Senator the Hon Katy Gallagher

NATALIE BARR, HOST: Let’s bring in Finance Minister Katy Gallagher and Shadow Finance Minister Jane Hume. Morning to both of you. Katy, this is a big test for your new Immigration Minister of course, Tony Burke, just less than two weeks into the job, isn’t it?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Well, I think it shows that Border Force are doing the job we asked them to do. That the resourcing going into Operation Sovereign Borders is working. This is exactly what we want to happen if there are illegal fishing boats in the north of the country, in our waters, then we will intercept them and Border Force will deal with them.

BARR: Jane, how concerned are you?

JANE HUME: Well, Border Force didn’t intercept these boats. In fact, they were discovered by locals. In fact, the aerial surveillance by Border Force has decreased about 22 per cent in the last two years alone. That was under Andrew Giles’ watch. You’re right, Tony Burke now has a very big job on his hands. If his record as the previous Immigration Minister is anything to go by, though, the last time he was Immigration Minister, he let in 83 boats in 80 days. So, I’m hoping something’s got to change here.

BARR: Katy, there is conjecture on whether the Border Force patrols have been reduced. Is that the case?

GALLAGHER: Well, we’re putting record amounts of resourcing in. We take direction from Border Force about what they need and how much resourcing – and I know that, that’s my job as Finance Minister, to make sure they get the money they need. And they have certainly been resourced with everything they have sought. I mean, it is a hard job. I mean, we’ve got a massive coastline and so we do rely on Border Force and other contacts to make sure that we are dealing with anything coming our way. But the overall message of this is if you are doing this, if you are illegal fishing in our waters and Border Force are concerned, they will deal with you. And that’s the important message. And I think some of the Opposition rhetoric around this is just simply – the way it’ll work, the way I’ll translate, is it’s encouraging some of this activity from perhaps Indonesia and it’s very irresponsible and they should stop doing it.

BARR: Okay, moving on to something that affects both of your portfolios, the Reserve Bank has opted to keep interest rates on hold at the latest meeting. But Governor Michele Bullock did also signal that stronger government spending, a resilient labour market and a rise in household consumption fuelled by stage 3 tax cuts were all factors behind new figures that show inflation will take longer to reach its target. Katy, we are still waiting for the impact of the government’s spending to hit the market, aren’t we? Because the stage 3 tax cuts, the power rebates, probably haven’t filtered through have they? Are you worried about what’s to come?

GALLAGHER: Well, we’ve been very careful. First of all, I think the decision yesterday was welcomed by households around Australia. You know, we know that they’re under a lot of pressure. Cost-of-living pressures are the number one issue for every household. So, I think that’s the first point. The second point is, I think we’ve seen around the world that inflation doesn’t come down in a straight line, but we have made welcome progress. I mean, it has significantly moderated, so we’re on the right track. And I think in relation to some of those measures you talk about, the tax cuts, energy bill relief – I think it matters about the timing and composition. So, it all doesn’t come at once, for example. You know, you’re getting a bit more in your pay packet every fortnight and the way that we’ve targeted the energy bill rebates is that it happens throughout the year on those quarter bills. So, we have looked at this carefully. And I think the ABS has shown our measures are putting downward pressure on inflation and we’re running surplus budgets. The last two budgets have been in surplus and the Governor has said herself that that is helping with monetary policy.

BARR: So Jane, you’re not worried about the government’s spending on the energy rebates and the stage 3 tax cuts?

HUME: Well, certainly we are. In fact, the Coalition have been saying for some time that unless the government gets its fiscal policy, gets its budget in order to work with the RBA rather than against the RBA, well then the RBA’s job is that much harder. They have to keep raising interest rates. We heard yesterday from Michele Bullock that in fact, any chance or prospect of an interest rate cut has been pushed out again, yet another six months. That’s gonna be cold comfort to anybody with a mortgage. Moreover, yesterday they were considering raising interest rates, not lowering them. And it’s government spending, that’s public spending, that is in fact keeping inflation higher for longer. Every credible economist has been saying the same, so has the Coalition. It only seems to be the government that’s not listening to that warning.

BARR: Okay, well that’s all we’ve got time for today. Thank you very much. We’ll see you next week.