Jim Chalmers’ Next Budget: Will it be Good for You Too?

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Last time around he was standing on the bow of the ship of state and warning of storm clouds and choppy waters ahead in the global economic environment.

Now Treasurer Jim Chalmers is back and borrowing his metaphors from seismology – one month before a budget shaped by a government that seems to be responding once again to the threat of uncertainty.

“Recent tremors in global financial markets have increased uncertainty and downside risks, and the IMF is now forecasting the weakest five-year period for global growth in more than three decades,” Dr Chalmers said.

“In this uncertain environment, our job is to strike the right balance between dealing with our immediate challenges, preparing for the future and safeguarding our economy against global risks.”

We can only imagine the metaphorical policy response – standing in the doorway and holding tight.

But even accounting for tremors, will that be all for a budget also falling on the one-year anniversary of a government that is riding high in the polls, but not because voters have any sense of its reason for being?

Few get the sense that this owes anything to skittishness on the part of the Treasurer.

Starting a national conversation

It’s not just in his choice of metaphors that Dr Chalmers comes across as the Indiana Jones of fiscal policy, but also when compared to some of his peers in the cabinet.

He has been at the forefront of an attempt to incite a national conversation on how we pay for the services we expect from the government – one about to enter a new phase with this budget.

Only recently did the federal government agree to knock off tax concessions for the wealthiest of Australians gaming the superannuation system with a confidence that must come with an account balance requiring three commas to enumerate.

But the bated-breath expectation that followed a change reaping only $2 billion a year for the budget bottom line was belied by the policy meeting only a popular reception with Australian voters.

What message did the government take from this experience with relatively modest fiscal reform?

So far it has been handsomely rewarded for occupying the dead centre of politics.

The Liberal Party has done its part too, and shown that the constituency of people made to feel uneasy by Peter Dutton runs right through the middle of its party room.

But explanations for the Liberals’ foray into some murky political waters by actively campaigning against the Voice to Parliament include the fact that Australians are yet to pin the blame on the government for falling real wages.

Liberal hardheads reckon household savings – which shot sky high during the pandemic – will protect it from such attacks for a while longer yet.

In the meantime, there are only so many other policy ideas a leader with Mr Dutton’s range and reputation can be expected to plausibly sell to voters.

But he will be back.

Still a tough sell

And prudence for its own sake is a tougher sell for a government that has not yet dispensed with one extravagance from the Morrison government in the Stage 3 tax cuts, while enthusiastically strapping on another in AUKUS.

And whatever happens with inflation, it seems less likely that the structural issues driving a record increase in rental costs across our capital cities will resolve itself.

The government’s remedy is stalled in the Senate, where David Pocock and the Greens say the annual expenditure of its $10 billion housing fund equates to, well, just not enough.

We’ll see what the Treasurer has in mind when he returns from meetings this week in Washington.

But voters aren’t expecting the world; he would hardly even need to make the earth move. 

Source: The New Daily