‘Triple M’ Jim Chalmers on path to election renewal

Jim Chalmers pledges a greater emphasis on reform in the 17-month run home to the poll under a three-Ms platform – modernisation, maximisation and middle Australia.

Treasurer Jim Chalmers has signalled a ‘greater emphasis on renew and reform, not just repair and restore’ in the second half of the Albanese government’s first term. Picture: Martin Ollman/NCA NewsWire

Jim Chalmers has promised greater emphasis on renewal and reform in the 17-month run to the 2025 election under a platform of three Ms – modernisation, maximisation and middle Australia – aimed at reassuring disillusioned voters.

Ahead of the mid-year budget update on Wednesday, the Treasurer has mapped out reform priorities that would ensure middle Australia and industries are “beneficiaries not victims of the big changes and challenges and chances before us”.

Dr Chalmers’ pledge comes as Finance Minister Katy Gallagher will reveal on Tuesday that the mid-year economic and fiscal ­outlook includes $9.8bn in ­“savings and reprioritisations”, bringing the total since the 2022 election to $49.6bn. While savings have been banked, billions of dollars have been reprioritised across the budget.

Dr Chalmers’ modernisation push, channelling British Labour hero Tony Blair’s reform mantra, comes as the Albanese government seeks clearer focus in selling its economic reform agenda to households reeling from 13 rate hikes and rising cost-of-living pressures.

After Paul Keating in The Weekend Australian urged the federal government to be brave, take policy risks and pursue bold reform in the national interest, Dr Chalmers says “our reform agenda has one overarching objective: to modernise our economy”.

“This is how we maximise our advantages and benefit middle Australia. It’s how we make our people and industries the primary beneficiaries of big changes underway in our society and economy,” says Dr Chalmers, writing in The Australian.

“In my Treasury portfolio, the halfway point of our term also marks a greater emphasis on renew and reform, not just repair and restore. This means striking a new balance between cleaning up the mess and building a better future.”

Seeking to sharpen the government’s economic narrative, Dr Chalmers in his piece – titled Labor’s North Star: a more modern economy for middle Australia – says “modernising our economy and maximising our advantages is not about pursuing reform for its own sake”. “It’s to make our economy more productive, more competitive and more dynamic,” he writes. “This is how we can lift living standards and create more opportunities for more people in more parts of our country, and ensure our people are and industries are beneficiaries not victims of the big changes and challenges and chances before us, in the year, and years, ahead.”

Labor’s reforms focus on modernising the energy system, technological infrastructure, human capital, supply chains and trading relationships, economic institutions, capital flows, markets, superannuation and tax systems and housing stock as well as broadening and deepening the industrial base.

Dr Chalmers said MYEFO would reveal “much smaller deficits, which means far less debt and tens of billions of dollars saved in interest costs”.

The budget update is expected to indicate the government is on track to deliver a second surplus on May 14 despite higher ­interest rates driving up borrowing costs by an extra $80bn over the decade.

Senator Gallagher on Tuesday will reveal an additional $5.2bn of “unavoidable spending” in MYEFO, including $1.5bn in lost tax revenue by ending pandemic event visas, $22m in response to the Robodebt Royal Commission, $392m on Covid-19 spending and ongoing aged care support and $254m to address biosecurity risks including fire ants.

The Australian understands a sizeable portion of the spending relates to the decommissioning of the 274m Northern Endeavour floating production storage and offtake facility and remediation of the Laminaria and Corallina oilfields.

“We are continuing to show restraint and to find savings and reprioritisations to account for new spending, some of which is unavoidable,” Senator Gallagher said.

“We know households are doing it tough at the moment and our responsible approach will ensure we are not putting upwards pressure on inflation.”

Under pressure over national security and consecutive polls showing a plunge in support for Labor and Anthony Albanese since the voice referendum defeat, the government is moving to amplify its economic performance as inflation moderates, wages tick-up and unemployment remains historically low.

As Labor backbenchers push to widen targeted relief for households ahead of the May budget amid fears the government is struggling to sell its $23bn cost-of-living plan, Dr Chalmers says “we acknowledge people are still doing it very tough because of higher interest rates and international uncertainty”.

“But important, welcome and encouraging progress has been made on inflation, the budget and the economy more broadly, even as last week’s national accounts show it slowing in expected ways,” he writes. “Inflation is moderating, wages are growing, and we’ve seen two consecutive quarters of real wages growth. The gender pay gap is now the smallest it’s ever been. Unemployment has a three in front of it despite record labour market participation.”

In an interview with The Weekend Australian to mark the 40th anniversary of the float of the Australian dollar, Mr Keating said voters would reward politicians who pursue bold reform in the national interest. “You’ve got to be brave in these jobs, you know, because the worst that can happen to you is you lose the job,” the former Labor prime minister and treasurer said.

Dr Chalmers – viewed as a future Labor leader – says “everything we do is about making our economy more modern”. He lists 10 key reform areas the government is focused on including support for the energy transition, critical minerals, the National Reconstruction Fund, unclogging the infrastructure pipeline, upskilling Australians, upgrading payments systems and overhauling super tax concessions, multinational tax and the petroleum resource rent tax.