Senator the Hon Katy Gallagher

KARL STEFANOVIC, HOST:Well, inflation has tumbled to 2.8 per cent, the lowest rate we’ve seen since 2021. Yet Aussies still feel the crunch and the RBA holding back from slashing interest rates. Let’s bring in Minister for Finance, Katy Gallagher, in Melbourne. Katy, good morning to you. Happy Halloween. You going as the RBA today?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE:Well, thankfully my children are a bit too old for Halloween, so I’ve just got the lollies ready for the trick-and-treaters. But nice to be with you, Karl.

STEFANOVIC: Alright, let’s talk about the lollies. Underlying inflation is still an awful long way from home, right?

GALLAGHER:Well, we’re seeing it continue to moderate, Karl. And we’re seeing both headline and underlying inflation continue to drop, certainly from what we inherited when we came to government. That’s really welcome, obviously. That’s been a big challenge for us. And it’ll make a difference to people. We need to get that back into the band and headline is back in the band now. More work to do and we’re not pretending that this isn’t – people are not going to continue to feel some of those cost-of-living pressures and we’ve got to continue working on that.

STEFANOVIC: Part of the problem is, and I guess it’s a relief for homeowners, but energy subsidies from you and the state governments are only a band-aid on consumer costs, you can’t fudge it with the Reserve Bank.

GALLAGHER:Well again, we’ve certainly made decisions that have helped get inflation down, that’s both energy bill rebates and rent assistance. But we don’t apologise for making people’s energy bills cheaper, we know that that’s been a big hip-pocket concern and that’s part of our decision, not just dealing with inflation but actually making a difference around the kitchen table. But underlying inflation is coming down as well, Karl, and that removes some of those more volatile items.

STEFANOVIC: Okay, just on that. Rent, insurance, childcare – particularly insurance – are among the really sticky inflation areas. When do you think you’ll have inflation below the RBA’s key marker?

GALLAGHER:Well, we’ll update our forecasts in MYEFO. So, that’ll give people the next Treasury forecast, and I know the RBA do the same thing. But again, Karl, these are the lowest inflation numbers we’ve seen in 4 years. I mean, this has really been some really good results yesterday and I think for anyone who cares about cost-of-living, seeing these numbers continue to track down is really, really welcome. I get that there’s more to do and you know, particularly with homeowners feeling those interest rate increases, but we are making very good progress. And the other thing, Karl, is we haven’t seen a negative quarter of growth, we’ve seen a million jobs created, we’ve seen wages growing – all of these things. It’s really actually a very strong story even though people are continuing to feel that pinch.

STEFANOVIC: The long and short of it is, despite what you’re saying, that narrative, the RBA will not budge. We’re hearing this morning it could be May until we find some reduction in interest rates. That makes an election harder for you.

GALLAGHER:Well, those matters are for the Bank, Karl. We’ve had this discussion before. Our job is to do what we can to get inflation down, get the Budget in better shape, run surplus budgets, we’ve got two of them under our belt now, that’s the decisions the government can take and roll out the cost-of-living relief – so, tax cuts, energy bill rebates. We’ve been doing that. The Bank needs to make its decision but seeing these numbers continue to track down is heading in the right direction.

STEFANOVIC: Alright. Before you go – eureka, the PM says he didn’t ring Alan Joyce for an upgrade specifically. Not sure why it took him five days to say that, but he didn’t say he didn’t ring someone else at Qantas though. Why is he kind of like Slim Shady on this issue?

GALLAGHER: Well, he’s not Slim Shady at all, Karl. He’s declared all of these flights. I mean, they are the rules. He’s abided by the rules. This guy, I work with him very closely. I know how fastidious he is about these. The reason we’re talking about them is because they’re declared. They’re declared on the register. You’ve got to abide by the rules and if you don’t, you’ve got questions to answer.

STEFANOVIC: Did he solicit from anyone else at Qantas for an upgrade?

GALLAGHER: The answer the PM has given – and he’s answered a lot of questions on this, Karl. The answer is, any changes to bookings, where they’re made – and these are matters over two decades ago or within the last 20 years – were made in the normal way, as every other MP would.

STEFANOVIC: Alright. I think he’s talking on 2GB very soon, so we’ll hear from him. Katy, good to talk to you, thank you.