Why I owe Jim Chalmers an apology after super changes

Treasurer Jim Chalmers is owed an apology, writes The Mocker. Picture: NCA NewsWire / Gary Ramage

No man ever steps in the same river twice. For it is not the same river, and he is not the same man.

It is official. Treasurer Jim Chalmers is a visionary, and his maligners owe him an apology. I confess that I was one of them. Initially I, along with many others, was unconvinced of the genius he demonstrated in his 6000-word essay published recently in The Monthly. Such was my ignorance I thought his quoting Heraclitus was but an undergraduate attempt to lend profundity to his turgid dross and grandiose plans to redefine capitalism.

But I was mistaken. Chalmers is not merely prescient: he is a prophet, albeit a self-fulfilling one. Asked by ABC Insiders host David Speers in March last year whether there would be any changes to the superannuation rules, Chalmers was the very picture of reassurance. “Look, we’ve said about superannuation that we would maintain the system,” he said, adding that the public should not expect “major changes”. Likewise, then opposition leader Anthony Albanese declared just weeks before the election that Labor had “no intention of making any super changes”.

As we saw last week, Chalmers is no longer the same man. Furthermore, his surrounds have changed. Jim now sees before him a river of gold, which just happens to be our superannuation. Contrary to his previous assurances, he now wants to divert the flow his way. He has great plans, you see. He wants nation-building and a social purpose co-investment model funded by our nest eggs.

But that is in the future, and for now, Chalmers has announced what he would have us believe are minor changes. The government merely intends doubling the tax on superannuation earnings for balances over $3m, from 15 per cent to 30 per cent. This will affect only 80,000 or so people. Most are over 60, and many of them have spent a good deal of their working lives paying tax in the top bracket. If any demographic deserves to suffer, it is this lot I say. And the number of people affected by these changes is only going to increase, given the government will not index the $3m threshold.

Chalmers’ performance as Treasurer in recent weeks gives every indication he is the equal of his Labor predecessors Chris Bowen, Wayne Swan, and Jim Cairns. As this masthead reported on Wednesday, Chalmers could not, despite having announced the superannuation changes on Tuesday, answer how many Australians on defined benefit schemes would lose tax concessions from July 1, 2025.

It did not end there. In a trainwreck interview on Sunrise on Wednesday morning, Chalmers repeatedly refused to rule out abolishing the capital gains tax exemption on the family home, forcing Albanese to rush to the airwaves to overrule his Treasurer. Not surprisingly, commentators are saying the schism between the two men is growing. Well at least they share a birthday, which happens to be today. As zodiac enthusiasts will tell you, Pisces symbolises two fish swimming in opposite directions.

Being misunderstood seems to be something of a pattern for Chalmers. When conservative and progressive commentators alike derided his piece in The Monthly, he protested in a Fin Review op-ed that “the main conclusions of the essay were either wrongly caricatured, deliberately ignored or completely missed.” It is a fortunate thing that Dr Chalmers insists on his academic title, because otherwise we might forget he is an educated man.

The best thing that can be said of the government in this debate is that Labor ministers have shown themselves to be men of metaphors. Not to be outdone in the literary field, Assistant Treasurer Stephen Jones last week came up with his own. The government’s plan to legislate the objective for superannuation, he told a self-managed super fund industry conference, was “a proposal for an objective for the hive”.

“In the self-managed sector, there are over 600,000 funds holding around $870bn in retirement savings – that’s a lot of honey,” he said. “We want to make sure there is plenty of honey to go around.”

To go around? You too probably thought as I did that your superannuation was for your benefit and not for the collective. In fairness to Jones, I too had an insectile metaphor in mind to describe Labor’s policies for our retirement savings, but mine was a plague of locusts devouring a carefully nurtured crop. But I think Jones’s more imaginative.

Think of those building their superannuation holdings as hardworking bees. Along comes the beekeeper. For the sake of this exercise, let’s call him ‘Stephen’. First, he blows smoke up the bees’ you-know-what to disorient and confuse them. Next, Stephen removes the trays and uses a centrifugal device – spin – to extract the honey for himself and his mates. Congratulations, Assistant Treasurer. That is a perfect encapsulation of your government’s methodology.

For all his talk about cracking down on wealthy Australians with excessive superannuation, the Prime Minister did not want to talk about an Institute of Public Affairs analysis that predicted he would enjoy a publicly funded pension of $416,800 per year upon retiring, instead saying the figure was “wrong”. When invited to correct it, he refused to do so. That was a lost opportunity. He could have finally refuted the notion that he is hopeless with detail. In fact I would bet my house on Albanese being able to rattle off this figure right down to the last dollar.

So what has all this achieved for the government? Very little. It will realise an extra $2bn in revenue, but its broken promises and ineptitude are such that the cost to its reputation is far greater. This will have consequences not only for its taxation policies but also its trustworthiness in general. For example, how many people will believe Albanese’s oft-repeated line that the proposed Indigenous voice to parliament will be an “advisory body” only?

As for his Heraclitean aphorism, Chalmers has been proved right in more ways than one. In an editorial regarding his essay, The Fin Review denounced the Treasurer, saying his “basic purpose is to discredit the modern relevance of the previous Hawke-Keating Labor reform era that liberalised Australia’s protected and over-regulated economy and built today’s national prosperity”.

Contrast that with an excerpt from Chalmers’ maiden speech of 2013. Reflecting on Labor’s demise and the rise of the Howard government, he gave a solemn undertaking. “After 1996, I came to agree with those who argue Labor’s great mistake was its failure to defend the towering achievements of the Hawke and Keating governments,” he said. “We will not make the same mistake this time around.”

He is no longer the same man. As for the place he has returned to, it is no longer the same river. It is now a creek. And Chalmers and his credibility are stuck there without a paddle.