Jim Chalmers shows with this housing policy that he is not afraid to bend the rules to win

Jim Chalmers in question time on Tuesday. Picture: NewsWire / Martin Ollman

Jim Chalmers is again proposing an intervention to make the economy “kinder”, to buttress Labor support and help reach the Albanese government’s promised economic targets, particularly on housing construction.

As a Treasurer who vows to make the “economy work for people and not make people work for the economy” and as the man responsible for delivering a re-election campaign based on cost-of-living relief, cutting inflation and easing the housing crisis, Chalmers has shown he’s not afraid to spend taxpayers money or bend the rules to achieve a political end.

Like his old hero, Paul Keating, Chalmers hasn’t seen an economic lever he’s not prepared to pull.

Last year Chalmers up-ended previous Labor declarations, scrapped the legislated stage three tax cuts for higher-income earners and announced “tax cuts for everyone” with the big winners being those on lower incomes. In the budget, he introduced a $300-a-year energy bill rebate which had the economic bonus of artificially lowering headline inflation and increasing the chance of an interest-rate cut.

Now, after months of discussion and planning, Chalmers has eased the prudential guidelines for bank loans and directly leaned on bank CEOs to boost home loans and the construction to provide even more assistance for almost three million, predominantly young, people who have already been promised a cut of $20,000 in student loans to buy a house.

As well, Chalmers wants small developers to be given more leeway when seeking loans and easing the prudential pressure on banks “through clarification” of guidelines governing the ratio of pre-sold units in a block.

Essentially Chalmers has tried to make it easier for people with a university HELP debt to get a loan from the bank to back the proposed $20bn cut in student loans by getting the banks to treat the student debt differently. This is a double boost for Labor’s appeal to younger voters and an attempt to get younger people into home ownership. Chalmers is telling the banks to treat the HELP cohort differently.

The effective easing of pre-sale requirements for smaller developments is also a double boost aimed at smaller builders and building towards Labor’s 1.2 million news houses. Chalmers has squeezed around the prudential rules so heavily reinforced after the global financial crisis – which had its origins in Bill Clinton’s plans to get people on lower incomes into housing. Previously, banks warned of the dangers of putting people with student debts who can’t really afford a mortgage at financial risk.

There’s virtually no cost to the budget in these measures and they will be attractive to young people and smaller builders, which will boost Labor’s stocks. Chalmers isn’t giving up on his economic re-election plan.