Senator the Hon Katy Gallagher

LISA MILLAR, HOST: Let’s go straight to Finance Minister Katy Gallagher, who joins us now from Canberra. Minister, good morning, welcome to the program.

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

MILLAR: I know you don’t want to say the word, but how close are we to going into a recession?

GALLAGHER: Well, I think you’ve been talking this morning about the narrow path. The Treasury forecast the economy to continue to grow, as does the Reserve Bank’s forecast. But there’s no doubt – and the National Accounts March quarter data released yesterday shows you know just how slow and weak the economy is right now. And I think it shows that the decisions we took in the Budget around making sure we could provide relief to households was right.

MILLAR: You heard the Treasurer saying yesterday that he’s striking the right balance out of that Budget, but why does the RBA Governor not seem convinced by that? Because she’s certainly leaving the door open for more interest rate hikes if necessary.

GALLAGHER: Well, I’ll let the Governor speak for herself, but what I took from her evidence in Estimates yesterday was that the Bank will act on the data that they see. You know, I think – we acknowledge that inflation remains a focus, both for the Government and obviously for the Bank, but at the same time that we are watching inflation, we’re also watching the fact that we need to focus on growth and support in the economy and particularly in this Budget, tax cuts and energy bill relief, cost-of-living relief for households who are clearly doing it really tough and are under enormous pressure.

MILLAR: At this point in the Government’s term, how can the responsibility for the state of the economy not be landing squarely on your desk and the Treasurer’s desk, the Government’s desk?

GALLAGHER: Well, we’ve taken responsibility for the decisions we make in supporting the economy since we came to government. We inherited this high inflation environment and we’ve been managing that for the last couple of years and we’ve seen welcome progress. You know, we’re getting the Budget in better shape, inflation is moderating, we’ve seen enormous jobs growth, we’ve got wages moving again. So there’s a lot of strength happening. Good areas to focus on. But we’ve never pretended that there aren’t challenges that the economy faces, which is why some of the commentary around the Budget – and you know people saying we should slash and burn and not provide cost-of-living relief at this time – has proven to be wrong. And we were right to try and strike that right balance between managing inflation but also recognising that the economy’s weak and we need to make sure we’re helping households during this time.

MILLAR: What would another interest rate rise do at the moment to people out there?

GALLAGHER: Well, again, I’ll leave those decisions to the Reserve Bank. I don’t think it provides any use for me to provide commentary on it other than we recognise that those series of interest rate increases – reflected in the National Accounts I should say yesterday – are putting households under enormous pressure. Particularly those with mortgages. And that’s why tax cuts, cost-of-living relief, a focus on growth has been reflected in the decisions we took in the Budget.

MILLAR: Well, they haven’t been reflected, in a way, because we’re seeing the annual growth just limping along at the moment. When are people going to start feeling that the Australian economy is becoming healthier? Because you talk about inflation, well it’s dropping a whole lot quicker in other countries than it is here in Australia.

GALLAGHER: Lisa, I mean, certainly – and the inflation trajectory in other countries has been, you know, it’s the same in terms of trajectory but in other countries it peaked earlier than it did here. So, we are seeing inflation moderate in welcome ways. We want that to continue. The Treasury forecasts have that continuing, getting back into band. And, we’ve got really, you know, some good things happening. We’ve got jobs being created, we’ve got very low unemployment, we’ve got wages moving again, we’ve got tax cuts coming through, we’ve got energy bill relief. All coming at a time when households are doing it tough and we hope that that provides some support to those households. But at the same time when we look at some of the opportunities with the Net Zero transition and the focus that we’re putting on a Future Made In Australia, that’s what I’m saying when we’re focusing on growth and new areas to grow the economy at a time when you know the people expect their government to be doing these things.

MILLAR: Can I turn to another matter and this fiery debate over the pro-Palestinian protest that we saw in Parliament yesterday, the debate in Parliament, and then the response from Adam Bandt, the Greens leader. Do the Greens have a point that they’re saying – you are seeing the frustration from many Australians who are angry at the lack of outrage from the Australian government at what is going on in Gaza?

GALLAGHER: Well, I think we’ve been clear about our concern for the people of Gaza, the fact that we’ve been calling for a ceasefire, the fact that we’ve been calling for more humanitarian assistance to go and to go quickly. So, I think that some of the frustration you saw in the Parliament was with the continuation of the Greens’ misrepresenting the Commonwealth Government’s position. But also I think – we recognise that there is a lot of concern and fear and distress in the community about the events in the Middle East. I think the point the Prime Minister was making yesterday and has made before is that it’s the role of political leaders, leaders in the community, to try and bring the country together, not stoke social division and fear. And I know that many of my colleagues haven’t been able to open their electorate offices as they normally would and that pressure is being reflected I think – and frustration – in the Prime Minister’s comments. We should all be together standing as a Parliament in Australia’s national interest. And that is about bringing the country together, not stoking division and not spreading misinformation across the community.

MILLAR: Alright, thanks very much Katy Gallagher for your time this morning.

GALLAGHER: Thanks for having me on.