Budget 2024: Jim Chalmers’ challenge is winning old and new Labor voters
Sixteen years after Jim Chalmers helped Wayne Swan deliver the Rudd government’s first budget, the Treasurer of 2024 faces a completely different political map of blue-collar electorates.
Dramatic demographic shifts that have lifted the wealth of many Labor seats and shifted traditionally ALP-voting tradies and labourers into Coalition and independent territory over the past 20 years underpinned the framing of Jim Chalmers’ third budget, with the Treasurer declaring outer-suburban Middle Australia is “front of mind in this government and central in this budget”.
Sixteen years after Chalmers helped his former boss Wayne Swan deliver the Rudd Labor government’s first budget, the Treasurer of 2024 faces a completely different political map of changed allegiances, enrichment of ALP seats and a transition of blue-collar electorates.
At Kevin Rudd’s 2007 election victory, Labor won 24 of the 30 seats with the highest percentage of tradies, technicians, labourers and machine operators, census data reveals. The defeated Coalition parties held just five and the indefatigable independent Bob Katter held his north Queensland stronghold.
At the bringing down of Chalmers’ third budget on Tuesday, Labor’s hold on “tradie seats” had almost halved to just 13. That left it with fewer than the Coalition, which has seen its share triple to 15 – the Liberals hold 10 and the Nationals five. (Katter is also still there.)
At the same time as the tradie shift, rising wealth, pushed by property prices, has overturned Labor’s “battler” image of 2007 when the ALP held only eight of the 30 electorates with the highest median household income. Now Labor holds 14 of the 30 wealthiest seats – despite holding fewer seats overall. Labor seats have been the biggest beneficiaries of rises in median household income since 2007, with 21 of the 25 seats with the largest percentage income increases now held by the ALP, including many traditional Labor strongholds.
The ALP – a party founded at a meeting of striking shearers at Barcaldine, Queensland, in 1891, and long committed to standing up for the rights of workers, many on low pay and with poor working conditions – now represents more affluent seats than it ever has.
Indeed, Anthony Albanese’s seat of Grayndler in inner-city Sydney saw median household income more than double between the 2006 and 2021 censuses, jumping from being the 32nd highest household income electorate in 2006 to 10th, joining the ALP seat of Canberra in the top bracket.
At the bottom end of the scale, Labor held four of the 10 electorates with the lowest incomes after the 2007 election, but in 2022 there were no ALP seats in the bottom 10 and only four in the bottom 30. Conversely Coalition MPs now represent fewer of the wealthiest seats, having lost seven one-time heartland electorates to teal independents over two elections, and more of the lowest-income seats than ever before.
Chalmers is alert to the new political and economic challenge emerging from the change of income status in Labor electorates and is trying to align Labor’s political interests with economic growth in Middle Australia, particularly in outer-metropolitan suburbs and regional areas.
The Treasurer goes so far as to say the people of Middle Australia undergoing these changes are “central in this budget”.
In his budget speech, he proclaimed Labor’s revamped stage three tax cuts were “about rewarding the hard work of our nurses and teachers, truckies and tradies”.
Chalmers likes to present himself as a treasurer from the outer suburbs for the outer suburbs, and tells The Australian these demographic changes are an intrinsic part of his strategy.
“The future of the economy and the future of the government are both overwhelmingly in the outer suburbs of Middle Australia,” he says.
“Whether it’s western Sydney or southeast Queensland, we want people to earn more and keep more of what they earn because we understand and support the legitimate suburban aspirations of millions of Australians. They are front of mind in this government and central in this budget.
“Our government’s reason for being is to manage cost-of-living pressures, maximise future opportunities in our economy, in the interests of Middle Australia.”
Chalmers is confronted by a political inversion, with Peter Dutton claiming the Coalition now represents the workers, the regions, suburban Australia and small business, as the Opposition Leader seeks to go back to the future and lure John Howard’s battlers who swept the Liberals to victory in 1996.
In 2007, 22 of the top 30 seats by household income were Liberal-held. Now, the Liberals have only six of the top 30. Ten are shared between the teal independents (seven) and the Greens (three).
For Swan, with a budget surplus left by Peter Costello and a traditional Labor aim to look after battlers in lower-income seats, the 2008-09 budget had at its “very core” a “$55bn working families support package” and was aimed at beginning “a new era of strategic investment in Australia’s future challenges and opportunities”. While the language Chalmers is using now is remarkably similar, with Labor’s Future Made in Australia policy and the “challenges and opportunities” of vast energy transition, the economic circumstances couldn’t be more different.
Chalmers is producing a second budget surplus, but it may be the last in a long time as he lifts spending over the forward estimates to a level expected to be the highest since the early years of the Hawke government, excluding the two years of the Covid-19 pandemic. Faced with a grim outlook, the Treasurer has moved to emphasise the already-announced revamped stage-three tax cuts as a bulwark against the rise in cost of living that dominates the economic and political debate. He is also trying to do what he can for those on lower incomes and benefits, even though Labor doesn’t hold a seat in the bottom 10 on a household income basis.
“A tax cut for every taxpayer will be the centrepiece of the cost-of-living help in the budget and if we can afford to do a little more than that,” Chalmers said before the budget.
But there is still the difficulty of trying to appeal to those tradies, sole operators and small business owners who populate electorates Labor no longer holds and which Dutton is trying to entrench as Coalition seats, particularly in Queensland. Since 2007, Labor has surrendered eight tradie seats, five of which are in Dutton’s home state: Flynn, Capricornia and Dawson in central Queensland and Forde and Longman on Brisbane’s fringes.
Recognising the national shortage of tradesmen, Labor announced before the budget a policy to boost their number – but it is a double-edged sword, electorally.
The budget includes $62.4m for 15,000 new construction-linked fee-free TAFE places and $26.4m to deliver 5000 places in pre-apprenticeship programs. This is bound to be popular in regions where tradies abound.
But at the same time, the budget includes $1.8m to streamline skills assessments for 1900 potential migrant tradespeople from countries headlined by Britain and Canada who have comparable qualifications and who want to work on Australian construction sites, potentially creating competition for jobs with locals.
With an eye on the key electoral and mining revenue states of Queensland and Western Australia, Labor reached out in the budget with major support packages, including targeted production tax credits for miners struggling with low prices and foreign competition in the nickel, lithium and rare earth industries.
Labor has also seen the tradie share of the workforce shrink in many of its heartland seats. While there has been a 12 per cent reduction nationally in workers employed in trades or technical, mechanical and labouring jobs from 2006 to 2021 (adjusted for population change), there have been much larger drops in Labor-held seats such as Blaxland in western Sydney (22 per cent), Gorton in western Melbourne (20 per cent) and Whitlam, formerly Throsby, which has been extended inland from the NSW south coast to cover much of the Southern Highlands (18 per cent).
Based on the census data, Flynn is the nation’s blue-collar epicentre, with almost half its workers employed in such jobs.
The shift of tradie electorates to the Coalition – either through seats changing hands or demographic forces pushing up the number of labourers in rural seats such as Nicholls in Victoria and Wright in Queensland – underpins why the opposition has targeted Labor’s proposed vehicle efficiency standards to promote the use of lower-emissions cars, with the Coalition dubbing the policy as a “family car and ute tax”.
Labor will also be defending three marginal tradie-strong seats at the next election, due by May 2025: Paterson and Hunter in NSW and Lyons in Tasmania.
Perhaps even more ominously for Chalmers and Labor than the loss of Queensland blue-collar seats, another traditional ALP electorate with a high proportion of tradies that has been lost is Fowler, in western Sydney.
Independent Dai Le won the long-held Labor seat in 2022 and with tenacity and persistent questioning on local issues, such as cost of living and HECS debts, shows every sign of holding on to it next year.
Across wider western Sydney there is a real threat to Labor MPs from Liberal and independent candidates running on a cost-of-living platform, including against Energy Minister Chris Bowen in McMahon. It is here Chalmers is aiming to appeal to traditional Labor voters without splashing cash around and endangering his overall strategy of trying to contain government spending and curb inflation.
For the Treasurer, infrastructure is an important incentive. “Western Sydney will be a big priority in the budget,” he declared on a visit to the area this year. “And we’ve already spent I think something like $15bn in western Sydney … and we expect that investment to continue to grow.
“Funding for infrastructure in NSW went up by around $1.3bn in MYEFO and one of the reasons why we want to get the budget in much better nick is so that we can afford to invest in really important parts of Australia, like western Sydney.
“I say to the people of western Sydney – you will be a big priority in the budget: tax cuts for every taxpayer, more cost-of-living help if we can afford to do that, and investments in a really important part of Australia.”
Last week the Prime Minister announced a $1.9bn commitment towards 14 new projects and providing additional funding for two existing projects in western Sydney, including road and rail developments.
“These projects will help underpin the fundamental shift of jobs and growth to Sydney’s west,” Albanese said.
Back in 2008, facing international turbulence, inflation and high petrol prices, Swan not only offered a $55bn families relief package and tax cuts for everyone, but also announced a “new era of strategic investment in Australia”.
“I announce that the government will invest $20bn in a new Building Australia Fund to finance roads, rail, ports and broadband across the nation,” the then-treasurer said on budget night.
Almost eerily, 16 years later, the language and aims of Swan align with those of Chalmers, but the audience has changed and Labor ears may want a different message.
