Senator the Hon Katy Gallagher

SUBJECTS: Inflation; Monthly CPI data; Dutton’s cuts; high-speed rail. 

MONIQUE WRIGHT, HOST: Well, in just a few hours, the first all-important inflation figures for 2025 will be released, which will set the scene for the upcoming federal election. Trimmed mean inflation recently fell from 3.5 to 3.1 per cent with Labor hopeful that this time there will be a "2" in front of that figure for the first time in over two years. For their take, let's bring in Finance Minister Katy Gallagher and Shadow Treasurer Angus Taylor. Good morning to you both, good to see you.

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

WRIGHT: Katy, wow, you're in full election mode. It's just around the corner. You must have your fingers crossed for a good result today?

GALLAGHER: Look, it's certainly going to be a busy year this year. We've done the heavy lifting on inflation across the country and it's coming down. It’s had a "2" in front of last year and we're hopeful to continue to see that in these numbers. They do jump around a bit, the monthly inflation numbers, but the trend is continuing to go down, moderating from the "6" it was when we came to government. So, we've seen substantial progress and hope to see that continue.

WRIGHT:Yeah, still sticky though.

GALLAGHER: Well, we're seeing – the trend is that it's coming down and we saw that throughout the last year, and we are hoping for that to continue. Because what that means for people at home is that some of those big price increases they've been seeing are starting to ease and combined with our cost-of-living help – energy bill rebates, cheaper medicines, those types of things – we're trying to give people a hand while these times are really tough.

WRIGHT: Gosh, the perception, though, is that people are really still finding it so tough particularly with the average grocery bill. Angus, we'll bring you in now. It's expected to be much higher this year than in 2024. We're seeing these figures of $213 a week compared to $191, which was the average for last year. Let's talk about that, those supermarket prices and those grocery prices, because that's what we all know. A couple of times a week when we go to the supermarket or the grocery, we're all shocked by it. Angus, is there anything that a government can actually to do specifically intervene and lower our grocery bills?

ANGUS TAYLOR: Well, Monique, good to be with you, and can I say that we’ve seen prices – core inflation – going up in the last data, not down. And it is sticky, as you rightly say, and grocery prices are right at the heart of that. A 12 per cent increase in the cost of groceries since Labor came to power, we’re continuing to see that and we will do – there are things government can do. And we’ve argued for over two years now to put a grocery code in place. What we've seen from Labor is too little too late. But more importantly, beating inflation is the key. And governments can beat inflation. We saw it in the '70s and the '80s. We know what they have to do. What they don’t do, what they shouldn’t do, is record levels of government spending and that’s exactly what we’ve seen under this government. We know that’s driving prices up. And the one thing I can assure you about the data coming out today, prices will keep going up.

WRIGHT: Angus has got a point, hasn’t he, Katy? Every time the government seems to spend here, inflation really isn’t moving enough.

GALLAGHER: I think the translation of what Angus is saying there is complaining about government spending, but he’s not being clear on what they would cut. We are spending and making investments in areas where it helps people with cost-of-living pressures. We see that as our responsibility to help, particularly when inflation has been higher than we would like. And the Coalition of which Angus is a member of have voted against those cost-of-living measures – so, energy bill relief, cheaper medicines, investments in Medicare. These are all designed to help people through these difficult times and what Angus should be clear about when he complains about government spending is exactly what they will cut and what that means for people who might want to use Medicare or who are struggling with their medical bills.

WRIGHT: Angus, what would you cut?

TAYLOR: Yeah, I will respond to that, because we’ve been very clear on this. Over $100 billion of spending we’ve opposed in this term of parliament, including adding 36,000 new Canberra-based public servants, we don’t think that was the right time to be doing that –

GALLAGHER: That is simply not true. No, it is not.

TAYLOR: Well, it is true, Katy, and we learned today – well, let me finish, let me finish – and can I finish – and worse than that, we learned today that you haven’t even included the increase in salaries that you’ve negotiated in the budget. So, look, the truth of the matter is this is a government that has lost control of its spending, record levels of spending under Labor, over $100 billion we’ve opposed – power lines to nowhere that we think are not appropriate at a time like this in an electorate like mine and right across Australia – this is not the time for government to lose control of its spending. Australians are having to manage their spending, so too should the government.

WRIGHT: Alright, I’m going to jump in here because we just want to ask you before we let you go – we’re told this morning that a high-speed rail link connecting Brisbane, Sydney and Melbourne could soon become a plank of Labor’s election campaign. Katy, give it to us straight. Is there a world where I can get on a train in Melbourne and arrive in Brisbane four hours later?

GALLAGHER: Well, we’re doing the work, Mon. There’s a business case that’s been done. It’s currently being assessed by Infrastructure Australia for the first step, which is I think Sydney to Newcastle. And that’s being assessed as we promised. So, we’re going through a thorough process, making sure we’re getting all of those details right. I haven’t seen that business case yet because it’s being assessed by Infrastructure Australia, but we’ve got the High Speed Rail Authority in place, you know, we want to do the work to make sure that this project can get underway and the economics and the business case stack up.

WRIGHT: Alright. Angus, just quickly, would you support it?

TAYLOR: Ha ha, it must be election time, Mon, because this one's coming along again. And all we've seen in the half-a-billion spent so far is a shopfront and a few holes dug, but let's see. We haven’t seen the business case –

WRIGHT: Yeah but it is an election, so would you support it? Because you’re facing the same risk –

GALLAGHER: Yeah, come on. Do you support it, Angus?

TAYLOR: Well, we haven’t – yeah, I know, but we haven’t seen anything. Katy has spent half-a-billion dollars on this thing and so far all we've seen is a shopfront and a few holes. I think we need to see a few details. The Australian people deserve better than that.

GALLAGHER: Like they do on your nuclear power plants, Angus, perhaps. Maybe we’ll see the costings on that.

WRIGHT: Dropped that one, Katy, just as we have to go. 

TAYLOR: You’ve seen them.