Senator the Hon Katy Gallagher

SARAH ABO, HOST: We are joined this morning by Finance Minister Katy Gallagher in Parliament House. Thanks so much for your time this morning, Minister. So, economists are hoping for a hold, they're tipping a hold today when the RBA meets. Do you think that'll be enough to give some reprieve to homeowners out there?

KATY GALLAGHER, MINSTER FOR FINANCE: Well, we don't get into speculating on the decisions the Reserve Bank takes, but I know a lot of homeowners and mortgage holders will be watching this decision closely, I mean, our job is to make sure we're doing what we can to help people with cost of living, while inflation remains a bit higher than we'd like, and while we have some of the global uncertainty and the global impacts we've been seeing from the war in the Middle East, and we remain focused on that. You know, how can we help households through this time?

ABO: There has been a big focus, of course, on the housing sector, clearance rates, house prices are plummeting in some cities. Was that one of the objectives that you had expected when you made your changes to negative gearing and capital gains tax?

GALLAGHER: Well, really, the changes are motivated by the fact that it was very clear that first home buyers, in particular, were being locked out of owning their own home. We wanted to change that. We didn't think the system was working. We've done a lot on supply and making sure we're building more houses, but there remained this issue when the housing system interacted with the tax system, and so the treasury modelling showed that house prices would continue to grow a little bit slower than that than if we weren't making these changes, but early days, and we are seeing some improvements in first home buyers being able to purchase a home, particularly at auction, and we'll keep monitoring that, obviously, as these changes work through.

ABO: So, is it a good thing that house prices are dropping?

GALLAGHER: Well, the treasury modelling, which we took our decision on, was that house prices would continue to grow a little bit slower, about 2% slower than otherwise expected, and this is really an acknowledgement that the housing system wasn't working for everyone and was locking people out, and we didn't want that to continue for an entire generation of younger Australians who couldn't buy their own home, and so we are changing a system that we believe was broken, and we know that there are those that want it to remain the same, but we don't think that was delivering the right outcome for people,

ABO: But I think there's a bit of confusion about what outcome you actually want, right, because your housing tsar has told parliament that tax changes are actually not about increasing supply, they're actually about redistributing wealth, which is basically the exact same thing that your Treasury secretary said, the PM is parading around these new house builds at the moment. It's all, it's all very misleading.

GALLAGHER: Well, we don't think it is misleading. I mean, we've got a focus…

ABO: Is it aboutredistributing wealth or making houses, more supply. Well, which one is it?

GALLAGHER: Well, the Budget shows that when these changes go through, and we've got to get them through the Senate, that about 75,000 more first home buyers will get into owning their own home, but you've got to see it in conjunction with the work we are doing on supply. On its own you know that I guess we're saying there has to be a number of interventions to make sure the housing system is working for everybody and making the tax system work a bit fairer across the board, and so that is the aim of the tax reform package that we've brought through, because we don't believe the system is working for everybody, and we think these changes are sensible.

ABO: Again, that's an issue on messaging, isn't it, which is probably what's being reflected in the polls. I mean, you guys are under the pump, and the Prime Minister is dismissing Pauline Hanson as what he calls a grievance politician. She has now overtaken him as preferred PM. Is it wise to undermine her like this?

GALLAGHER: Well, the polls will come and go, and you know, in political combat or, you know, political discussion, you're always going to look at and see what's happening across the political spectrum, but our job remains the same, which is we get that people are under the pump, we get that there's a lot of uncertainty in the world, that there's cost of living pressures, and so the job for the government is to remain focused on how we meet the needs of the Australian people, whether it be through tax reform, whether it be through tax cuts, whether it be through housing, and whether it be through Medicare.

ABO: You don't see these polls as a reflection of people not accepting your changes.

GALLAGHER: Well, I see it as a reflection. I leave commentators to commentate on the polls, but I get from my interactions with people that people feel like they're under the pump. There's a lot of uncertainty and a lot of worry about what's happening in the world, and we have to not only deal with that, but we have to make sure that we're trying to provide the solutions people need for those problems, and that's what this Budget tries to do, and in fact, it's what all the decisions we take are focused on. How do we deal with people and their pressures they're living under, and how do we make sensible changes for the future of the country, and we know there's a lot of political opposition to that, including from One Nation and from the conservative side of politics, but we can't be distracted by that. We've got to remain focused on delivering for the Australian people.

ABO: Alright, just finally, while we have you, Minister, the long-awaited peace deal between the US and Iran seems closer now than it has in the past. This backlog of oil in the Strait of Hormuz. You hopeful that it'll start to trickle through now, things will improve?

GALLAGHER: Yes, I mean, we've been arguing for and supporting ceasefire, really, for months now. The global impacts of this are being felt here in Australia, including most particularly at the petrol pump. You know, we need to see the detail, obviously, of what has been agreed, but I think any move towards a ceasefire and resolution of the conflict is going to be welcome around the world, but here in Australia as well.

ABO: All right, Katy Gallagher, thanks for joining us this morning.

GALLAGHER:Thanks so much.