Senator the Hon Katy Gallagher

KARL STEFANOVIC, HOST: Well, for more, we're joined by a Minister for Finance, Katy Gallagher, in Sydney, who I think for the first time was hearing that. Katy, good morning to you. Is he Australia's daddy too?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Ah, yes look, I hadn't caught up with that, Karl, but just listening to it then, look, I think President Trump engages in unique ways in international forums, and I think we've seen that over the last few days. But Australia always stands on its own feet. We make decisions in our national interests on our own.

SARAH ABO, HOST: He sure does, as you put it, talk in unusual ways, Katy, but he's effective.

GALLAGHER: Well, the US President is an important leader of global discussions. There's no doubt about that. And he performs that role, he attends these meetings, it's obvious that people will be wanting to know what he thinks and listen to what he has to say. But ultimately, all of those countries are sovereign nations and they make decisions in their own right.

STEFANOVIC: I noticed yesterday, we almost lost it amongst all the daddy Trump stuff, but inflation looks like it's under control, but Trump not so much.

GALLAGHER: Well, we are pleased with the inflation figures, Karl, as you say, showing that both underlying and headline inflation are back into the lower part of the band. That's really important in terms of people's cost-of-living, but also the fact that this has been able to be achieved whilst unemployment remains historically low at 4.1 per cent. That is a wonderful outcome because it means we haven't sacrificed jobs in order to get inflation back into band. But yeah, it's a good result. We are pleased with it. Obviously, more to do. There's always more to do. And on 1 July, we'll have a number of new measures that help families and others continue with those cost-of-living pressures that remain real for many households.

ABO: Well, hopefully the Reserve Bank takes it on board too and does deliver that interest rate cut that we all want. But it is interesting when we're looking at defence spending at the moment, Katy, as well. I mean NATO has now rolled over on that five per cent of GDP. You say there's sovereign nations, but this was after pressure from Donald Trump. Ours is currently two, 2.5 per cent. Are we likely to increase ours to match?

GALLAGHER: Well, I think if we look at the decisions we've taken since we came to government, it was around two per cent. We've made I think a $57 billion commitment across the medium term, $11 billion across the forward estimates. And that'll bring us up to about 2.37 per cent, I think, by the time all of that funding goes through. But the point the PM's been making and others have been making is that we make these decisions based on advice to government. Defence and others come to us. They say what capability they need, what the funding will be, and we provide that funding. So, I have no doubt we'll have more representations over future budget cycles about what Defence needs, but we also need to make sure we've got the capability to deliver. And that was a problem under the former government as well. Lots of media releases, but not a lot delivered, and we need to make sure our capability matches the investment that we're providing.

STEFANOVIC: But Donald Trump has asked for more and we're nowhere near that five per cent. And it's at a time when we need to be transactional with him as well. He's looking for something like that for us to give him something if we want to do something about tariffs, and what are you going to take to him?

GALLAGHER: Well, obviously we continue to engage with the administration at every level. The Treasurer spoke with his counterpart yesterday and put Australia's case very firmly to them again, and we'll continue to do that. But I think our record demonstrates that in the three years that we've had in government, we have significantly increased funding for defence. I have no doubt that because of the environment that we are in, the strategic environment that we are in, that there will be further investments in defence. I have no doubt about that. We'll have to continue to consider those. But the point I'm saying is it's not only about money. It's actually about delivering what that investment is meant for. And that's been an issue that we have to continue to focus on.

ABO: Well, it's also about relationships, isn't it? At the moment, it seems as though Australia's relationship with the US, is it some kind of stalemate? I mean, when we are reading in the papers this morning that the PNG leader might meet with Trump before Anthony Albanese does, that is not a good look, Katy.

GALLAGHER: Well, I think our relationship with the US is very strong. I don't think it is as you describe it. And the PM has had a number of discussions with President Trump. It's a very good relationship there. We've got good engagement at ministerial level through Defence, Foreign Affairs, and the Treasury and Trade particularly, they would be our lead ministers. And that continues. It's an important relationship. It's one we value and it's one we will continue to invest in.

STEFANOVIC: Okay. One third of all Liberal seats are women compared to more than 50 per cent in the Labor Party. Do you think, Sussan Ley spoke yesterday, about all of this and she said about her own experience with coercive control and her plans to tackle it. It seems like a unique opportunity, don't you think, for bipartisan support? Will you give it that look?

GALLAGHER: Absolutely. We've always, and I think historically this has been an area where there's been a lot of bipartisan support and a lot of working together. I mean, everyone acknowledges that violence against women is a whole of community issue, and we need the whole of community working together to solve it. So, I welcome those remarks from the Leader of the Opposition yesterday, and I certainly commit to working with her and her team on everything that needs to be done in that area. This is not something a government can solve, but it's something that we can all work together on and over time make a difference in the lives of millions of Australian women.

ABO: Hear, hear. I think everyone will be on the same page when it comes to that, that's for sure. Katy Gallagher, thanks so much for joining us this morning. Appreciate it.

STEFANOVIC: Thanks, Katy.