Senator the Hon Katy Gallagher

KARL STEFANOVIC, HOST: Well, they’ll be riding waves of a different kind though this week in Canberra, won’t they, as the Treasurer hands down the Federal Budget, promising more cost-of-living relief for struggling Aussies. For more, we’re joined by Finance Minister Katy Gallagher in Canberra. Katy, good morning to you, thanks for your time this morning, appreciate it. Look, you promised cheaper power, interest rates have gone through the roof, the cost-of-living is out of control for families. Australians are a little sceptical. Do you know what you’re doing?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Absolutely, Karl. And this week you’ll see a Budget, a responsible Budget, a Budget that puts downward pressure on inflation and still seeks to help those that are doing it tough, cost-of-living relief for people and, as well, lays the foundations for future growth. So, there’s a lot in this Budget. There’s a lot of anticipation on Monday, but I think when people see the decisions they’ll see that they’ve got a government focused on dealing with all of the pressure we see across the economy.

STEFANOVIC: I think people are a little confused about the stoush brewing in the playground between your government and the RBA. Has the RBA got their inflation projections wrong?

GALLAGHER: Well, the inflation projections or the forecasts that are done by the RBA are done independently of government, obviously. The Treasury forecasts, which will be released in the Budget, have taken into consideration all of the decisions we’ve taken in the Budget. Obviously that wasn’t available to the RBA. So, you know I don’t think there’s any surprise that there’s a bit of a difference there. But that goes to the point I made that the decisions we’ve taken in this Budget put downward pressure on inflation. We want to be part of the solution, not part of the problem. And we want to make sure we can give people some cost-of-living relief. So, the tax cuts obviously are the big part of that in this Budget, but some further cost-of-living relief in recognition that people are doing it really tough right around the country.

STEFANOVIC: Let’s drill into that a little bit more. So, you’re saying inflation will be in the target band by year’s end, categorically?

GALLAGHER: Well they’re the Treasury forecasts. And they make those based on the decisions that we’ve taken. Obviously, they’re forecasts. There’s more work to do and you know we don’t think that the inflation challenge is complete or that the job’s done. There is more work to do. We recognise that, which is why we’ve been mindful of it. It’s been one of those kind of primary areas of focus for us in the decisions that we’ve taken.

STEFANOVIC: Alright, what’s in the Budget that will actually reduce inflation?

GALLAGHER: Well, you’ll have to wait until Tuesday night, Karl. We’ve got decisions, obviously – we’ve made some decisions ahead of that, but we’ve got further decisions that’ll be announced by the Treasurer in the speech on Tuesday night.

STEFANOVIC: What I’m saying is there’s nothing been flagged that indicates to anyone that they’re not going to be inflationary, any of the measures you’re suggesting. It’s an awful lot riding on no more interest rate rises for your government.

GALLAGHER: Well, you’ll see I think when you look at the decisions that we’ve taken around spending, Karl – and savings, we’ve been trying to find savings – obviously the first Budget surplus in 15 years does a lot of heavy lifting towards putting downward pressure on inflation. We’ve got savings in the Budget and then when you look at the spending in the Budget, you’ve got to not only look at the size of the spending, you’ve got to look at the composition of it, the timing of it and the quality of it –

STEFANOVIC: There’s – sorry, I was just going to say there’s also a lot riding on projections from Treasury.

GALLAGHER: Well, forecasts are a normal feature of every Budget. You know, Treasury do those in every economic update. This is their best assessment of the economic circumstances we’re living in plus the decisions that we’ve taken in the Budget.

STEFANOVIC: Alright, we’ll wait and see what happens. I did note with interest this morning – and Sam Maiden’s got an article on Jim Chalmers – we’ve dug up this photo of Jimmy Chalmers in his hey-day. There he is. I guess the assumption is that he’s bringing a bit of sexy back to the Budget this week. Would you agree with him, Katy?

GALLAGHER: Well, that’s a very relaxed and young-looking Jim Chalmers. I haven’t seen that photo before but I can say that’s the kind of style that he brings to the ERC room.

STEFANOVIC: Righto. Let’s see if it’s as successful as his nights out at City Rowers back in the day. Katy, appreciate your time, thank you so much.

GALLAGHER: Thanks Karl.