There has perhaps never been a more fortunate treasurer in Australia’s political history than Jim Chalmers. In a week where a sharp rise in inflation should have put Australia’s declining living standards front and centre, all eyes were on the woes and leadership struggles of the Liberal and National parties.
For years, the Albanese government has spun a line claiming they have improved the budgetary position after the end of the Morrison government and that every dollar they spend is fiscally sound and part of the battle against inflation.
The first claim is technically true but highly misleading. Any budgetary improvement since 2022 is only because Labor won government after a period of heavy spending attributed the pandemic.
While some were calling for government restraint during the pandemic, including the Institute of Public Affairs, Jim Chalmers was not among them. As shadow treasurer he cried out for yet more spending, meaning his subsequent argument is at best disingenuous.
As for the oxymoronic argument that the Albanese government’s spending has been fighting inflation, well, the proof is in the pudding. As the Australian Bureau of Statistics revealed on Wednesday, annual inflation rose to 3.8 per cent in December, from 3.4 per cent, raising the likelihood of a cash rate increase.
A significant reason why inflation remains persistent is government spending. As a nation we are about to reach $1 trillion in gross debt, and federal government spending as a share of the economy is about to exceed 27 per cent, higher than any point, bar Covid, since the mid-1980s.
This record spending has resulted in the crowding out of productive sectors in the economy. Research from the Institute of Public Affairs found that government spending at all levels accounted for 55 per cent of total GDP growth between June 2022 and 2024, all the while productivity has remained stagnant.
The combination of record levels of government spending and stagnating productivity is the perfect recipe for high and persistent inflation.
This is Jim Chalmers’ track record, yet the opposition – now in total disarray – can’t lay a hand on him.
While Nationals’ leader David Littleproud did the right thing for his party by temporarily splitting from the Coalition, it does leave the Australian public without a functioning opposition; it is one now distracted to the point of incoherence.
The Nationals have been driving what little opposition there has been to the Albanese government since 2022. Remember it was the Nationals who opposed the Voice, months before the Liberals. And it was the Nationals who dragged the Liberals, kicking and screaming, into opposing net zero last year.
Everyday Australians can’t afford the excesses of Jim Chalmers much longer. They need and deserve an alternative.
