How Jim Chalmers went from trainee to trainwreck treasurer

Treasurer Jim Chalmers has set a new low in fiscal foolishness and left the door open that Labor might come after your super, capital gains, franking credits and negative gearing.

Geez. Jim Chalmers managed to go from trainee treasurer to trainwreck treasurer in one spectacular leap.

Before Tuesday he had only managed to get Australians worried about whether and when the taxman was going to come after their super.

Now, he’s left open the door that they’ll still be coming after your super.

And they might also target the family home and those ‘good ideas’ that helped the previous Labor leader Bill Shorten lose the ‘unlosable’ 2019 election – franking credits on share dividends and negative gearing on investment properties.

Indeed, even more punitively, they might even target ordinary everyday expenses claimed as tax deductions across a wide front, including even expenses on properties that weren’t negatively geared.

How did he manage to ‘achieve’’ all this in one spectacular fiscal and political trainwreck?

In a three-step process.

First, he’d been banging on all through February about how the tax concessions on super were getting bigger and bigger and simply unsustainable. By 2050, they’d be costing “more than the pension”.

The changes targeting high-end super that he announced Tuesday will save all of $2bn a year – off a $50bn-plus, and growing, super tax bill.

That barely touches the sides. By 2050, the super bill will still cost more than the age pension. On his own rhetoric he will have to hit super much harder. That’s if he stays Treasurer of course.

Then secondly, he rolled out the so-called “Tax Expenditures Statement”.

There was super ‘costing’ the budget $50bn a year. There was also the tax-free status of the family home costing much the same every year. Plus all the rest – no GST on food and health, and everyday expenses of millions of everyday Aussies, like costs on (all) rental properties and work expenses.

Of course, he would say, we’d never target any of these. They’re as safe as your super; well, as houses.

Except on Wednesday, in ‘step three’ of his exquisite trainwreck, he refused to say precisely that.

Pressed repeatedly, he refused to rule out whacking the capital gains tax on the family home.

Alarm bells went off big time. The prime minister hit the phones to say repeatedly and emphatically: there will be no capital gains tax on the family home under a government I lead. Or something like that.

The ultimate humiliation: a treasurer who had to be bailed out on economic and fiscal policy by a PM who didn’t know the Reserve Bank’s official interest rate or the jobless rate.

Originally published as How Jim Chalmers went from trainee to trainwreck treasurer