Why Jim Chalmers may be the government’s David Campese

JC: They are, especially the two big ones, who are nine and seven years old. They have a pretty good sense of it, partly because they come down to Canberra for it, and so they know when it’s on. And I’d be stuffed without them because when I’m working, they are just the world’s best pressure valve ... they are so beautiful and so much fun.

Fitz: I’m always confused by just what star a treasurer must steer by doing budgets. Is it as simple as trying to lift the overall GDP and the rest will sort itself – or is it a Southern Cross constellation of stars, trying to lift the GDP and real wages, while lowering the cost of living, interest rates, and debt, and winning the next election, all at once?

JC: The Southern Cross is really a good description of it because there are so many objectives you are grappling with. It’s a series of fine balances: you want the GDP up, but inflation down; but while you want inflation down, you want to help people who are doing it tough; but you need to invest in the future, and you want to keep the place ticking over, and you want to be creating jobs. So you’re grappling with all these balances.

Fitz: An economic boffin of my acquaintance says there’ll be tension right now between you and Albo because, “Jim Chalmers personally will want to deliver the second successive surplus against all odds, while Albo will want to lower the cost of living above and beyond everything else to win the next election”. Is that a fair summation?

JC: No. We are more on the same page than that. And that’s because we’ve demonstrated collectively that we can get cost of living help and get the budget in a better nick.

Fitz: In your Southern Cross of stars, I’d imagine your children are twinkling there somewhere as you look at whether in two or three decades time they will be in an Australia where they can afford to buy their own home?

JC: Yes, I think of the budget in generational terms, particularly in trying to transform the energy piece of the economy – trying to get more renewables into the system, for the sake of the environment as we’ve got an obligation to their generation to hand them something we’re proud of. So I do think in those terms: what’s the economy going to look like, how it’s going to be powered, and are we going to be proud of it in 20 years time?

Fitz: And what about your own electorate? You must frequently come face-to-face with howling pain: “I cannot afford to pay my rent.” “I cannot afford to pay my mortgage.” “Car insurance has gone up 16 per cent, hairdressing is up 22 per cent. What are you doing, you bastard?”

JC: My local community give it to me straight. They are very kind and very supportive, but they’re blunt as well. And I draw inspiration from that. I don’t see it as two different jobs – being treasurer and representing them – I see it as a job in two parts. And when I give a big speech, I don’t think of it as me going to give that speech I think of it as us giving a speech. I get a lot from my local community … they keep me grounded.

Fitz: OK, after budgets are delivered, the pinstripe mob do endless examinations of its entrails into the night, as to just what the budget means, for what shape the economy’s in, and what shape it will be in. Can you just tell us, using no spin?

JC: [Five second pause.] Ahhhh ... the economy’s soft, but we’ll get through it. The best way to describe it is, “I’m realistic about [the problems of] here and now, but optimistic about the future.” We’ve got a few challenges coming at us from around the country and around the world. But I feel like the budget can do two things: it can help people now, but it can also lay the foundations for a much stronger economy in the future.

Fitz: Why is it soft now?

JC: Well, we’ve had these rate rises which has slowed the economy, and we’ve got a lot of global uncertainty, and that makes our economy soft. And it means that people are doing it especially tough. And that’s why our job is to try and ease some of that pressure, while keeping a tight ship so that we don’t blow the budget and make things worse.

Fitz: The classic budget headline back in the day was, “CIGS UP, BEER UP”. You know what you’ve got in the budget, can you give us a broad theme of what you think the headlines will read this time, beyond, “CHALMERS ACHIEVES SECOND SUCCESSIVE SURPLUS?“

JC: I think it’ll say, “A future made in Australia.” That will be the most prominent theme. There’ll be a lot of cost-of-living help, primarily through the tax cuts, so the headlines should be a combination of: “Cost of living help”, and “A future made in Australia based on cleaner and cheaper energy”.

Fitz: And will the headlines indeed credit you a second successive surplus, “YOU BLOODY BEAUTY” or not?

JC: I hope so. But we’re not there yet. We’re ahead about 60 minutes in against the All Blacks, but it would be unwise to say that we’re home yet.

Fitz: I certainly hope we’re doing better than the Wallabies usually are, 60 minutes into the Bledisloe, but moving on. Why did other headlines say this week “NSW got diddled out of $11 billion in GST”?

JC: I don’t think NSW did get diddled. First of all, there’s an independent body that works out how we come up with GST. NSW has got some numbers we don’t agree with. But we disagree with them respectfully because we know they’re under pressure just like we’re under pressure. And we want to work with them, not against them. I think the world of Daniel Mookhey and Chris Minns, and they’re just trying to make things add up just like we’re trying to make things add up.

Fitz: Speaking of GST, it seems to me that very wealthy people with very clever accountants can minimise income tax, whereas GST can’t be dodged. Doesn’t it make sense to lift GST so that even people with clever accountants would have to take more of the load?

JC: No, because if you did increase the GST it would disproportionately impact people on lower incomes. So if some other government at some future time jacked up the GST, they would have to compensate people on low incomes because they would be disproportionately impacted.

Fitz: And yet, under the current system, the OECD has just reported that working Australians on lower incomes, have – through the end of low- and middle-income tax offset and bracket creep – had a 7.6 per cent increase in their average tax rates in 2023, the highest increase in the developed world?

JC: Look, the fact of the matter is that the highest taxing government of the last 30 years was a Liberal government. We’re giving every Australian taxpayer a tax cut from July and because of our tax cuts, the average tax rate will fall from around about 25.4 per cent to around 23.9 per cent. As a government, our whole economic plan is about helping people earn more and keep more of what they earn. Our tax cuts are a better way to provide relief from bracket creep and under our plan, the average taxpayer will pay less of their income in tax for at least the next decade.

Fitz: All right, my editor asks, “Why does inflation have to be below 3 per cent, before my mortgage can come down?”

JC: Well, we’ve got this thing called “inflation targeting”, which basically says the optimal level of inflation is between 2 per cent and 3 per cent. And so that’s what the Reserve Bank shoots for. Now, the joke is that “If you get 10 economists in the room you’ll get 11 different opinions,” but that 2-3 per cent band is largely agreed. We had some inflation numbers out during the week that said, inflation was 3.6 per cent. When we came to office, it was more than 6 per cent. So we’ve almost halved inflation since we’ve been in government. So people with mortgages have been under the pump because of all these rate rises. Our message to them is: we’re making some good progress on inflation. But there’s a bit further to travel before the Reserve Bank can lower rates.

Fitz: Paul Keating, once famously delivered a budget saying “this is a beautiful set of numbers”. What does a beautiful set of numbers look like in the modern day? What are you shooting for?

JC: For me, it’s about wages, employment growth and inflation. And we’ve really got a trifecta. Right now, we’ve got real wages growing for the first time in years, we’ve got inflation moderating, and we’ve got unemployment with a three in front of it. And so that’s a pretty neat set of numbers. But I don’t have the same style that Paul had when those sorts of numbers come out, because I appreciate that people who are doing it tough don’t really want to be told that everything’s going perfectly well. You know, I’d rather acknowledge that people are doing it tough, be up front about the challenges that we have in our economy and then lay out what we’re doing.

Fitz: The truth of it is, though, isn’t your job as treasurer to look after the people who are doing it very tough, and to really hammer people like me, who aren’t?

JC: I don’t see it exactly like that. Our job is to make sure that the economy’s as fair as it can be. And what we showed with the tax cuts is there is a way to help everyone right up and down the income scale, but with a bigger emphasis for people on low and middle incomes, through cheaper medicines, energy bill rebates, rent assistance, and all of those things that we’ve put in place. And so where they need a bit of extra help, they should get it.

Fitz: I once asked Peter Costello on radio, “when are you going to do the Paul Keating option?” He said, “What do you mean?” I said, “Well, Paul Keating famously sprinkled kerosene all over the cabinet room, lit a match, and said, ‘If you don’t make me prime minister, I’m gonna torch the joint’.” They didn’t, and he did. And while Keating became PM through that method, Costello declined. Keating and Costello both did 10 budgets or so. Do you have your own rough plan for the future? Seriously, you couldn’t be a front-rank politician unless you had half an eye on the prime ministership?

JC: I’m a bit different to those two. And you know, if I could be a decent treasurer in a great Labor government, which is led by Anthony from go to whoa, that would make me happy, and I would be proud of [just] that ...

Fitz: Jim! I call bullshit.

JC: [Bemused.] Why?

Fitz: Because you’re a front-rank politician, and all front-rank politicians want, at least down the track, to be prime minister!

JC: Let me put it this way. In the Wallaby teams that you were in, weren’t there good or great players who didn’t necessarily need to be captain, who were happy to make a big contribution to the prospects of the side?

Fitz: Treasurer, are you telling me you’re the David Campese of the Albanese government?

JC: [Laughs.] I don’t know if I’m fast enough for that! My point is, one of the things I like about our government is there are good people in it, and they aren’t clambering over each other for different jobs. They’re getting on with the jobs they have. And this is my job.

Fitz: Your plans for budget day?

JC: I try and get out for a gallop very early on budget day, because it just gets your head right to get a sweat up. So I’ll try to do that, and then my kids arrive. I try and enjoy the moment. But when I walk out into the parliament, and everybody’s there, I try and recognise and understand and appreciate how lucky I am. I don’t want to miss the magnitude of this opportunity.

Fitz: Thank you for your time treasurer, and I’ll leave you to your kids.

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