Is this Gentle Jim’s JFK moment? If it is, he’s overlooked one thing

Jim Chalmers shocked Australia this week. The treasurer gave a speech to the National Press Club that didn’t try to bludgeon the country into accepting his view. Instead, he asked Australia a question. Can we, as a people, make big reforms to make our country better, even if it’s hard? Or are we too selfish, too myopic, too complacent?

We are accustomed to governments boasting of their own brilliance. We are not used to governments confronting us with questions of our own limitations.

Jim Chalmers at the National Press Club on Wednesday.Credit: Rohan Thomson

We are accustomed to governments lubricating us with the snake oil of flattery about our confected achievements – “our economy’s success is all thanks to hard-working Australians” – when all we’ve done is try to pay our bills. But we are not used to governments bluntly asking us if we’re any good.

“We can do more, and we owe it to people to see if and where there’s appetite,” said Chalmers. “This is all about testing the country’s reform appetite.” Australia’s living standards are in genteel decline. Chalmers is asking whether we have the guts to tolerate some short-term dislocation in return for long-term rejuvenation.

The venue for this test is an economic roundtable to be held in the cabinet room of the federal parliament from August 19 to 21. Albanese had earlier announced that it would include business, unions, civil society and experts to discuss future reform prospects. Now Chalmers threw open the agenda to include the throbbing aorta of the state, the tax system.

In the audience was the guru of tax reform, former Treasury secretary Ken Henry, who’s been so frustrated with timid governments for so long that he’s come to be Australia’s St Jude, patron saint of hopeless causes. After hearing Chalmers’ speech, he was full of hope anew. “It’s visionary,” he tells me. “It’s ambitious and it’s overdue.”

Henry says that he’d encouraged Chalmers: “This is bigger than policy reform. This is a moment for the future of liberal democracy.”

Illustration by Simon LetchCredit:

Yet Chalmers offered nothing but the possibility of a better future. Instead of a politician’s promise, he made two requests, prerequisites for any reform effort to proceed. He asked political journalists for a little self-restraint. And, harder yet, he asked everyone with any power or privilege to set aside their self-interest.

The request for reporters’ self-restraint? He asked that the media abandon a standard form of questioning which he called the “rule-in-rule-out game”. This happens when a minister is thought to be considering a particular policy and before the minister has had a chance to develop the policy or test it with the cabinet colleagues.

An interviewer will ask the health minister, for instance: “Are you going to put a tax on the sugar content of processed foods?” The minister, who has a background in metallurgy and a weekend interest in ferret racing, hasn’t decided yet so she says she has no such plan in mind. “So will you rule it out?” The minister feels pressure to give a premature commitment or a panicked rejection.

The journalist is merely trying to get a story. A clear yes or no. But, as Chalmers said, “limiting ourselves to ruling things in or out forever has a cancerous effect on policy debates”.

And the plea to the privileged and powerful to put self-interest aside? “Too often, the loudest calls for economic reform in the abstract come from the noisiest opponents of actual reform in the specific.”

For example, everyone agrees that tax reform is important. But if a government devises a tax reform plan that would be good for the nation overall yet require some contribution from the powerful, woe betide it. It will be furiously opposed by every premier whose state might receive a dollar less, by any industry whose companies might pay a dollar more, and any section of the wealth-management class whose tax advantages might retreat by one cent in the dollar.

A case in point. The Australian newspaper and The Australian Financial Review for years have issued stentorian demands that Labor do more to balance the budget. Yet when Chalmers proposed a reduction in the tax concession for earnings on superannuation balances over $3 million, the papers led a hysterical campaign against the change. Even though it would raise $2.3 billion a year. And the only people contributing would still be hanging onto a substantial tax concession plus their $3 million or more.

Through sheer hyperventilation, these supposedly serious newspapers managed to mobilise much of the country’s media in a witless defence of the exorbitant tax privileges of just 80,000 of the richest people in the world. Of these, incidentally, 30 have super balances of $100 million or more. This is no longer a retirement savings vehicle; for the rich, it’s a tax shelter. The screams of entitled rage against this proposed change, a minimalist piece of housekeeping, are nauseating. The median Australian worker has a super balance under $100,000.

Asking the powerful and the privileged to set self-interest aside will be the hardest part of Chalmers’ experiment, and probably impossible. The opposition says it will work constructively with the government, but ultimately will oppose.

Is it any surprise that Chalmers wants to test the waters before he takes the plunge? “Let’s see what we can do together if we reset and renew the national reform conversation,” he said at the Press Club.

“I am personally willing to grasp the nettle, to use an old saying. I am prepared to do my bit.” He promised that any proposals would be approached from the political centre, with no ideological tests applied. “The government is prepared to do its bit. And what we’ll find out in the course of the next few months is whether everyone is prepared to do their bit as well.”

The Albanese government routinely is described as timid. Chalmers dismissed that criticism by reciting dozens of policy actions in progress. He did reinforce Prime Minister Anthony Albanese’s emphasis that the government’s priority is to deliver on its election promises. But then Chalmers broke new ground.

“Delivering our commitments,” he said, “is the best place to start – but it’s not the limit of our ambitions. They’re a foundation not a destination.”

And he offered this trade-off: “Let’s see what we can achieve together if we dial up the ambition a bit and dial down the rancour a bit as well.”

With those two requests for self-restraint, Chalmers also has given himself two easy outs. If the media insists on playing the rule-in-rule-out game, he can shut down an interview or reject a line of questioning. If lobby groups or industry associations simply make self-interested demands, he can shrug and walk away from the entire exercise.

Is this really leadership? Is this actually “visionary”? Or is this a feeble feeler that will retract into defeat at the first real resistance? Paul Keating jolted the country out of its customary torpor by warning that Australia was going to become a “banana republic” if it failed to mend its way. The Hawke-Keating reform era began.

Chalmers, too, issued warnings. “Our budget is stronger, but not yet sustainable enough. Our economy is growing, but not productive enough. It’s resilient, but not resilient enough – in the face of all this global economic volatility.” He’s seeking ideas for policies that will contribute to solving this ménage à trois of mediocrity.

Gentle Jim’s earnest anxiety doesn’t compare with Old Testament Prophet Paul’s 1986 apocalyptic vision. What makes Chalmers think that Australians are prepared to shake off our traditional national enemy – complacency – long enough to take risks and make sacrifices?

Trump, in a word. As the election demonstrated, the country is uneasy with the US descent into angry chaos. So are many Americans. Barack Obama made a rare public intervention this week to warn that America was approaching autocracy.

Public officeholders need to honour their vows to protect the constitution, said the former president: “And when that isn’t happening we start drifting into something that is not consistent with American democracy. It is consistent with autocracies. It is consistent with Hungary under Orban. We’re not there yet completely, but I think that we are dangerously close to normalising behaviour like that. And we need people both outside government and inside government saying, ‘Let’s not go over that cliff, because it’s hard to recover’.”

This is the “banana republic” shock of our time. As Chalmers said: “So much of the democratic world is vulnerable because governments are not always meeting the aspirations of working people. We have a responsibility here and an obligation. A responsibility to rebuild confidence in liberal democratic politics and economic institutions – by lifting living standards for working people in particular.”

In essence, the treasurer is asking us to be more than ourselves. He’s testing our patriotism. “And if we fail it won’t be because of a shortage of ideas, options or choices. It won’t be a shortage of courage – but a shortage of consensus. We have everything we need but that.”

But consensus does not take shape organically. It is a moment for Australia, and a moment that will require leadership, too.

Peter Hartcher is political editor.

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.