Careful Jim Chalmers fails to deliver the economic boost needed

Treasurer Jim Chalmers in Adelaide on Monday. Picture: NCA NewsWIRE / Emma Brasier

Jim Chalmers’ Employment White Paper and Intergenerational Report failed to coherently outline serious reforms that would fundamentally reshape Australia’s economy and shield the nation from falling behind.

Labor’s key economic blueprints released in the past month promised to lead the nation forward and present bold ideas to shake up the status quo and forge a path in the face of unprecedented technological transformation and global competition.

As Anthony Albanese’s successor-in-waiting, and after almost a decade of Coalition rule, you can understand the careful and safe approach adopted by Chalmers. The government is desperate to avoid the pitfalls of Kevin Rudd and Chalmers’ mentor Wayne Swan in going too hard, too quickly.

The 45-year-old, who last week unveiled a $22.1bn surplus driven by resources exports and the post-pandemic bounce back, is reaching a point where he needs to unveil an ambitious reform agenda that is not limited to policies formed in opposition.

Under the backdrop of the Indigenous voice referendum and with households feeling the pinch of higher mortgage repayments, groceries, fuel and energy bills, Chalmers is seeking to avoid major economic reform outside Labor’s election manifesto. That means no major tax reform and no action to slash red and green tape. Instead, we hear a lot about the renewables revolution, off-budget funds and reviews into policies and decisions that modern politicians ­prefer to avoid.

With Workplace Relations Minister Tony Burke on leave, Chalmers copped the fury of business leaders and employers who have gone to war over the government’s industrial relations overhaul. Putting aside the irony that the same industry leaders attended last year’s jobs and skills summit and cosied up to Labor before and after the election, Chalmers has been left to hold the can.

The influence of unions is writ large in most of the government’s major decisions and policy formation. The white paper also pays homage to the “full employment definition” obsession of union leaders.

For the first time since the Hawke-Keating era, Chalmers has opted to drive a wedge ­between the policy settings of the government and the RBA.

The orthodoxy is that you need a certain level of unemployment to keep inflation within the RBA’s 2-to-3 per cent target. This is undermined by Chalmers effectively backing the union push for every Australian to have a job.

By deviating from the RBA’s scientific method of calculating full employment, the government risks making people poorer through higher inflation.