Senator the Hon Katy Gallagher

MICHAEL ROWLAND, HOST: Let’s go to the main news of the morning. And the Reserve Bank board, as we know, has kept rates on hold. And the Governor, Michele Bullock, is warning cuts actually aren’t on the table anytime in the near future, with inflation proving still too high. The Finance Minister, Katy Gallagher, joins us now from Sydney. Minister, good morning to you.

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Good morning, Michael.

ROWLAND: As you know, Michele Bullock at that media conference yesterday pretty much said no rate cuts until at least the end of the year. That must be a bitter blow to so many households out there.

GALLAGHER: Well, firstly, Michael, I think the fact that rates remained on hold and have done so for months now is welcome news with all the speculation about, you know, whether rates were going up. Particularly in the previous weeks. So, I think households probably you know had a sigh of relief because we know cost-of-living is a major issue across all households. So, the fact that they remained on hold is welcome. You know, we look carefully at what the Governor is saying. Obviously, the Treasurer works pretty closely, communicates closely with her. So, I think the messages she gave yesterday – the Bank’s assessment on the economy and the job the Government’s got to do – is to make sure that we’re not adding to any pressure and the spending that we’re doing, the measures that we’re doing are putting downward pressure on inflation as it comes down. And it’s moderated significantly. But the last bit to get it back into the target range doesn’t necessarily happen in a straight line.

ROWLAND: Well, on that front, the underlying rate of inflation, which is the one Michele Bullock cited as the rate that will influence their decision, won’t hit the top of that 2-3 per cent target range until the end of 2025. That is a long way away.

GALLAGHER: Yeah and I mean, we’d always expected that it would come back into the target range. Certainly, the Treasury forecasts are tracking along that time. I think what we’ve seen around the world is that that last bit – we see inflation moderate, moderate considerably, but getting it just down that last little bit takes a bit more time. And that’s certainly been the global experience. And again for us, in government, we’ve just got to make sure that the decisions we’re taking are putting downward pressure on inflation but also at the same time – and it is a balance about how we provide you know sensible cost-of-living relief for households, whether it be things like the energy bill rebates or the tax cuts which just help people get through this really difficult time.

ROWLAND: But based on those forecasts provided by the RBA board, are you worried that what the Government’s doing simply isn’t working, with inflation proving so sticky, so stubborn?

GALLAGHER: No, well, the ABS data shows that those measures that we – you know, the investments we’ve made in child care, in energy, in rent assistance, all have taken the edge off inflation. Half a percentage point. So, the data’s very clear on that. But you know, we are a factor in the economy, but the Budget isn’t the only factor and there are some of those other pressures. Whether it be you know, petrol prices or some supply costs and those global impacts that you know continue to have impacts on our economy. So you know, I think inflation’s moderating, the holding of interest rates is welcome, but there’s more work to do.

ROWLAND: But it’s not moderating. The RBA says headline inflation is forecast to jump to 3.7 per cent, way above that target range, by the end of next year.

GALLAGHER: Well, I think when you see what the peak was, it peaked in the December quarter of ’23, it was in the order of – 22-23 it was 7.8 per cent from memory. When we came to government, I think the quarterly inflation was over 6 per cent. So, it has moderated and it continues to moderate but it doesn’t necessarily come down in a straight line. It’s a bit sticky in places and we’ve got to keep focused on it. That is the main job of making sure we get inflation down, but at the same time – and you know this from all your viewers, Michael – cost-of-living and helping households with their budgets is an important job for the Government as well.

ROWLAND: Okay, a couple of other issues before you leave us, Katy Gallagher, what can you tell us about these 4 boats intercepted by Border Force off WA’s coast?

GALLAGHER: Well, it shows that Border Force is doing the job that they need to do up there. You know, we’ve got a massive coastline up there. I think the issue of illegal fishing is attracting the attention of Border Force. And I think it shows that if Border Force are concerned, they will intercept and deal with those fishing boats. So, this is going to be you know an area of pressure. But Border Force is resourced to do the job. We thank them very much for the work they’re doing, it’s difficult and complex work, but they’re doing exactly what we need them to do up there.

ROWLAND: Okay. And also, we had the boss of Universities Australia on the show a short time ago, warning of up to 14,000 job cuts in the tertiary sector if the Government presses ahead with plans to cap international student numbers. What do you say to that claim?

GALLAGHER: Well, I think Minister Clare is working with all the universities. We haven’t finalised our decisions around particular numbers. We’ve got legislation before the parliament. But this is all about getting our university education, particularly international education, on a sustainable footing that’s got integrity at its core across all higher education providers. And we’ll continue to work with the universities, it’s a very important part of our economy, international education, we acknowledge that. And so we want to continue working and talking with the universities as we finalise some of those important decisions.

ROWLAND: Finally, you’re also the Minister for Women. Does it give you a bounce in your step this morning to wake up to news of another female winner of a gold medal? 14-year-old Arisa Trew, fantastic. But also, confirmation that most, the overwhelming majority of gold medals won by Australia have been won by women.

GALLAGHER: Look, I am totally addicted to the Olympics. I look forward to getting some sleep back once they’re finished. They’re doing an amazing job. And look, the amount of women winning gold medals may be something that I’ve raised, you know, in our household discussions. It is noticeable they’ve done an extraordinary job.

ROWLAND: Surely not! Surely not!

GALLAGHER: There’s been some resistance to it, but the facts are clear, Michael. As I drew to their attention. But I just – the skateboarding, I mean what an amazing 14-year-old and the depth of talent across the whole team is extraordinary. I think they’ve given so much pleasure to all of us back home and we can’t wait to welcome them back.

ROWLAND: Yeah, well said. Katy Gallagher, thank you so much for joining us this morning.

GALLAGHER: Thanks, Michael.