Jim Chalmers’s luck has run out, as Anthony Albanese turns to him to reverse the government’s fortunes and get it back on-message months out from a tight federal election.
In his mid-year economic and fiscal outlook on Wednesday, the Treasurer will use every political skill he has to spin a set of grim numbers.
While not a fan of being described by some economists as the “luckiest” treasurer in Australian history, Chalmers’ back-to-back surpluses were largely built on post-pandemic migration, resources and labour market booms.
The achievement of consecutive surpluses has not had the cut-through Chalmers wished for, with Australians more focused on keeping a roof over their heads and their businesses open, paying record high utility bills and servicing ballooning mortgages.
The Albanese government argues that it has done plenty to support households and business owners through the cost-of-living and housing crises but punters aren’t buying it. The wash-up of domestic and overseas elections has shown incumbent governments are copping the blame from voters who believe they should be doing more to help.
Even if we see a series of election-focused announcements in MYEFO and during the campaign, there is a growing feeling that if Labor – after more than 2½ years in office – hasn’t found its line and length on cost of living and housing issues … the government has a serious political problem.
Big off-budget funds and ambitious promises underpinning Albanese’s $32bn Homes for Australia plan, $15bn National Reconstruction Fund, $20bn Rewiring the Nation fund and $22.7bn Future Made in Australia package are falling flat with voters.
The Albanese government is on track to miss some of its key performance indicators, including having 82 per cent renewables in the grid by 2030, building 1.2 million new, well-located homes by mid-2029, having a world-first fault-tolerant quantum computer operating in Brisbane by 2027, and replacing coal with renewables to slash emissions by 43 per cent within five years.
With Albanese struggling in the polls and his government scoring own goals that have perpetually thrown it off kilter since the Prime Minister’s doomed Indigenous voice referendum, Chalmers is under pressure to deliver the goods.
Chinese President Xi Jinping’s faltering economy, the return of Donald Trump to the White House, a looming global trade war and the ongoing slowdown in commodity prices are largely global factors outside of the control of Chalmers, but the potential economic consequences for Australia are significant.
Closer to home, Chalmers faces criticism over the impact of higher public spending on sticky inflation and that governments are keeping interest rates elevated for longer, that exploding public service numbers are keeping the unemployment rate lower, and that energy bill relief is doing nothing to dampen pressure on households.
Chalmers faces a tough road ahead.
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