Senator the Hon Katy Gallagher

NATALIE BARR, HOST: For more, let’s cross live to Parliament House with the Finance Minister, Katy Gallagher. Morning to you. Commonwealth, NAB and ANZ have all cut rates on their term deposits. Is this a bit of a cash grab from the big banks, do you think?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Well – morning, thanks for having me on – look, I think the big banks have to be accountable for the decisions they’re taking. That’s why coming before parliamentary committees are really important, and you know these are the sorts of things that often frustrate people, is you know that term deposit interest rates are the last to increase and they’re the first to decrease. So, I think that’s up to the banks to explain what they’re doing and why they’re doing it and be accountable for those decisions.

BARR: So if they talk a lot at this committee, then what happens? Can you sort of do something about it?

GALLAGHER: Well, I think it’s really the – you know, the benefit of the committee, yes, you can. I mean, if a committee comes up with a particular recommendation about changing the legislation or having some other recommendation, sure. That’s what those committees can do. But also I think it’s just as important if not more important that the public scrutiny that comes on those hearings and questions like yours, Nat, about what they’re doing and why they’re doing it. And you know these bank CEOs, they’re paid a lot of money, we need a good, high-functioning, high-quality banking system in Australia, that’s essential for our economy. But those people also need to be accountable for the decisions they’re making and explain why.

BARR: Okay, interest rates and inflation, those are words on everyone’s lips, the inflation figure’s out this morning, what are you expecting?

GALLAGHER: Well, these are the monthly figures, Nat. So, they tend to jump around a little bit. But we are hoping that we would continue to see continued moderation in inflation. That’s what we’ve been seeing over the past year or so. We want to see more of that because obviously that translates into easing pressure on people’s household budgets. So, yeah, we’ll see what the monthly figures are but the trend is certainly one of moderation and you know our job is to continue to roll out that cost-of-living help for people to make sure we get them through this time.

BARR: So, the RBA’s saying it’s going to look through those power rebates. That’s not their main focus and that’s only sort of artificially propping up the help. Are you sort of concerned that we won’t see an interest rate cut until next year, maybe after the election?

GALLAGHER: Well, those matters are for the Reserve Bank. We try not to weigh in on them. They’re independent, they make those decisions. But our job and you know the measures that we put in place – you talk about energy rebates, our child care investments, our support for rent assistance – all of the data shows that’s putting downward pressure on inflation, so that’s helping, not increasing the pressure on inflation. And that’s important. We’ve got to work with the Bank, not against it, and that’s why all of our decisions have been focused not only on helping households but also making sure that we’re not adding pressure to the inflation challenge.

BARR: Okay. Katy Gallagher, thank you for your time.

GALLAGHER: Thanks for having me on, Nat.