A growing Labor schism between reform and reassurance

Treasurer Jim Chalmers and Anthony Albanese in Canberra on Tuesday. Picture: NCA NewsWire / Martin Ollman

A politically dangerous gulf is emerging between the Prime Minister and his Treasurer.

Jim Chalmers is presenting as the frustrated reformer, Anthony Albanese as a leader intent on retaining popular appeal.

The different approaches shouldn’t be mutually exclusive, yet there is the appearance of a growing schism between the two.

This is not an image that will enhance Labor’s economic credibility considering the economic and fiscal challenges the nation faces.

There needs to be unity of ­purpose and policy consistency between the Prime Minister and the Treasurer.

On Wednesday morning, Chalmers made a critical mistake in not ruling out the prospect of the government going after the sacred cow of tax concessions – capital gains tax exemptions on the family home.

This should have been instinctive for him. When asked on morning television, he had the opportunity to kill it immediately. Instead, he left the door ajar.

It was political dynamite.

Albanese was quick to shut it down.

“We are not going to impact the family home, full stop, exclamation mark,” Albanese said on radio following Chalmers’ folly.

“It’s a bad idea … I have never heard – in all of the meetings that I’ve been to over the years and I’ve been to a few of the Labor Party cabinet, caucus, branch meetings – I’ve never heard anyone raise that as a proposition.”

Albanese could not have been clearer.

Chalmers was later forced to correct his error at a press conference, giving the same guarantee.

There are two issues now at stake for the government as the budget approaches and with cost-of-living pressures only accelerating.

There is now the appearance of disconnect between the two most senior ministers around the cabinet table.

Chalmers has allowed deeply contentious issues around taxation to drift, seemingly being egged on by Treasury and its enthusiasm for taxation.

Albanese has allowed this to occur.

While there is rivalry between the pair, fuelled by Chalmers’ own ambitions and Albanese’s political cunning, there is no sign of personal hostility.

Yet Albanese won’t be the least bit concerned about Chalmers being knocked about in the media.

The question hanging in the air is how much of this is Chalmers freelancing and how much is owed to a co-ordinated yet flawed strategy that gives licence to the Treasurer to fly kites.

The context for this apparent division is a broken election promise not to make changes to superannuation.

This is dangerous territory for Labor and risks undermining Albanese’s assurances that there was no consideration being given to other taxes.