Martin Ollman

“That’s also helped Finance understand where all of the money is in departments.”

Ms Gallagher said she was also looking to “tighten” up departments’ use of “bottom draws” to stash funding in so they could “do projects themselves”.

Despite expectations Labor will deliver a surplus on Tuesday, the budget is in serious structural deficit and requires significant changes to spending and revenue in order to stay in the black long term, which Ms Gallagher said meant the government “can’t do everything” it wants.

Katy Gallagher said she was also looking to “tighten” up departments’ use of “bottom draws” to stash funding. Picture: NCA NewsWire / Martin Ollman

“The budget is thousands of decisions to try to find the right balance,” she said.

“And part of that balance is telling the people that you’re managing their money properly.”

Ms Gallagher said in recent years the public had been told the budget could do a “whole range of things … that turned out to not entirely be accurate”.

“We want people to see what kind of structure the budget looks like and be pretty aware upfront about what the challenges are coming forward,” she said.

Ms Gallagher said Anthony Albanese had been “enormously helpful” in helping her and Treasurer Jim Chalmers set the tone for spending among their senior cabinet colleagues, describing the Prime Minister as a “pretty frugal guy”.

Originally published as Finance Minister Katy Gallagher wants ministers to be more financially accountable