Treasurer Chalmers must stick to budget management and inflation

Jim Chalmers’ promise to include intangible measures of wellbeing in a parallel budget may have seemed like a good idea in opposition but its delivery has confirmed the worst. The process is a distraction from what must be the core business of economic management. The results it has produced are so out-of-date that they cast a depressing light on the ability of those supposed to be in the engine room of policy development and reform. As we reported on Friday, the long-awaited wellbeing budget has used out-of-date data to declare homeowners are finding it easier to repay mortgages, the disabled are less satisfied with services and mental health is not a rising concern. The old data fails to reflect the pandemic, billions of dollars in extra National Disability Insurance Scheme spending and the most aggressive series of interest rate rises in a generation.

The Treasurer said the Measuring What Matters report would provide policymakers, businesses and community groups with a more complete snapshot of national prosperity and progress than traditional economic metrics such as gross domestic product. Plainly this is not yet the case. Faced with the embarrassment of underwhelm, Dr Chalmers attempted to put a brave face on humiliation. The aim, he said, was to broaden the economic conversation so we were focusing on health and wellbeing, security, prosperity, cohesion and sustainability as well. This was, he said, “the first crack at it. Obviously we welcome people’s feedback and we want to refine and realign this framework as we go forward and this is a really important start today”.

It is difficult not to agree with opposition Treasury spokesman Angus Taylor’s assessment that Dr Chalmers appears out of touch using two-year-old data on mortgage stress despite 280 submissions, six months of taxpayer-funded consultation and $157m in extra funding to the Treasury portfolio for better data in the last budget. Mr Taylor said the report was insulting to Australians struggling with the cost of living in straitened times. The whole exercise appears more confounding given the fact federal governments have tracked longitudinal trends in Australians’ economic and personal wellbeing, social connectedness, health and education through the Household, Income and Labour Dynamics in Australia project for more than two decades, and published this data for 17 years through the Department of Social Services’ annual HILDA statistical report. Voters no doubt will agree with Mr Taylor’s assessment that the best way to improve wellbeing is to have a government that makes managing the economy and fighting inflation priorities one, two and three.

Hopefully the reality of the report’s shortcomings will help to bring Dr Chalmers back from the brink of his professed economic adventurism, expressed first in a much criticised essay published in The Monthly in February and expanded on in a Brotherhood of St Laurence 2023 Sambell Oration this month. In the essay, Dr Chalmers floated the need to reimagine and redesign markets to create “a better capitalism, uniquely Australian” and “a new, sustainable finance architecture, including a new taxonomy to label the climate impact of different investments”. In the Sambell Oration he outlined how the Albanese government was already working to “renovate our institutions” and “measure what matters”.

At the time, we remarked that at some point the Chalmers doctrine inevitably must collide with reality. The release of the wellbeing report hastens that moment. Rather than remodelling institutions such as the Reserve Bank of Australia and Productivity Commission that offer considered and professional independent advice to government, Dr Chalmers must spend his time focused on his day job, doing what must be done. This includes dissuading colleagues from embracing a destructive path on industrial relations reform and limiting spending growth and borrowings across the board to assist the RBA in reining in inflation. Forget the puffery; this is the measure on which his performance, and that of the government, will be judged.