Chalm offensive

There could hardly be a better time for Jim Chalmers to map out a new fiscal path for Labor. But are his tax-and-spend instincts too firmly entrenched? By Nick Cater.

Spare a thought for Anthony Albanese’s speechwriters as they scratch around like hens looking for something to put into the boss’s mouth. The task of crafting a budget-in-reply speech is less than three months away and could be Albanese’s last. Picture the despair in the Opposition Leader’s office as his staffers sit, heads in hands, among the torn-up pages of Labor’s 2019 policy book. Imagine the cold sweat at 2am as they wake from the nightmare of Albanese rising to his feet on that Thursday evening in early May clutching a sheet of blank paper.

Spending money in a crisis is easy, although as Josh Frydenberg has shown, some governments do so more adeptly than others. Reducing handouts and working off the excess Corona kilos gained by the bureaucracy in the course of the crisis will separate the weak from the strong.

The COVID-19 recession was mercifully short. Nine out of ten of those who lost their jobs or were stood down at the height of the pandemic are back at work. Many others would be working too if the rewards for sloth were not so high. Managers across the country are staring at empty rosters, longing for April 1, when JobSeeker and JobKeeper payments are reduced to a sensible level.

As the alternative treasurer, this could be Jim Chalmers’ moment to shine, to jump to the defence of jobs and small businesses by badgering the Treasurer to cut even harder. There could hardly be a better time to map out the new path for Labor on which he and the so-called Courtyard Group of Opposition MPs have supposedly been working since Chalmers’ meteoric rise from staffer to backbencher in 2013. Labor could at last return to the glory days under Mark Latham who tapped into the wellsprings of suburban aspiration by announcing that the best form of welfare is a job.

Yet Chalmers’ thinking on the subject of welfare could charitably be described as fuzzy.

A rise in what used be called the Newstart allowance was “our highest priority,” Chalmers told journalists last July. Pressed on the appropriate level of the payment, Chalmers told them: “We haven’t put a dollar figure on it.” Five days later the ever-patient Kieran Gilbert asked Chalmers when Labor might arrive at a definitive position. “Much closer to the election,” Chalmers replied.

On one point at least, Chalmers is clear. Welfare cheques, whatever the amount, shouldn’t be sent to dead people. The ABC’s Fran Kelly raised the matter with him last week. “You said Scott Morrison and Josh Frydenberg, quote, ‘were sprung sending JobKeeper money to dead people’. Since then, the tax office has said it's not aware of any ultimately successful claim for deceased or other fictitious employees. Were you just after a cheap headline, how'd you get that so wrong?”

“Well, it was very clear from the Freedom of Information request reported by the ABC that there was a lot of rorting,” Chalmers insisted, “and I stand by that.” A flat denial of an official tax office statement might get Chalmers off the hook in a Radio National interview, but errors can be fracked wide open in the heat of an election campaign.

That Chalmers should be Labor’s candidate for Treasurer is worrying enough. That he should be considered as a serious contender to succeed Albanese underlines the severity of Labor’s problems. An apprenticeship under former Treasurer Wayne Swan raises difficult questions. What part did he play, for instance, as Swan’s self-proclaimed mouthpiece, in scripting the memorable opening lines of the 2012 Budget Speech? “The four years of surpluses I announce tonight…”

In his aptly named book Glory Daze in 2013, Chalmers compared Swan’s carbon tax to the greatest reforms of the Hawke and Keating era. “Carbon pricing will go down as a legacy achievement of Labor, no matter what occurs,” he wrote. “It will be very difficult for even an Abbott administration to get rid of it. It is by far the biggest single environmental measure ever enacted in Australia.”

With the arrival of COVID-19, the Opposition changed tack, pinning their hopes on a deep and long recession and an election fought against the background of declining asset prices and high unemployment. Chalmers tried to nudge it along, trash-talking the economy, using the verb “floundering” more than 100 times last year.

As fortune would have it, it is now Labor that appears to be floundering. The economy has managed to withstand the worst, including the erratic attempts by Labor premiers to kill it off.  

Labor’s hopes of winning an election by mining the grievances of Australians in the midst of a recession are fast receding. The party has to decide who it stands for, as former ALP National President and Senator Stephen Loosley put it bluntly on Monday. As senior economics spokesman, Chalmers should be presenting a clear and consistent message explaining what the party represents, and he won’t find the answer by talking to inner-city barista philosophers.

After barely a year in unexplored territory and the largest government fiscal injection in peacetime, the economic debate has returned to the crucial question of the size and scope of government. Against the weight of historical evidence, there are those who still believe that governments have the ability to grow the economy and create jobs.

It is not clear if Chalmers is among them or if he stands by the tried and tested approach that empowers individuals to fulfil their aspirations, driving the economy forward through enterprise and industry. Can he forge an economic policy along broadly liberal lines, as did leaders like Bill Hayden, Bob Hawke and Paul Keating? Or are his tax-and-spend instincts too firmly entrenched?

His reflections on Labor’s stimulus spending during the 2008-09 financial crisis offer little reassurance. “It is far better to spend too much than too little,” he wrote in Glory Daze. That, we must assume, is Labor’s current fiscal policy, unless Chalmers has the courage to tell us otherwise.