Frugal Jim’s ‘protein’ budget

Jim Chalmers’ third budget will be more ‘protein than carbs’. Picture: NCA NewsWire / Martin Ollman

Jim Chalmers’ declaration that his third budget will be more ‘protein than carbs’ – with no big cash splashes and solely focused on economics and not politics – hits all the talking points we’ve come to expect from Treasurers.

In a major speech on Thursday setting-out key priorities and principles for the May 14 budget, Chalmers amplifies his self-styled image as a fiscally responsible, frugal and disciplined keeper of the nation’s coffers.

Chalmers’ slogans, which we’ll hear on repeat over the next eight weeks, include: “our economic strategy will change a little but not a lot … a second surplus is in reach … there will not be big cash splashes in the budget, simple as that … any extra help will be targeted, responsible and affordable … our ‘cost-of-living’ tax cuts … we believe budgets should be shaped by the economic cycle not the electoral cycle”.

One-year out from the 2025 election, the Treasurer is fully aware about the importance of framing a budget that promotes Labor as a responsible economic manager. The 46-year-old is under pressure to paint a narrative that can be sold to households and businesses reeling from cost-of-living pressures and sky-high interest rates.

Chalmers needs to be careful he doesn’t over do it. He can’t suggest the Albanese government isn’t spending big, when it is. And the government has benefited greatly from bumper revenue windfalls, which will continue but at a smaller rate.

Big ticket budget items already announced in this cycle include major Defence spending increases responding to the Defence Strategic Review, paying the super guarantee on paid parental leave, multi-billion dollar Closing the Gap programs, the removal of 500 nuisance tariffs, a revamped stage three tax cuts and new Southeast Asia Economic Strategy.

Treasurer Jim Chalmers on an early morning jog near Parliament House, Canberra. Picture: NCA NewsWire / Martin Ollman

After a series of multi-billion dollar announcements in recent weeks, it’s hard to keep track of what’s new money, what’s old and what’s recycled from the Coalition era.

Despite Chalmers talking down major new spending measures in the May 14 budget, there will still be plenty in it and Labor is almost certain to bank a second consecutive surplus.

While Anthony Albanese has flagged a potential fourth budget ahead of a May 2025 election, Chalmers is under pressure to put in place substantial seed money in his third budget to drive Labor’s key policy agendas. Chalmers is expected to announce new clean energy incentives and critical infrastructure funding packages aimed at strengthening Australia’s supply chains and sovereign modern manufacturing base.

Instead of a sugar hit to accelerate economic growth, Chalmers is focused on longer-term investments supporting faster approvals processes, access to energy, better-trained workforces, more resilient supply chains and more effective screening of foreign investment.

“When we say we will go for growth we mean it. But we also mean sustainable growth. Think of it as protein, not carbs. By this I mean a bigger emphasis on foundations and drivers. That’s why the budget will be all about: A future made in Australia.”

The budget will also include additional cost-of-living measures focused on targeted supports for households and small business.

In his CEDA speech, Chalmers also revealed Treasury secretary Steven Kennedy – who he has forged a close relationship with – would be extended for five-years when his term ends in September. When his second term ends in 2029, the 32-year public service veteran will be the longest-serving Treasury secretary since the 1960s and fourth-longest serving since Federation.

If Labor wins the next election, and the Queenslander’s leadership ambitions are put on ice, Chalmers will have his key man in place until he can plot a path to the top.