Budget: Labor’s Chalmers takes the fiscal fight to Frydenberg

Jim Chalmers will deliver a ‘proper’ second budget this year if Labor is elected, but will endorse the government’s plan to fix the budget by growing the economy.

Opposition Treasury spokesman Jim Chalmers. Picture: NCA NewsWire/ David Crosling

Opposition Treasury spokesman Jim Chalmers will deliver a budget this year if Labor is elected, one which will “look at the full extent of nearly a decade of rorts and waste and start dealing with it”.

In a pre-budget speech to the Australian Chamber of Commerce and Industry on Tuesday, Dr Chalmers will challenge Josh Frydenberg to at least three debates on the economy ahead of the federal election.

He will also lay out his party’s four-part fiscal strategy, with Labor sharing the Coalition’s mission to fix the budget by growing the economy in the wake of the global pandemic. Dr Chalmers will also argue that Labor would secure a higher return on public investment, end wasteful spending and force multinationals to pay more tax.

“Our guiding light is the quality of spending, not just quantity,” he will say.

“We acknowledge that the best way to fix the budget is to grow the economy and create more jobs.

“Our fiscal strategy recognises now is not the time to flick the switch to austerity.

“Nor is it time to spray money around unnecessarily. That this needs to be a private sector-led recovery is not contested.”

While not offering a sharp alternative towards the nation’s finances out of the pandemic to the Coalition, the would-be treasurer will warn of the dangers of rising interest rates in the context of the nation’s record debt.

Labor’s four-part strategy will ensure quality of spending, “measured by the extent to which it delivers broader more sustainable growth, creates more jobs or supports more people”.

Dr Chalmers will pledge to “end the rorting and wasteful spending”.

“We will spend for maximum economic impact, community need, collaboration with other ­levels of government – and not via colour-coded spreadsheets against the advice of government departments,” he will say.

To raise revenue, “we will work with other countries to make big multinationals pay their fair share of tax in Australia where they make their profits”, he will say.

Dr Chalmers will also argue that money had been misspent through the pandemic, leaving “a trillion dollars in debt as a consequence, but with nowhere near enough to show for it”.

The opposition treasury spokesman will lay out Labor’s pitch to voters, centred on “skyrocketing costs of living and doing business”.

“I think the country is up for a different debate about budgets and how we measure progress, and that the days of being lectured on fiscal responsibility by our political opponents are well and truly over,” Dr Chalmers will say.

“No government since the war has gone to an election with a worse record on the budget.”

He will say the election should be “about falling real wages at the same time as skills shortages”, as he challenges the Treasurer “to at least three debates on the economy between the budget and the election”.

Dr Chalmers will say rising interest rates will be “inevitable … no matter who wins office”.

“Rising interest rates won’t just punch holes in family budgets, they’ll punch holes in the national budget too,” he said.

“If we were to pay 100 basis points more on our new and maturing debt, the commonwealth could be paying an extra $10bn in interest over the forward estimates.”

Dr Chalmers will highlight the policies Labor is taking into the election to ensure the economy is “stronger than it was before” the pandemic struck.

These include “plans for free TAFE, more university places, and sensible migration settings to address skills shortages”.

Others include “a more modern NBN, as part of a digital economy that helps people decide not just how they work but from where; economic reforms to create a bigger pool of available workers, by making childcare cheaper and more accessible; and partnerships on procurement and co-investment to make your supply chains more resilient and to create new jobs, new industries and more ­opportunities”.