December 2022 – January 2023


Jim Chalmers’ moment

By Dennis Glover
Treasurer Jim Chalmers, November 9, 2022

Treasurer Jim Chalmers, November 9, 2022. © Lukas Coch / AAP Images

How an understanding of history would prepare our economic leaders to lay the groundwork for the future

There are times in history when the political messages will do: keep your election promises, cut taxes, mention “productivity” a lot… These are the good years to govern. They are easy, sleepy, rewarded by the electorate. Just ask John Howard and Peter Costello. At such times, everyone in government is happy – except the speechwriters. What’s there to write except “You’ve never had it so good”?

Then there are times when everything suddenly goes wrong. Times when all those warnings complacently ignored for so long come to pass. Times dominated by black swan events. At such times, the speechwriters quietly close their doors, do fist pumps and rejoice. This, they think, is my big chance.

Quoting Winston Churchill is always cheap, I know. He could be a complete shit, and got many things wrong, but he was his own speechwriter and, gee, he was good. This is what he said when arguing for a change of national policy at the end of 1936, just as the destabilising effects of the Great Depression and Hitler’s aggression could no longer be ignored: “The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to its close. In its place we are entering a period of consequences.” Churchill nailed it, as they say now, demonstrating that the most important skill of any politician and speechwriter is understanding the moment.

Treasurer Jim Chalmers finds himself in a similar historical moment, with global recession looming, and Vladimir Putin and Xi Jinping rattling their missiles, not to mention the addition of climate change causing global mayhem.

At the beginning of this election year things were looking reasonably positive for our young about-to-be treasurer and his fellow shadow ministers. Sure, the COVID-19 response had piled up all that debt and deficit, but at least interest rates and unemployment were low to non-existent, real wages seemed about to increase and we actually wanted a bit of inflation. (Yeah, I know – hard to believe, isn’t it?) There was no European war yet. Okay, Taiwan was under threat, as always, but there were still no B-52s flying into Darwin, just in case. There was also no major European drought, no third consecutive La Niña event in Australia causing major flooding. And because none of this was fully foreseeable back in January, policies that now seem extravagant and out of place were signed off by Labor’s campaigners.

We now know that history set them a neat trap, dropping the new government into a bucketful of consequences. So, what might have happened in the room when Chalmers, his colleagues, his economic officials and the government’s political staffers met to plan the October budget?

It’s not hard to guess what the speechwriters might have done. In their ideal world – The West Wing – they’d reach for their history books, looking for inspiration (while hiding their excitement behind suitably sullen faces, naturally). Back in 2008, when the global financial crisis landed in politicians’ in-trays, I was one of those speechwriters. I had been contracted to Treasury on the advice of a deputy chief of staff to then treasurer Wayne Swan – a nice young man named Chalmers.

The budget speech itself isn’t much of an occasion for historical reflection and political rhetoric; like a second-reading speech, it has a rather boring job to do, which is to outline the budget measures (a billion for this measure, two billion for that, paid for, naturally, by a crackdown on multinational tax evasion…). But the budget is actually a roadshow and there is scope for framing its real message in the many speeches that follow.

In 2008, the framing was straightforward, although it did require a certain amount of historical knowledge (which shouldn’t be assumed nowadays). It went something like this: weeks after its election in 1929, the Labor government led by James Scullin and his treasurer, Queenslander Ted Theodore, had been overwhelmed and eventually broken apart by the collapse of Wall Street. Unlike them, the Rudd cabinet had the policy tools and the steely resolve not to let economic catastrophe overwhelm Australia again. The times were terrifying, but history would not repeat.

The policy response would have been the same without the history lesson, but it helps for everyone to understand the big narrative arc. Wayne Swan still has plenty of detractors, but he will always have the knowledge that at the moment of consequence, he got it mostly right.

But, like I’ve said, invoking the 1930s is always easy.

Left to the speechwriter-historians, Chalmers’ first budget might have looked a lot different as it attempted to respond to new economic, security, energy and climate crises: cancelling the Morrison government’s legislated tax cuts and ditching expensive election spending promises, a Green New Deal, an unprecedented increase in defence spending. In other words, a dramatic policy switch that may have broken faith with the electorate.

Thankfully, maybe, it’s not just the speechwriter-historians sitting in the room when the action starts. They’re joined by the really influential people, the here-and-now crowd: the policy wonks, the political advisers, the media flacks and the nervous marginal-seat holders. And they would have been reminding everyone of the here-and-now realities, such as what happens when you slash hard and repudiate your election promises in your first budget. This was the lesson of 2014 when Joe Hockey’s budget backflip destroyed Tony Abbott’s government. And the lesson of just a few weeks ago when Liz Truss’s budget surprises destroyed her government within 45 days.

As it is, the first serious polling done after Chalmers’ budget showed that people weren’t overly joyous. They’ve been trained for so long to think that “good budget equals big handouts” that they thought it had little in it for them. In the face of this, you can see how easy it is for the pollsters (well-represented in the room) to convince our leaders to never ever take risks.

Instead, Chalmers addressed the need for fiscal restraint while still appealing to the electorate deftly, by focusing the budget on fighting inflation, but not so hard as to tip us into recession. This sort of pragmatic, halfway bet is probably all that is politically possible in the Australia of 2022, especially with a government only recently sworn in.

But what about Chalmers’ future economic policy? How might he begin to frame that? After all, global inflation, the energy crisis, global warming, Ukraine and Taiwan aren’t going to go away any time soon, at least not all at once.

Let me do the easy thing again and return to ideas of the 1930s.

Everyone has their dream job. I got mine in my mid twenties. Studying history at King’s College in Cambridge, I was asked to look after John Maynard Keynes’ book collection in return for beer money. (I would have done it for nothing, but I wasn’t going to tell them that.) Keynes was a serious bibliophile and seemed to have a first edition of every great book ever published. What’s more, he seemed to have read most of them. As part of the job, I got the key to his office, finding myself working at his desk, surrounded simultaneously by the foundational texts of modern liberal culture (a First Folio Shakespeare, for example) and by Keynes’ own economic papers.

It led me to realise a couple of important things. The first is that the really crucial ideas that our democracy depends upon to renew itself in the face of existential crises aren’t narrow and shallow and technocratic, unlike the economic and political solutions think-tank directors helpfully plot for us on PowerPoint slides. They are the product of deep understandings of history, politics and society.

The second is that the economic policies and institutions developed to respond to the economic and geopolitical crises of the interwar years were created by people with big minds and progressive intentions (such as Keynes, who today would be known as a highly cultured LGBTIQ warrior). They wanted to save the world from the populism that follows recessions. (Yes, from people like Donald Trump.) They had to devise a way to tackle the crises without further weakening people’s faith in democracy. They knew it would require a sharp break from old policy directions. And they also understood that they had to prepare people first – by being politically smart.

Maybe that is the task that today confronts our leaders and all those people still in the room as the Albanese government tries to give itself a purpose and a long-term future: to use their time in office intelligently by preparing people for change. To help people see with greater clarity that doing things differently is not only an inescapable necessity, it’s highly desirable. To make them see that, yes, maybe the world has changed significantly since last January and it’s sensible for our economic policy to change also. That we’d benefit from a fresh new look at Australia’s tax base and its spending priorities.

Echoing Churchill’s argument for change, Chalmers, in his budget, said that the days of ignoring electorally driven structural deficits are over, because their consequences have been exposed by global inflation. Armed with this message, he now has the opportunity to unite the people behind an effort to undo the last decade of complacency and drift.

This is Jim Chalmers’ moment.

Dennis Glover

Dennis Glover is a Melbourne-based journalist, novelist and speechwriter.

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