Senator the Hon Katy Gallagher

KARL STEFANOVIC: Well, there is hope this morning that Australians will get a much-needed rate cut by the end of this year after inflation hit its lowest level in two years. Fingers crossed, huh. For more, we’re joined by the Finance Minister, Katy Gallagher. Katy, good morning to you. Nice to see you.

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Thanks for having me on.

STEFANOVIC: Look, before we get to that, I noted with interest this morning, reading The Australian, that there’s speculation the Treasurer, Jim Chalmers, and the PM are off each other. Is that true?

GALLAGHER: Absolutely not. I saw those reports as well. And I work closely with both of those guys, and I can tell you they are good mates. They work closely together. And it's great to work with both of them. And, particularly over the last couple of weeks, we've been in daily contact and working really closely together on finalising the tax cuts package. So, I don't know where that speculation has come from, but it's certainly not true.

STEFANOVIC: I'll tell you where it's come from. From Bill Shorten’s former chief of staff. So, not a reliable witness, Your Honour?

GALLAGHER: Well, there's a lot of opinions that get written up in papers. Some of them are true, some of them aren’t. And that’s certainly not true, that one. I can put that to rest. And I'm probably the one that works the closest with them. So, yep. Absolutely not true.

STEFANOVIC: There you go, that’s an emphatic denial. I'll tell you what – I mean, it's just a nasty rumour – tell you what else is nasty, a $15 pint. And this is part of the problem, isn't it? Retail is slowing. Prices aren't coming down. What's there to get excited about?

GALLAGHER: Well, I think in relation to that previous story you had, there are indexation arrangements that increase prices, they’re standard, they’ve happened under both governments. But in relation to the CPI figures that we saw yesterday, they are really encouraging, Karl, because it is showing that inflation is moderating. Inflation has been a killer on household budgets for the last 12 months and we've been trying to make sure that every decision we take doesn't add to the inflation pressure and the Bank’s been doing the job that it needs to do. And these results are really encouraging because it means, you know, those high prices are coming off.

STEFANOVIC: Okay. Would you mind repeating after me this morning? There will be no changes to negative gearing under our government.

GALLAGHER: We have no plans to do that, Karl. We don't. We've got a full tax reform –

STEFANOVIC: No plans. That’s not what I asked.

GALLAGHER: Well –

STEFANOVIC: Would you mind repeating it? There'll be no changes to negative gearing under my government?

GALLAGHER: It’s not my government, it's the Albanese Government and we have no plans on negative gearing. It's just not on our agenda at all. We've got a full tax reform…

STEFANOVIC: No plans, or no changes?

GALLAGHER: No plans for changes to negative gearing. I mean, we've explained why we've changed our view on tax. We've been upfront with people. It has been a change to position. We've fronted up, we've accepted that. We want more tax cuts in more people's pockets. And we're out there explaining that every day. But I understand it is a change in our position. But our tax reform agenda is high-balance super accounts, PRRT, multinational tax reform, tobacco tax reform and our tax cuts package which we'll be taking to the Parliament next week.

STEFANOVIC: Okay, there'll be no changes, either, to tax breaks for asset owners under your government?

GALLAGHER: Again, Karl, we have no plans on that front. I've just explained the areas on tax that we are focused on. And those are all either before the Parliament or will be before the Parliament.

STEFANOVIC: Okay, so – so, Labor legend Bill Kelty, who you'd know pretty well. You're gonna get on the phone to him and say, you know, I respect you but there's not going to be any changes.

GALLAGHER: Well, there's a whole range of people that have views around our tax – I know there's people calling for a tax summit. There's think tanks and institutes that want to see movement on certain things. There's a whole range of other people that don't want to see tax changes to the areas you've outlined. And the government's job is to look at what we think is possible, what is responsible and right. And that's why we've outlined our tax plan that we announced last week and we'll be getting through. Because it's about getting more money into people's pockets – and, you know, on your show every day, Karl, it’s around cost-of-living and what we can do to ease those pressures. And that's why we've taken the decision we have.

STEFANOVIC: You know what, Katy, I can rest easy now. Knowing that the Treasurer and the PM are still in love.

GALLAGHER: Yeah, well, it's an important relationship, Karl. And it's an important one to have that strong. And it is. And I can assure you that all those rumours in the Aus are wrong.

STEFANOVIC: Good to talk to you, Katy, thanks for your time.