Senator the Hon Katy Gallagher

EMMA REBELLATO, HOST: Well with the big four banks tipping interest rates to rise today, Finance Minister Katy Gallagher joins us now. Minister, thanks for joining us this morning.

KATY GALLAGHER, MINISTER FOR FINANCE: Good morning.

REBELLATO: Now I know you don't want to pre-empt anything that the RBA does, but I think Australian borrowers in particular, they just want to know how bad is it going to get?

GALLAGHER: Well Emma, you're right. We don't pre-empt the independent reserve bank decisions that will be made later today but we understand there's a lot of interest and you know if there is another interest rate increase it will hit households hard. That's why the Government's focus will always be on how do we help with cost of living, and how do we finalise and put those finishing touches on the budget that will be handed down in May.

REBELLATO: So, will there be more targeted help if interest rates do go up? Because we're also looking at possibly going up in May as well.

GALLAGHER: Yeah, look the government will always make those budget decisions based on the economic circumstances of the time. Obviously, there's a fair bit of uncertainty and volatility particularly in the global economy based on some of the events in the Middle East, the conflict in the Middle East, so that presents some challenges but we will always make those decisions on what we need to do for the current situation.

REBELLATO : We've seen just yesterday the South Australian government and the NSW Government both held fuel security roundtables. What does that say about how the Federal government is handling this?

GALLAGHER: Well, in a very coordinated way. So, we are engaging with the states and territories. I think the Federal Minister Bowen attended those roundtables where he was invited. We are meeting as a Federal government every day. We've got the National Coordination Mechanism in place that's coordinating effort across industry, states and territories and the Federal government agencies and we will continue to do so as we work through the domestic impacts of what we've seen happen in the Middle East and the escalation of the conflict in the Middle East. Every lever that we've got available is being utilised and we will continue to do that as the conflict continues.

REBELLATO : If it does continue, what else can the government do?

GALLAGHER: Well I mean it's our responsibility to have a think through all the various contingencies and options that need to be worked through and make sure that we are ready to respond to those. I mean, part of it is responding daily to the situation we face here. But of course, as you would expect and as your viewers would expect, appropriate planning and thinking about what we need to do and how we need to respond if this conflict continues and continues longer than any of us would like. I mean, obviously we would like it to end as soon as possible, but if that isn't the case, we need to make sure we're ready to respond. And we will be.

REBELLATO A: Minister, this week, News Breakfast is taking a close look at intergenerational inequality. What changes is the Government looking at doing in the May budget to address this?

GALLAGHER: Well, I think the Treasurer has been on this show and talked about that as well. I mean, this is one of the areas we are thinking about in terms of some of the decisions we've taken. The budget will have a focus on savings, it will have a focus on productivity measures. We're also considering issues around tax reform and some of those, in fact, all of those have an intergenerational equity kind of element to them and they're all interconnected in a way. So, yeah, we are thinking about that carefully as we think work through the last couple of months of decision making.

REBELLATO: So, can we expect changes to Capital Gains Tax and negative gearing in the budget?

GALLAGHER: Well, both of those are areas which are continuously raised with the Government around particularly access to housing. Housing is one of our key priority areas. We've done a lot of work to date, but we still get that housing is unaffordable for many young people. Thinking through what levers are available to Government in responding to that is part of our considerations. And we will take those decisions over the next couple of months.

REBELLATO : Minister, just taking a look at broader tax decisions as well, going back to the Middle East war and fuel as well. We did speak to the Treasurer last week talking about the fuel excise, but as this continues, is the Government going to get to a point where it's going to have to reconsider whether to make changes to the fuel excise and make cuts?

GALLAGHER: Well, our focus at the moment is on making sure that we have adequate supplies of fuel based on the impacts of the conflict. So, our focus is on making sure we have enough diesel, petrol and making sure that it gets to the places it needs to get. We've seen some localised disruption in the last week, we've taken some decisions about that, but that absolutely is our main focus right now. Making sure we have enough fuel and that it's getting to people where and when they need it.

REBELLATO : Finance Minister Katy Gallagher, thanks for your time this morning.

GALLAGHER: Thank you.