Senator the Hon Katy Gallagher

LISA MILLAR, CO-HOST: Australians are set to welcome a boost to their bottom line this morning. The new financial year is ushering in cost-of-living relief in the form of tax cuts, wage increases and energy rebates.

MICHAEL ROWLAND, CO-HOST: The changes will affect millions of workers, while the $300 energy rebate will come to each and every household. For more, Finance Minister Katy Gallagher joins us now from Canberra. Minister, very good morning to you.

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Good morning Michael, thanks for having me on.

ROWLAND: You’re more than welcome. Now, these changes have been in the pipeline for some time, but I want to start with that breaking news yesterday, the indefinite suspension of your Senate colleague Fatima Payman from the Labor caucus. Do you agree with the Prime Minister’s move?

GALLAGHER: Well, it’s a privilege to serve as a member of the Labor caucus, Michael. Not many people get the opportunity to do so, and one of the responsibilities in being a member of that caucus is that we stand together. We take decisions together and we stand together and there has to be a consequence when one of our own decides not to do that. And so, you know, Senator Payman, we’ve been supportive, we’ve talked with her and you know, made sure that she understands what her decisions are doing on the caucus. And there had to be some consequence and the Prime Minister has acted in a very mature way, a very reasonable way, but there has to be a consequence.

ROWLAND: Did Fatima Payman essentially force the PM’s hand when she told David Speers on Insiders yesterday she was prepared to cross the floor again on a similar motion?

GALLAGHER: Well, I think it was clear that from Senator Payman’s own statements, that she said she would be prepared to cross the floor again. And I think the discussion the Prime Minister had with her was that you know, until you can commit to the solidarity and collective action that you know members of the Labor caucus take part in, you can’t really be a part of that caucus. So, you know, again, I think there has to be a consequence. But it was Senator Payman’s own decisions and statements that have led to this.

ROWLAND: Do you see a time where she would be welcomed back into the caucus, down the track?

GALLAGHER: Look, I very much hope so. She’s been a good colleague. She’s a fantastic politician. But you know, there has to be a consequence for this. That’s one of the privileges of being in the Labor caucus, is that we stand together, and when that doesn’t happen you know there is a response. But I’m hopeful, but that really is a matter for Senator Payman now.

ROWLAND: Are you worried there could be blowback from Muslim Australians, Minister? Because a lot of them share Fatima Payman’s very strong views about what’s going on in Gaza.

GALLAGHER: Well, so does – the entire Labor caucus are concerned about what’s happening in Gaza. Which is why under the leadership of the Prime Minister and Foreign Minister, we have made it clear, months and months ago, about the ceasefire that we would like to see, actually saying that how Israel responded to October 7 matters, we’ve been very clear about it. Including providing millions in financial support. But you know the motion last week was a Greens wedge motion, as we experience in the Senate from time to time. And it ultimately failed. And I would argue it didn’t change anything in the Middle East, which is the work that’s before the Foreign Minister and Prime Minister in being you know a trusted and responsible voice on these international matters.

ROWLAND: Okay, I want to turn now to the tax cuts and energy rebates, but before going there, I want to ask you – you must be filthy? All of this is overshadowing what was going to be a red letter day for the Labor party today.

GALLAGHER: Well, 1 July is here, Michael. And it doesn’t change the fact that we will have tax cuts going to every taxpayer –

ROWLAND: There are a lot of front pages though, as you would have seen, devoted to what’s going on regarding Fatima Payman.

GALLAGHER: Look, these are things that are outside of our control. They are decisions that Senator Payman has made. We need to respond to that, we have responded to that, but ultimately, when it – you know, the focus of the Government is on cost-of-living and that’s why 1 July is such an important date. Because some of those cost-of-living measures will start flowing through to people’s pay packets, and that’s what matters to Australian households and that’s what we’re focused on.

ROWLAND: Okay. So, are you absolutely confident that all of these measures – which will pump billions and billions of dollars into the economy – won’t force up inflation further? Because as you well know, it’s on the rise again.

GALLAGHER: Well, the tax cuts, Michael, have been factored into the Treasury and RBA forecasts for some time. They’ve been legislated for some time. So, they have been looking at those when they’re putting together their forecasts for inflation. And on say the Commonwealth Rent Assistance and the energy bill relief that will go to every household, that’s $300 for every household to help them with their energy bills, the ABS showed last week in their data release that those measures actually put downward pressure on inflation. So, you know, the inflation challenge is there, we’re focused on it, that’s why our budget was carefully calibrated. But these important cost-of-living measures are targeted to take pressure off the inflation challenge across the economy.

ROWLAND: Just on that front, your colleague the Treasurer, Jim Chalmers, yesterday said and I’m quoting him directly: the interest rates already in the system are putting, in his words, a lot of pressure on people. What will be the consequence of another possible rate rise on households?

GALLAGHER: Well, I don’t think it’s useful for me to speculate about a hypothetical situation or a decision that’s taken by the independent Reserve Bank. But we know from the interest rates we’ve had to date, that they have had a huge impact on household budgets and they’re having a significant impact on the economy throughout – you can see it through a range of datasets. Whether it be in retail, trade or consumption, you’re seeing those, you know, the impacts of those interest rate increases come through that data. But we know, more importantly, when people are putting their household budgets together, they’re you know under pressure, particularly if you have a mortgage. And that’s why we’ve targeted our cost-of-living relief directly into households to help them with those challenges.

ROWLAND: Okay, Katy Gallagher, appreciate your time this morning, lots to talk about. Thank you.

GALLAGHER: Yes. Thank you Michael.