Senator the Hon Katy Gallagher

BRIDGET BRENNAN, HOST: Well, Finance Minister Katy Gallagher joins us now from Sydney. Good morning to you.

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

BRENNAN: Let's talk about, just firstly, the conflict in the Middle East and the many Australians who are feeling anxious at this time, being based over there and have signalled their intention to come home. It looks as though there have been some Australians arriving back home overnight. Could you just give us an update on where that mission is at?

GALLAGHER: So, we are providing further assisted travel. So, as you know, we've had defence assets in the region ready to go for when airspace opens up. We've had about 4,000 Australians register in both Iran and Israel, who have registered, but also indicated that they would like to come home. And so, those flights have helped with that. But as airspace opens and more commercial options are available, we would expect to see more Australians coming home through those options as well.

BRENNAN: It sounds like it's quite a delicate operation in terms of reaching people who want to leave Iran, though. What's the advice currently for those Australians?

GALLAGHER: Yes, look, that is obviously the most difficult country to return home from. We have DFAT staff assisting on the border of Azerbaijan and they will continue to be there. But I haven't been advised of any further changes to, essentially, how people are able to get out of Iran. It is difficult. We are hoping that if the ceasefire holds, we would be able to see further options available to people because obviously they are the ones that are really wanting to return home and as soon as possible.

BRENNAN: Just turning to the NATO summit in the Hague, NATO aligned nations, some of those nations have agreed to lift defence spending. Does this put additional pressure on Australia to look at our levels of defence spending and security arrangements?

GALLAGHER: Well, it's been great to have the DPM over there and engaging with countries. It's been an important meeting at an important time. I think though, your point here, is we have been increasing defence spending. When we came to government, it wasn't what it should have been and more importantly, it wasn't delivering the capability that we needed. There had been a lot of press releases, but not a lot of equipment or capability delivered. And so, Pat Conroy and the DPM, Richard Marles, have been trying to turn that ship around and we have put billions of dollars into defence. We understand the environment we are working in. We take the advice of our agencies seriously. When they come to us and say, this is the capability we need and this is the funding that's required, we have provided that funding and that's the approach that we will continue to take. It's in Australia's interest, it's what is the capability needed, and then the funding decisions are taken.

BRENNAN: As global conditions become more uncertain and more volatile, if we were asked to lift defence spending, if we felt that that was prudent, what other portfolios or social programs might have to be cut? I mean, how difficult a decision would that be if it came to it that we did decide to lift our defence spending here in Australia?

GALLAGHER: Sure, I mean, these are the balancing decisions that governments have to take, but I would again say that in the last three years we've put $11 billion across the forward estimates and $57 billion into defence over the medium term. And we've been able to do that at a time we have been putting increases into health and other important social programs. So, it is a balancing act, but the government's job is to make sure that all areas of government are funded properly, including defence, but then all of the other programs that Australians deserve and rely upon and that continues. It's on my desk every day, really, those choices and we will continue to make them in the best interests of Australia. That's the PM's view and that's what we take to defence funding, but we also take it to all those other important areas.

BRENNAN: Some positive news on inflation, which will be good news to so many Australian households. Half of Australia's banks say they're expecting another interest rate cut. But given all this global uncertainty, are you a little bit nervous at times, Katy Gallagher? Do you have to temper expectations for all of those households there waiting for an additional cut that may not come?

GALLAGHER: I think I'm permanently anxious about everything, Bridget. But look, on the inflation front, welcome news. It's got inflation, both headline and underlying, in the bottom half of the band for the first time in four years. And the important thing I think, is that not only has that been able to be delivered and achieved by Australians, we've also kept unemployment at really at historic lows at 4.1 per cent and that's, I think, a pretty remarkable result for Australia. And one we should all be really thankful for. The Bank makes its own decisions, obviously they will be looking at global uncertainty and some of the impacts of the Middle East conflict when they make their decisions. But the government's job to make sure we are doing what we can to reduce inflation, I think those results are very welcome.

BRENNAN: Turning to another issue, the ABC spent upwards of $1 million on a Federal Court case regarding the unlawful termination of journalist Antoinette Lattouf. Does it concern you that such a large amount of public funding was spent on this case?

GALLAGHER: Look, I mean these are really matters for the independent ABC. We don't try and get involved. We don't micromanage that organisation. They make these decisions. I think from someone who's watched this case unfold over the last few months, I think it's good for Antoinette in particular that the matter's been concluded. But these are decisions the employer has made around employment relations and it's a matter for the ABC board, which I'm sure – or ABC management and board – and I'm sure that they will continue to work through it.

BRENNAN: Alright, Katy Gallagher, thanks very much for your time on the program this morning.

GALLAGHER: Thanks for having me on, Bridget.