Finance Minister Katy Gallagher has rejected claims of tension between Prime Minister Anthony Albanese and Treasurer Jim Chalmers, describing recent reports as 'overblown'.
It follows reports of disagreements between the two regarding spending and the government's overall economic direction.
Speaking to David Speers on ABC's Insiders on Sunday, Gallagher dismissed speculation following Chalmers' comments taking responsibility for government decisions and reports he had been the strongest voice for spending restraint.
Asked whether Chalmers appeared to be the only senior minister taking responsibility for the government's political and economic challenges, Gallagher said she 'didn't take it that way'.
'I think he was simply saying that he takes responsibility for the decisions he makes as Treasurer, just as I make them as Finance Minister, but collectively, and it's not just the ERC, it's the cabinet and the caucus, stand behind the decisions we've made.'
Gallagher said decisions are made collectively and that all ministers share responsibility for government policy.
'These are collective decisions, all of us are part of those decisions, and we all take responsibility for them,' she said.
The Finance Minister also played down claims Chalmers had been clashing internally with Albanese.
Katy Gallagher (pictured) denied that there was tension between Albanese and Chalmers
'I've seen the stories written in the last few days. I think, from my point of view, they're overblown,' she said.
'I work very closely with both the Prime Minister and the Treasurer and I don't think it's unusual that Treasurers and Finance Ministers bring forward a range of options for consideration through our economic updates, our budgets and our mid-year economic update.'
Gallagher said robust debate within government was both expected and healthy, particularly given senior ministers have different responsibilities.
'I think it's a very professional and respectful relationship,' she said of Albanese and Chalmers.
'They've known each other a long time. We've worked in these roles, the three of us, for a number of years now.'
Pressed on whether there was inevitable tension between the Prime Minister and Treasurer, Gallagher acknowledged there were different perspectives within government but denied any personal conflict.
'We've all got slightly different jobs and come at things from slightly different perspectives as you would expect,' she said.
'Robust discussions as part of that through our processes, I think, is actually a good thing.'
The Finance Minister also played down claims Chalmers (pictured) had been clashing internally with Albanese
She said Albanese (pictured) and Chalmers had a 'professional and respectful relationship'
'There is always a contest of ideas and I think that's healthy and good.'
Gallagher also defended Labor's fiscal management, arguing the government had improved the budget position since taking office while still funding essential services.
The Reserve Bank is widely expected to raise rates on Tuesday, which would mark its fifth increase this year, as Labor faces pressure to rein in spending amid stubborn inflation.
'We've improved the bottom line in every budget and every budget update,' she said.
Gallagher acknowledged mounting spending pressures from the NDIS, Medicare, aged care, defence and interest payments on government debt but rejected suggestions the government was ignoring the problem.
'The pressures on the budget are real,' she said.
'They are increasing and we have to deal with them, and we are dealing with them.'
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