Good ideas strangled by red tape: Treasurer to crack down on bureaucracy

Treasurer Jim Chalmers has admitted left-leaning governments are strangling their own good intentions with bureaucracy, arguing it is time to deliver supply side solutions to problems ranging from housing to renewable energy.

In his first extended sit-down newspaper interview since May’s federal election, Chalmers has demanded regulators overseeing everything from the banking sector to consumer law identify regulations that can be axed or simplified to reduce costs and increase the pace at which the economy can grow.

Chalmers revealed the recently released book Abundance, which argues progressives need to re-think their overly rules-based approach to making the change they want, had been a wake-up call for the left of politics.

Treasurer Jim Chalmers admits the progressive side of politics is getting in its own way, strangling its ideas.Credit: Alex Ellinghausen

The book, by American journalists Ezra Klein and Derek Thompson, was “doing the rounds” of the ministry and senior MPs keen take on board the authors’ insights which include trying to strip red tape from scientific research and housing construction.

Chalmers said the upcoming productivity roundtable would tap into the ideas outlined in Abundance.

“I mean the fascinating thing I found about Abundance was basically, even if you have quite a progressive outlook, we’ve got to stop getting in our own way,” he said.

“We want good things to happen, we’ve got to stop strangling good things from happening. I think that’s very, very compelling for us.

“It’s confronting for us because it’s a kind of a – the term ‘wake-up call’ gets used a bit too easily – but there’s a sense of at what point do we start getting in our own way, preventing good things from happening because of an abundance of good intentions.”

Chalmers said the former head of America’s Federal Reserve, Janet Yellen, had noted that progressives had surrendered the importance of the supply side of the economy.

Supply side economics focuses on reducing impediments to the production of goods and services, often by removing government interference or ownership. It has long been associated with the political right, particularly former British prime minister Margaret Thatcher and former US president Ronald Reagan.

While distancing himself from such prominent members of conservative politics, Chalmers said the productivity roundtable, due to take place in August, would focus on the supply side of the economy.

“Yellen was great at saying, ‘You know that our side of politics needs to own supply side economics.’ That’s what energy is all about, that’s what all of these issues that we’re grappling with and engaging with now are all about,” he said.

“The roundtable and all the rest of it is a more explicit, more dedicated, clearer focus on the supply side of our economy, not just kind of demand management, but the supply side.”

As part of the effort to reduce red tape, Chalmers is writing to all regulators under his and Finance Minister Katy Gallagher’s control, asking them to bring down compliance costs.

Those regulators include the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission plus many more, covering most elements of federal oversight of the economy.

Chalmers said he wants measurable reductions in red tape.

Regulators such as APRA are being asked by the government to find ways to cut red tape and costs on the businesses they oversee.Credit: Patrick Cummins

“We’re saying to them: tell us where we can get the regulatory burden down, the compliance costs burdened down in a way that you’re comfortable with,” he said.

In a speech to the National Press Club last week, Chalmers spent much of his time discussing individual tax settings, noting any reform had to lift productivity, simplify the overall system and improve intergenerational equity.

Key measures of productivity have slowed across the world over the past 20 years, particularly in Australia. Only one major developed nation, the United States, has registered substantial productivity gain over recent years, but even it went backwards through the first three months of 2025.

Apart from the roundtable, the Productivity Commission has five separate inquiries underway, focusing on areas including taxation and regulation, renewable energy, aged care, skills training and the use of digital technology and data.

Chalmers said the areas being investigated, particularly around technology, would be pivotal to lifting Australians’ living standards.

“We need to get much better at adapting, adopting technology. I think that’s going to be one of the biggest parts,” he said.

“If you think about those five pillars we gave [commission chair] Danielle Wood to report back on, you know: energy transformation, tech, human capital, care economy, competition policy. That combination of things, particularly human capital and technology, I think that’s going to be where the gains are.”

Chalmers handed down his fourth budget on March 25, the earliest Commonwealth budget since federation. Since then, a string of major events, including Donald Trump’s liberation day tariffs, the conflict between Israel and Iran, and a sharper-than-expected fall in inflation have all occurred.

He pushed back at suggestions he should replicate his actions in 2022 by doing another budget later this year.

“I think if we did a budget every time the world turned then we’d be doing them almost weekly,” he said.

“I don’t mean to be flippant about that, but there’s always a reason to, there’s always this permanent state of volatility now.

“I think these 14 months [until the 2026 budget] of considered, collaborative, longer-term policymaking are an advantage. We speak about it and think about it in those terms: a period of some longer-term thinking, which doesn’t rob us of the ability to respond to dramatic changes in international events.”

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