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Finance Minister Katy Gallagher hopes Senator Fatima Payman remains in the Labor Party but warns there is frustration over her crossing the floor to vote for a Greens’ motion to recognise Palestinian statehood.

Gallagher said the ball was now in Payman’s court.

“The decision she’s made in the last week have been of her own making. It’s a privilege to serve in the Labor caucus … not many people get the opportunity to do so. You sign up to making decisions together and standing together,” she told Today.

“When somebody doesn’t stand with you, there has to be consequences … the Prime Minister has said until she can commit to … that solidarity that we expect in the Labor caucus, she’ll have to sit outside, but the decision now is over to her.”

Asked if Payman has “ticked” her off, Gallagher said Labor has always been a caucus that relies on each other. “When one of us chooses to step out, there is frustration, there’s no doubt about that,” she said.

Gallagher also said that while Labor’s stage three tax cuts would people during the cost of living crisis, the government remained focused on fighting inflation.

“Those measures have been targeted to put downward pressure on inflation. Particularly, we’ve seen that with how the energy bill relief rolled out last year,” she said.

“Inflation is moderating. It’s peaked, but obviously we’ve got to keep our eye on it and make sure we continue to work away at it. We are seeing welcomed progress. We would like it to come down lower. These measures are helping people in the meantime.”