Jim Chalmers cools big spend rhetoric

Federal Treasurer Jim Chalmers. Picture: NCA NewsWire / Martin Ollman

Anthony Albanese last week announced with much fanfare a big government approach to the great economic transition.

Jim Chalmers, it appears, is slightly less enthusiastic about playing up the role of the state.

The two may be on the same page in writing the Future Made in Australia manifesto but they appear to have different scripts for how it is to be interpreted.

On Wednesday, the government will announce the first instalment under this new banner by announcing $600m in government loans for critical minerals development.

This is significant money, underwritten by taxpayers.

The Prime Minister made it clear in his speech that fulfilment of the Labor project would require the guiding hand of government rather than the “invisible hand” of market forces. “We need to be clear-eyed about the economics of this decade, recognising that the game has changed – and the role of government needs to evolve,” he said last Thursday.

“Government needs to be more strategic, more sophisticated and a more constructive contributor; we need sharper elbows when it comes to marking out our national interest; and we need to be willing to break with old orthodoxies and pull new ­levers to advance the national ­interest.”

The Treasurer, in The Australian on Wednesday, has softened that clarion call by claiming government’s role will be only a “tiny sliver” of what private enterprise will be required to do.

The difference in language may be subtle, but there is a clear intention by Chalmers to wind back the big government/big spending rhetoric.

“Public investment is a key part of our focus here but not the only or biggest part,” Chalmers says. “The May budget will ­include significant new public investments, but our aim is to in­centivise the private sector, not replace it.

“Anything the government does will only ever be a tiny sliver of what’s needed. Private investment will and should continue to do most of the heavy lifting.”

Albanese’s framing has been strong on the role of the state, and the leveraging of taxpayer subsidies. Chalmers, on the other hand, has now sought to downplay the burden on taxpayers.

He is clearly concerned about the politics of an off-budget investment program funnelling billions of dollars into hand-picked projects while he is trying to cool the heels of colleagues who want money thrown at the cost-of-­living crisis.

“The Future Made in Australia Act will establish and impose very strict policy frameworks and institutional arrangements to ensure our priorities are rigorously determined and robustly implemented, focused on where we have genuine economic advantages and compelling national security imperatives,” Chalmers says.

“In other words, this won’t be a free-for-all of taxpayer funds.”