Senator the Hon Katy Gallagher

KARL STEFANOVIC, HOST: Well, millions of homeowners are hoping for a rate cut today with economists predicting the Reserve Bank will deliver relief. Let's bring in Finance Minister Katy Gallagher live from Canberra. Katy, good morning to you. Nice to see you this morning. Do you feel left out with the PM hobnobbing over there with the Pope and such things while you're nose to the grindstone?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Not at all, Karl. Not at all.

STEFANOVIC: Someone's got to do it.

GALLAGHER: Yeah, that's right. No, very happy to be doing my job back here.

STEFANOVIC: Alright, you'll be filthy if rates don't go down, right?

GALLAGHER: Well, you've heard us say this before, but it is a matter for the Reserve Bank. I know that all the markets are pricing in a cut today, and I imagine there are a lot of homeowners all around Australia waiting on that decision at 2:30 this afternoon. I mean, the thing for us is our job has been to try and make sure that we dealt with the inflation challenge. We've made such good progress on that in the last two years or so and we've got inflation back down, and that really, I think, is what the Reserve Bank will be looking at when they make their decision today.

STEFANOVIC: You might be able to get a mortgage, but building one of these 1.2 million houses is never going to happen and we've got a productivity crisis in the housing sector now. There's a lot of work to do there.

GALLAGHER: Yeah, a huge amount of work to do there. I mean, it's taken a long time to get to this point, a couple of decades of not building enough house. But the issues now are we've got to work with the states and territories and local government on planning reforms and getting that land ready to build houses, but also making sure we've got the workforce that can do it. So that's bringing in workers, but also making sure that we are training people, enough people, to do that work as well. So, we've got plans underway and we'll just get cracking on it.

STEFANOVIC: Have you got a count for us on how many you've built so far?

GALLAGHER: Look, I don't have that number here right now off the top of my head. I should probably have it, but we are making solid progress and there'll be more delivered this term. I mean, even if you look at the Housing Australia Future Fund, there's about 28,000 houses under construction or in the final stages of planning. And so that will start to make a real difference.

STEFANOVIC: Are you getting rid of energy rebates?

GALLAGHER: Well, we've extended them, as you know, Karl.

STEFANOVIC: Eventually?

GALLAGHER: Yeah, well we'll look at them. Each budget we make these decisions, we've needed to provide cost of living relief. But in that sense, it's not an ongoing payment, which is why we've extended it for six months. But we always look at how we can help people with cost-of-living pressures every budget.

STEFANOVIC: The PM seems to be trying to drive Australia towards some kind of EU deal, which is going to take months to get together. But we have to be incredibly careful here, do we not? I would've thought we still need the US for security and there's talk about German warships being acquired, but no German warship or anything from Europe is going to get here very quickly.

GALLAGHER: Well, obviously America remains our key ally, both in economic senses and also in defence.

STEFANOVIC: That's the delicate balance, right?

GALLAGHER: Well, I mean I think the approach we've taken over the last three years is to build up our international relationships and to make sure they're strong, not only with our allies, but with other people, particularly countries in the region and around the world. And I think you've seen the PM and the Foreign Minister doing a lot of work in that respect and that will continue. I mean, it's in Australia's interest to have good international relationships with as many countries as possible.

STEFANOVIC: Katy, good to talk to you as always. Appreciate it.

GALLAGHER: Thanks so much.