Joint press conference, Blue Room, Canberra

MICHELLE ROWLAND:

Good morning. I'm here with the Treasurer today to announce new measures that the Government is taking in response to the Optus data breach and the importance of protecting consumers going forward. What we're going to do is amend the telecommunications regulations to do two things. This is going to enable Optus and other telcos to better coordinate with financial institutions to detect and mitigate the risks of malicious activity, including ID theft and scams. And the second is to allow Optus to share limited information about customers with government agencies, like Services Australia, to assist in preventing fraud. Now, what this is all about is trying to reduce the impact of this data breach on Optus customers and to enable financial institutions to implement enhanced safeguards and monitoring. That's because we take people's personal information and the protection of that very seriously. We have consulted widely in relation to these measures, and done proper diligence in respect of what would be the most appropriate instrument to give effect to this. We have designed these regulations with strong privacy and security safeguards to ensure that only limited information is made available for a specific set of designated purposes. For example, financial services entities who will be eligible to receive the data must be APRA regulated financial institutions, information can only be used for the sole purposes of preventing or responding to cyber security incidents, fraud, scam activity or identity theft; the approved recipients must satisfy very robust information security requirements and protocols for the transfer and storage of data; and information received must be destroyed when it's no longer required.

As I said, we have undertaken extensive consultation across the financial services sector, with telco providers, with the Privacy Commissioner and across ministers in developing this change. It really has been a whole‑of‑government effort, and one that is designed with the sole purpose of protecting consumers going forward. I would just like to note that these regulations will be the latest in a raft of rapid but very measured initiatives under this Government in response to this breach with the sole purpose of keeping Australians safe. We have been working closely as ministers to mitigate the risk. The AFP launched Operation Hurricane in coordination with the FBI as part of that attempt to identify those behind the breach and that is, of course ongoing, and the AFP separately launched Operation Guardian to provide special monitoring and protection to some 10,000 customers who had their information released on the dark web. As I've said previously, other ministers have also impressed upon Optus their obligations to mitigate the risks to Australians. And it is pleasing to see that Optus announced that it would fund 12 month credit monitoring services for affected customers. So these new regulations will facilitate targeted data sharing between telcos and financial institutions. And Australians should rest assured that this Government remains committed to coordinating and bringing the full resources of government to mitigate the risks to Australians as a result of this data breach.

JIM CHALMERS:

Thanks very much, Michelle. I want to pay tribute to Michelle for her work that she's been doing, working closely with Clare O'Neil and Mark Dreyfus and Bill Shorten and Stephen Jones and others, and with the Prime Minister, of course, to get to the position where we can announce these regulations today. Michelle has been working around the clock with those other colleagues to make sure that we are doing what we can to protect consumers who have been impacted by the Optus data breach. The proposed amendments we're announcing today come after extensive consultation with the financial regulators and other financial institutions on how we can best protect consumers following that Optus data breach. We've worked really closely with the industry, with APRA, the ACCC, the Information Commissioner and other agencies to ensure that we can facilitate as best we can, the safe and secure sharing of data between Optus and regulated financial institutions with appropriate safeguards, and commitments given by the affected parties. I want to thank the regulators and the industry.

We have been convening meetings with regulators, with the industry, with banks and others for much of the last week and a half, to make sure that we get to this position where we can make this announcement today. The banks and other financial institutions have been quite proactive, I should say, in putting in place heightened controls to protect their customers and these regulations that we're proposing to the Governor‑General, are all about building on those efforts to allow the banks to undertake enhanced monitoring and put in place additional safeguards. They've been carefully designed with strong privacy and security safeguards to ensure that only limited information can be made available temporarily, to prevent and respond to cybersecurity incidents, fraud, scams and related activities. They cover, as Michelle said, financial institutions that are regulated by APRA apart from the foreign bank branches, and they give Michelle as Communications Minister, the ability to specifically add financial service entities if required, but only where those entities are related to or support an APRA regulated entity. Entities will be able to receive government identifier information such as driver's licence numbers, Medicare and passport numbers of the affected customers, but not names, addresses dates of birth or other personal information. And what this does, is it helps ensure that the information which is shared, is appropriately targeted. And to be eligible to receive the data, the institutions need to make a number of undertakings in writing, they need to comply with the Privacy Act obligations to the ACCC, which are enforceable under Australian Consumer Law. They need to meet APRA's relevant information security standard, they need to ensure the information they're seeking is necessary and proportionate. They need to satisfy robust security requirements and protocols for data transfer and storage, and they need to ensure that the information that they get is destroyed when it's no longer required.

It's important that we note here that for data security reasons, we won't be disclosing the details of any financial institutions that receive the data from Optus, and this is based on strong advice from the regulators. We also recognise that some entities including non‑APRA regulated entities, and some of the smaller institutions may not be eligible or have the capacity to digest this data in this form. And that's why we've asked the Council of Financial Regulators to examine options to improve the ability of financial institutions to identify their at‑risk customers via the Australian Financial Crimes Exchange, which is an existing secure data sharing platform. These steps that we announce today are all about helping Optus and the financial services sector and the relevant agencies work together more effectively, to protect customers affected by the breach. If there are further steps that need to be taken, we will take them. Clare O'Neil, Michelle Rowland and other ministers have made that clear. We think this is a really important step that we're taking today but if further steps are required, we'll take them.

JOURNALIST:

Treasurer, you both said that these regulations will mean that companies will have to dispose of this data when it's no longer required ‑ I just want to drill down on what that actually means. Because we know from the Optus hack, that it was holding personal data for 20 years or more. How long will companies be allowed to hold that data and what will happen to them if they hold it for too long?

ROWLAND:

Banks who receive the data need to continue to review the need to hold that data every 12 months, and if it is no longer required it needs to be destroyed. So there is that threshold requirement there. I also point out the regulations are only in place for 12 months, and we will review the need for them to continue in their current or future form.

JOURNALIST:

On the weekend, the Government was critical of Optus for not sharing some of this information to allow for this sort of process. Could you take us through it? Is that because they didn't have the power or the ability to do that previously? Or was it because they were choosing not to for whatever reason or I was kind of a combination?

ROWLAND:

The Telecommunications Act sets up a very specific regime for the non‑disclosure of communications and personal information. It is there for a very good reason, it's been there for a long time and that's in addition to requirements under the Privacy Act. But the way in which it operates under the telecommunications regime is there as an explicit prohibition and the only means and authority that is given to disclose information is under a very limited and specific range of circumstances. Optus put the view to the Government that in their analysis, they were not covered by one of these exemptions. So we examined this, did proper due diligence, and I think we need to be clear these regulations are specifically in response to these cyber threats. We know that these are on a scale and scope that actually hasn't happened in Australia before. So we considered it prudent having taken and considered the proper legal advice, that the most effective way to enable this data to be shared beyond doubt was through amending these regulations.

JOURNALIST:

There's been criticism of the Government in the wake of the Optus hack that you're forcing too much collection of personal data. Is it appropriate that these measures are brought ahead of privacy measures which would perhaps correct that amount of collection of personal data?

ROWLAND:

I think there's two streams of work here. The first is that there has been an ongoing privacy review which the previous Government dropped the ball on. But the key thing here is that the Attorney‑General's made it clear that we will be reviewing the current privacy regime and the way in which Australians' personal information is collected, used and disclosed. But the other point here as well, is that there are some regimes including in financial services, and including in telco where there are very specific reasons why certain information is gathered and needs to be stored. And just to give you one example, prepaid phone information ‑ to be able to get a prepaid service, a number of these regulations actually tightened over the years, as prepaid mobile services were used to commit some very serious offences so there were good reasons for putting these in place. But there is indeed a raft of sometimes conflicting measures across different sectors for why personal information is there. Now, this is a large job. And I think, ultimately, this is about getting the balance right between what those sectors actually need, and how consumers are protected. I will make this point ‑ I think that consumers who have been affected by the data breach, their primary concern here is a privacy one ‑ who has my personal information, who has my government identifiers? So in taking this very measured approach to these regulations that we're announcing today, we have very carefully balanced their privacy concerns with those guardrails with the need to ensure that financial institutions have what they need to keep Australians safe.

JOURNALIST:

Minister I just want to clarify, please correct me if I'm wrong here but is this an extension of the financial institutions consumer data right and open banking regime? And on the CDR, in 12 months' time this is reviewed. Should we be looking at telcos and energy providers to have access to that regime for better storage of data protection?

ROWLAND:

It's not precisely the same and the CDR as it applies to telco is one that's currently being considered at the moment. This is a separate set of regulations specifically under the Telecommunications Act and specifically for this purpose of cyber crime.

CHALMERS:

Olivia.

JOURNALIST:

Treasurer, why did you float that balloon on stage three tax cuts the other day? Did the Prime Minister give you permission to do so? And have you been reprimanded for it?

CHALMERS:

I don't need permission to point out that every Budget that we hand down, including the one that I'll hand down in less than three weeks' time will put a premium on responsible economic management. My commitment to the Australian people, the Government's commitment to the Australian people, is to do what we can to make sure that our Budgets are responsible, affordable, sustainable, and targeted to the economic conditions that we confront. I made that point earlier in the week in this room, I've been making that point for some time. And I stand by that. No responsible government can ignore high and rising inflation, a deteriorating global situation, or the fact that we've got these persistent structural pressures on the Budget. And so I will continue to make the point that in the context of those three things, we need to make sure that spending in the Budget is responsible and affordable and sustainable and sufficiently targeted to the pretty substantial challenges that we confront. We're going to go Rachel, then Shane, then we're going to go Clare, and then we're going to come back here to Reece.

JOURNALIST:

Optus was previously charged by the Government with essentially misleading the public about the nature of the hacking and its response. What's changed now about the way Optus has handled it to make the Government confident that it's a trustworthy partner to share this data with other institutions? Does the Government trust Optus?

ROWLAND:

I believe it's important that consumers understand that these regulations are being put in place solely for their protection. So our primary concern here is to ensure that we do whatever we can under law to enable those risks to be mitigated in terms of ID theft, fraud, and other misuse of their data. So that is our primary focus here. We have been in constant contact with Optus over the last two weeks, including in relation to what would be the most effective instrument and one that will give effect to those changes as quickly as possible.

CHALMERS:

Shane.

JOURNALIST:

Treasurer, back on tax. The last few months, about 10 million people have been receiving the last lamington. In terms of policy, you've got 10 million people facing tax increases for the next two years. Is that a good use of money and will that have a macroeconomic ramification?

CHALMERS:

We've been supportive in the past of the LMITO for good reason and that's because we support genuine tax relief for people on low and middle incomes and that's what that policy was designed to provide. And that's why we supported the low and middle income tax offset through the Parliament. It is a fact that it expires and as I've said repeatedly in relation to this, in relation to some of the other matters that get put to me in this room and around the country, any spending that we propose in the Budget that we hand down in less than three weeks' time will be responsible and sustainable and affordable and targeted to the conditions that we confront. Clare.

JOURNALIST:

Does the premium placed on responsible Budget management therefore trump your election commitment to deliver those stage three tax cuts, particularly given that inflation and debt was a clear and present issue in May when you reiterated the commitment to deliver that? Or also given that there has been apparently a substantial change in the last few months, what makes you so confident that by mid‑2024, we won't again be in a very different position and clearly able to deliver those cuts?

CHALMERS:

There are a few parts in that question. First of all, when it comes to the stage three tax cuts, our position hasn't changed. Secondly, the point that I've made, including this week, is that I think the global conditions have deteriorated sharply in the course of the last few weeks and that's a point that has been made by the OECD, the IMF, the World Bank and others. Our expectations for the global economy have deteriorated even in the course of the last few weeks. Your question about the next couple of years I think is a good one too. My job as the Treasurer of this country is to make sure that the Budget is on as sustainable footing as it can be to deal with the challenges that we anticipate. We already know we've got high and rising inflation, we already know that the global situation has deteriorated, we know that we've got this big, persistent structural pressures on spending. And so, in the context of all of that, we need to make sure we're building our buffers to the extent that we can against what might come at us over the course of the next couple of years and that we're dealing with these challenges which are before us. And that's the job, not just of the Treasurer, but of the Government, of the Budget that I'll hand down in the course of the next three weeks. I think I said Reece but we'll go here, then Reece, and then the naughty kids up the back.

JOURNALIST:

Rod Sims called for various tax reforms today. One of them is increasing taxes on oil and gas companies or mining companies more generally because of these record profits that they're making. Is that something that you're going to be considering in the next Budget?

CHALMERS:

No, that's not something that we've been working up for announcement in October. Reece.

JOURNALIST:

Treasurer, will the Prime Minister raise security concerns around China with Prime Minister Sogavare and how would you describe that current relationship with the Solomons?

CHALMERS:

It's a matter for the Prime Minister what he raises with Prime Minister Sogavare. It's an important opportunity for the two leaders to spend time together and to talk about all of the issues that we confront. I think one of the defining features of the first few months of this Government has been the effort that we have put in to our Pacific brothers and sisters at a time where there is heightened global uncertainty. So I think you can anticipate from that, that challenges in the region and the broader geopolitics that we all confront, particularly in our neighbourhood, will be something that they'll discuss but I'll leave it for him to run you through that in any detail. We'll go Greg, then Phil.

JOURNALIST:

Brendan O'Connor said this morning that the debate around stage three may be premature, because they don't come in until 2024. We don't know what the economic circumstances will be. Then he said a week is a long time in politics, two years is an eternity. So why have you started this debate? Why are you reviewing it now if these are the views of your most senior colleagues?

CHALMERS:

I think I answered that when I was responding to Clare's good question earlier. Our job in putting together the Budget, the Treasurer, the Prime Minister, the Expenditure Review Committee, that Michelle plays such an important role on. Our job is to make sure that our spending is sustainable, and that we anticipate challenges that are coming at us, and that we've got the best possible Budget settings to deal with those challenges. And that's the position that we're taking across the board, not necessarily just in one particular area or another, and I think that's the responsible way to go about it. If there's going to be one a defining feature of this Budget that I hand down in less than three weeks now, it's going to be responsible economic management. In the context of a deteriorating global situation, high and rising inflation, and persistent structural pressures on the budget. Phil.

JOURNALIST:

To both of you. Treasurer, you just said, not for this Budget, PRRT or oil and gas sector taxes. Are you now open to maybe doing it in a subsequent Budget? And to Ms Rowland, you've got a marginal seat in Western Sydney, do you think your electors would accept a broken promise on tax cuts?

CHALMERS:

On the question about PRRT, we've not been working up any options for this Budget or subsequent Budgets. You'd be aware and others in the room who followed this issue closely, know that my predecessor set up a process around the PRRT, which was paused for good reason, because of work that was being done on the COVID response. At some point, the Treasury will decide whether or not to continue that work. But it's not something that I've been focused on. I haven't been working up a reform proposal for the October Budget or for the May Budget either.

ROWLAND:

As the Treasurer articulated, I think all Australians, not only in my electorate but beyond, expect us to deliver a sustainable and responsible Budget, exactly as the Treasurer said.

JOURNALIST:

Treasurer, a quick follow up on that one. It's been noticeable in the last couple of days, no caucus members have come out publicly to say scale back day three tax cuts. Do you accept that there's this reluctance within the Labor caucus to break that election promise? What's your view on that reluctance?

CHALMERS:

I have the highest regard for my colleagues. And I understand that there are a number of big challenging issues in the Budget, and not just that one that people will have a view on. And I can't remember a more talented, diverse, considered party room than the one that we have right now. And so I respect their opinion. And it's not a big surprise to me that on an issue as big as this, there'll be a range of views. There are a range of views in Peter Dutton's party room. Bridget Archer has come out and said that these tax cuts should be reconsidered. Russell Broadbent has come out and said that these tax cuts should be reconsidered. I think that is inevitable when you're dealing with an issue of this nature and this magnitude. I'm not troubled by the views that people have put forward. And people have put a lot of views to me privately from all parts of the conversation as well. I welcome that. I'm not surprised by that. And I'm not troubled by that. We're going to go John, and then James, and then Ron, and then Katherine, and then we're done.

JOURNALIST:

Thanks Treasurer, it will be your first Budget. It's not unusual for new governments to introduce a new set of fiscal rules when they deliver their first budgets, is that something you're considering? In the past, we've had, you know, tax to GDP or real spending growth of two per cent, that sort of thing. Are you going to have something like that, and what would it be?

CHALMERS:

There will be a fiscal strategy in the Budget, as you'd expect, as there has been for some years. The difference is, we intend to print a credible fiscal strategy that we intend to stick with, and governments of different persuasions have put fiscal strategies in the Budget over the years. I think over the course of the last decade, there have been a number of breaches of the Government's own fiscal strategy. So the work that we put into ours and the thinking that goes into ours, is all about putting a premium on what's responsible, and also what's achievable. And so I think you can expect that there will be a fiscal strategy in the Budget. It will take into account a lot of the things that we've talked about today. James, then Ron, then Katharine.

JOURNALIST:

Just on a slightly different issue Treasurer. A lot of state and territory leaders have said that the pandemic has dramatically stretched their health and hospital systems. And a couple like the idea of increasing the Medicare levy, even temporarily for the highest income, is that something you might consider?

CHALMERS:

That's not something that we're considering. But we do want to work with the states and territories to make sure that we can adequately fund their health systems. There are five big pressures on the Commonwealth Budget‑ the cost of servicing debt, health care, aged care, NDIS, and defence. And I've been engaged with my state and territory counterparts a number of times now, when it comes to dealing with those fast growing areas of government spending. The Prime Minister has been doing likewise with the premiers. We acknowledge that there are pressures on the health system. We have already announced additional funding, particularly around COVID. And we've tried to be up‑front with the Australian people about some of this unavoidable and desirable spending in our health system, or in other important services that people rely on and value. Our job is to try and make sure that there's sufficient room in the Budget to fund them adequately. Ron, then Katharine.

JOURNALIST:

A double‑header. You keep referring to the PRRT work that was paused during the pandemic, and at some stage Treasury might pick that up. You're the Treasurer, you can direct the workflow of Treasury, why don't you just have them pick that up and get on with it saying is it seems to be a fairly important piece of work? And then secondly, just on Labor's commitment to pick up the cost of the increase in aged care workers‑ a fairly substantial budget hit there‑ you previously talked about aged care providers driving Maseratis, making lots of money. Is it still Labor's commitment to fully fund that increase? Or will you look at alternatives where some of those costs might be placed back onto providers?

CHALMERS:

The answer to your first question is, I haven't made it a priority. And I understand that the Treasurer's got a role to play in setting the priorities of the Treasury. We've got a few other more pressing priorities when it comes to this Budget. Secondly, on aged care wages, we recognise that aged care workers are doing some of the most important work in our community, and are among the lowest paid. And we said before the election, during the election, and subsequently, that the Fair Work Commission decision, which we expect over the course of the next six months or so, on my latest information, would need to be funded. And I think Scott Morrison, to his credit before the election said the same thing‑ a government of either persuasion would need to fund a decision out of the Fair Work Commission when it comes to aged care wages. That's our expectation. We don't know the magnitude of that decision, we don't know the staging of it, the shape of that decision. And when we do know that we'll have more to say about how we fund it. Katharine.

JOURNALIST:

Just a point of clarity from both of you if I may. Treasurer, you said in relation to super profits, that it's not a priority for you at this point in time. There's no proposal that you're working up specifically for May or for October. But repeatedly, obviously pre‑election and since, you have left open the field of multinational tax avoidance as one area. So can we get a straight answer about whether or not this is a priority you might get to over the course of this government? Because you haven't ruled it out prior to the election. So, if we can get just a straight answer, is it something that you are looking at over this term of government? And also to Michelle, if I may, I think from what you said before, just in response to Phil's question about how would your constituents view a broken promise on stage three, I think you have been supportive of the discussion. Is that your position? Or are you concerned about how your constituents may respond in the events that the Government either amends or delays, or changes the stage three package?

CHALMERS:

So on your first question about the PRRT, I haven't spent any time coming up with a proposal to change it. You're asking me down the track, would that ever change? Not my expectation. But let's see what the advice is. Let's see what further work happens. Let's see developments that happen over the course of this term, but I am being up‑front and saying, it's not something that we've asked for an outcome on. It's not something that I've been working up for October or May. That's levelling with you, we've got other issues that we are focused on. And then Michelle, for the last part of the last question.

ROWLAND:

I think it's important to understand that across Australia, people expect this Government to be responsive and to ensure that we have exactly as the Treasurer articulated ‑ a sustainable and responsible Budget ‑ I think that's what Australians are looking for in three weeks' time.

CHALMERS:

Thanks very much.