Senator the Hon Katy Gallagher

CHARLES CROUCHER, HOST: Well Aussie families are still feeling the pain in their hip pocket despite an $18 billion improvement to the Budget in just five months. Finance Minister Katy Gallagher joins us now from Canberra. Minister, good morning to you. We’ve got deficits for the next ten years. Today is certainly an improvement, an improvement on what was projected, but there's an awful lot of debt to come and an awful lot of interest. What can be done to turn it around?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: Good morning, Charles, thanks for having me on. Well, we'll continue to do what we've been doing over the last three years, which has seen the biggest turnaround in the performance of the budget, and we'll continue to do that. So, we've delivered two surpluses. As you say, the Final Budget Outcome shows that the deficit is much lower than was forecast when we came to government, and even much lower than it was when we – when the election was called. So, this is good news. We're lowering debt, we're paying down that debt, we are making sure the Budget's in better shape. And that's because we know there's lots and lots of pressures coming for the Budget, and we need to manage that Budget responsibly and this result is good news in those terms.

CROUCHER: What does that mean for people at home, though? They see that the federal Budget's in a better shape, there's some tax cuts coming, but how does that translate to helping them out around their table?

GALLAGHER: Well, it means the Budget's in a better position so that we are able to invest in all of those programs that matter to people. So, like our Medicare, you know, increasing bulk billing, this has a direct impact on cost of living, but having the Budget in better shape so that's able to make those investments makes a real difference. Same with aged care, same with disability care, it allows us to invest in the defence capability we need to protect our country. All of those things matter, and that's why we make sure that responsible economic management has been at the heart of the Albanese Government.

CROUCHER: Outside of Canberra, the RBA is preparing to hold rates steady, it seems, for at least another month, as they meet today with an announcement tomorrow. What's your expectations? Not for tomorrow's meeting, I don't want you to verbal the RBA. But for the next few months, which direction is the economy heading in, and what do you think the next move would be?

GALLAGHER: Well, Charles, you've kind of got ahead of me in the sense that we don't pre-empt or, you know, really try to speculate on the decisions of the Reserve Bank. Our job is very clear. It's to make sure that we are managing the inflation problem that we've had for the last three years. We've been doing that part of the budget story, and the improvement in the Budget directly relates to that. So, we have specific responsibilities. Ours is to manage the budget, to look at the opportunities that are coming our way, to drive productivity, to make sure people are in jobs and getting good pay. They're all the things that matter to people every day, but they also matter to the broader economy, and they're the things we're focused on.

CROUCHER: Again, I don't want to verbal it, but the Treasurer is happy to celebrate when rates are cut, as are most people with mortgages and around the community. What's a realistic expectation for the next six months? Do you think there is another cut, another two, still in the cards?

GALLAGHER: Well, I think I go back to where to what the Governor says there. Again, I don't, I don't want to speculate. It's not our job, it's the Reserve Bank's job to set interest rates in this country. They're independent, and they make their decisions based on the latest economic data. Our job is to focus on the things that we can control. That is managing the Budget properly, looking at how we drive productivity. How do we see some of the opportunities that come for economic growth, including in the climate transition. They're all the things that we'll manage and obviously making sure that we're dealing with some of those cost-of-living pressures that households have been experiencing and continue to experience. That's our job.

CROUCHER: On those cost-of-living pressures, Europe's Trade Commissioner will visit Canberra next month. It's been on-again off-again, this potential Free Trade Agreement with the EU. What would that do to make things cheaper for people watching on at home?

GALLAGHER: Well, I think we're a trading nation, so where we can strike fair and reasonable agreements with other countries, it's often in our national interest to do so. And the EU, it has been a prolonged and at times difficult set of negotiations. And that means, certainly from our point of view, we're standing up for Australian industry, Australian farmers, to make sure that when we sign a deal it is the best deal. But there has been progress made. And again, you know, Australians benefit, the Australian economy benefits when we have good trading agreements in place. And we've looked and, you know, we've had a very successful run of negotiating these and making sure that the opportunities for Australian businesses are there and are being promoted across the world. And the EU is a real opportunity to further that.

CROUCHER: Well, we'll celebrate anything that helps Australian businesses and anything that brings prices down. So, it's a good combo. Katy, great to speak to you this morning.

GALLAGHER: Thanks Charles.