Senator the Hon Katy Gallagher

LISA MILLAR, HOST: We have managed to catch a bit of the Olympics each morning. I'm not sure whether our next guest has. She’s got a lot on her plate. Finance Minister Katy Gallagher joins us now from Brisbane, good morning minister. I’ve got to ask you, have you managed to catch any of the Olympics action?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Yes, I have. I’m totally addicted to it. And in fact the timing of this interview was excellent, because I was able to watch those last couple of swimming finals just before I came on.

MILLAR: Yeah, early mornings, there’s got to be something for it. Hey, lots of big news stories ticking around, I actually want to kick off with our top story this morning before we start talking about inflation and interest rates, and that’s the warning that came about Australians in Lebanon. We’ve heard this really firm warning from Penny Wong. As a senior cabinet minister in the Government, how concerned are you about Australians who might not be taking those warnings seriously?

GALLAGHER: Yes, so we’re certainly urging Australians in Lebanon to come home, to do it while – before, you know, we see any further escalation of this regional conflict – and make sure that you know they register with DFAT, they seek out information and you know make plans to come home. You know, we’re really concerned about the possibility of regional escalation in the Middle East and we want Australians to take it seriously if they are in that region.

MILLAR: Can I turn to inflation and what would have been consuming your time yesterday, keeping an eagle eye on that figure. Better than what a lot of people were hoping, a sense of relief I imagine for you. Do you now expect interest rates not to go up next week?

GALLAGHER: Well, Lisa, I think I’ve said that that’s really a matter for the Reserve Bank. Obviously, they make those decisions. I think you know, looking at the data, it was important information yesterday. We see that it’s largely in line with the RBA forecast. Importantly, underlying inflation continues to moderate. It remains higher than we would like, of course. So you know, we’re doing everything we can to make sure we’re putting downward pressure on inflation and working hand-in-hand with the Bank.

MILLAR: Would you have done anything differently over the last year in particular when it came to what the Government was spending and decisions being made?

GALLAGHER: Sorry, I didn’t catch the beginning of that question, but I think – sorry, yeah, go –

MILLAR: Would you have done anything differently in regards to the decisions made, given that there have been question marks over how much money the Government has been putting into the economy?

GALLAGHER: Well, we’ve been very mindful of that. You know, there’s no shortage of calls for extra spending from the Budget. We believe the decisions we’ve taken have been very responsible, they’ve been targeted indeed to sort of help people with those cost-of-living pressures but not add to the inflation challenge. And in the data released yesterday, you can see that some of those policies, whether it be energy or some of our rent assistance, are actually putting downward pressure on inflation. So I mean, this has been a challenge since we came to government, where inflation was much higher than it is now. So, it’s absolutely been on our desk. Every decision we take is mindful of our spending decisions and how they impact on the economy. And I think you know, again, we get a lot of criticism for not spending enough. Our decisions have really been making sure we’re making those right, responsible decisions that don’t put extra pressure on the Bank when it’s making their decisions.

MILLAR: Well, the opinion polls are certainly showing that people are – you’re wearing the blame for what they’re feeling right now. So, what do you say to those who are watching that the cost-of-living is still so high and so many people are hurting?

GALLAGHER: Yeah look, it’s really challenging circumstances for people and we get that. We totally understand. Cost-of-living is the main issue facing everyone I talk to and all my colleagues talk to, that’s why it’s been such a focus for us in terms of the decisions we take. You know, the tax cuts, the energy bill relief, the other support we can provide to people, but it’s got to be responsible and we can’t be making decisions that you know add to the inflation challenge. So, we are trying to find the right balance and we get that people are doing it tough, and that’s why we’re continuing to focus on everything that we can do to make their lives easier.

MILLAR: What are you gonna do for Rex Airlines? That’s the big question, isn’t it right now? Are you going to offer a line of credit, are there some deep pockets that are needed here, how much is the Government going to do?

GALLAGHER: Well, first of all I think for the staff and those affected by Rex, really difficult time. So, we’re thinking of them. They need to know that their Government is working with all of those people that are involved with Rex at the moment – there’s a lot of parties involved – to work out what the right thing to do is. So, as the Prime Minister and I think the Treasurer and the Infrastructure Minister have said, we’re looking at all options on the table and we’ll continue to work with everybody over the next couple of days –

MILLAR: What does it mean, all options –

GALLAGHER: To get to a good outcome.

MILLAR: Yeah, what do all options mean?

GALLAGHER: Well you know, we’re not ruling anything out, we’re not ruling anything out. We’ve got to have a sensible process of decision making. We’ve got to make sure that we land on the right decision. We recognise the important role that Rex plays, particularly in the regions, on those critical routes where there aren’t other airlines. We need to make sure that we continue to offer a regional airline service in Australia. We’re a big country with a lot of landmass and people need to travel around in a convenient way. So, we’ll come to the final decision, but at this point, we’re still in those important discussions and we’re not ruling anything out.

MILLAR: Alright, I know you’re competing with the traffic there. Just one more question if you don’t mind.

GALLAGHER: I am, sorry!

MILLAR: No, that’s okay minister, we can hear it too, you’re coping, we’re getting the message across, I did want to talk to you about the Closing the Gap targets and the fact that only 5 of 19 are on track, and some really critical ones – number of adults incarcerated, suicide rates – the gap is actually widening. How do we break through this?

GALLAGHER: Yeah. Well, this remains a challenge. I mean, I think the message from the Closing the Gap report to me is there is a lot of unfinished work ahead of us. It is pleasing that there are some areas where we are seeing reductions in the gap between First Nations Australians and others. But you know, in those areas as you’ve outlined – incarceration rates, out of home care, suicide rates – we’ve got a lot more work ahead of us. We’ve got Malarndirri McCarthy as the new Indigenous Affairs Minister, I spoke to her yesterday. She is absolutely going to bring all of her efforts into working across the parliament to make sure we’re all on the same page and pulling in the same direction to make sure we close those gaps and close them as soon as we can.

MILLAR: Finance Minister Katy Gallagher, thanks for your time this morning.

GALLAGHER: Thank you very much.