The Politics    Thursday, August 24, 2023

An immodest proposal

By Rachel Withers

Jim Chalmers is seen to the left of frame, pursing his lips.

Treasurer Jim Chalmers at the National Press Club in Canberra, August 24, 2023. Image © Mick Tsikas / AAP Images

The treasurer knows we need sweeping tax reform. Will he ever find the courage to do it?

Treasurer Jim Chalmers has released the sixth Intergenerational Report, and things are not looking great, intergenerationally speaking. For one, global warming will cost Australia up to $423 billion over the next 40 years (“finally found something more expensive than submarines,” quipped Climate 200’s Simon Holmes à Court), with massive economic pain predicted should warming exceed 2 degrees. For another, our ageing population is set to create major fiscal pressures, with increased spending on health and aged care, and a growing reliance on income tax paid by a smaller segment of the population (oh, and sluggish economic growth to boot). Launching the report, Chalmers said it showed a future we should be “optimistic about, but not complacent about”, noting the challenges ahead. “The critics out there who say we need to wait just don’t seem to get it,” the treasurer said, in what seemed a compelling message for the “steady as she goes” Albanese government. Indeed, Chalmers was unwilling to name any major remedies to our revenue “challenges”, noting that much of this would fall to future governments. But he choked up as he talked about his children. “The thing that justifies it in our minds, being away from our kids, is at least you’re trying to create something that you can give to them and be proud of,” he said. One can only assume his emotion came, in part, from knowing what needs to be done and yet being part of a government refusing to do it, terribly concerned as it is with staying in office.

Chalmer’s speech to the Press Club was deeply conflicting. Much of his rhetoric revolved around being brave, thinking ahead, hard choices and the contest of ideas. But he refused to talk about the big ideas needed to address the yawning gap between costs and revenue, and the unfairness of the status quo for future generations, failing to answer many questions. Labor had, after all, already ruled out major reform in the days prior. “Government sources” told the ABC yesterday that sweeping tax reform was off the table, with Labor preferring to make change in “bite-sized chunks”. “When you try to do everything at once, you run the risk of not doing much,” an anonymous source told the broadcaster. Speaking to 7.30 last night, the treasurer ruled out corporate tax reform – never mind that Labor’s national conference just added a vague commitment to “corporate tax reform” to the party platform, with CFMEU boss Zach Smith watering down his super profits motion. Speaking to RN this morning, Finance Minister Katy Gallagher echoed these messages, saying the report gave the government an opportunity to “calibrate and focus”, with an approach to tax reform that is “measured” and “modest”.

It’s understandable that the treasurer is afraid of putting tax-based solutions on the table. Despite a vague call from Nationals leader David Littleproud for a “mature conversation” about tax, the Liberals have been anything but mature. Shadow finance minister Jane Hume began accusing Labor of using the Intergenerational Report as a “Trojan horse for higher taxes” on Monday, before anyone so much as mentioned tax. (As with their complaints following March’s tax expenditure statement, the Libs are on the pre-emptive attack because they can see tax reform is justified.) Hume parroted today’s talking points on RN, telling host Patricia Karvelas that “when Labor say that tax reform needs to occur, what they essentially mean is higher taxes”. (It was no surprise that shadow treasurer Angus Taylor said the exact same thing over on News Breakfast.) Asked about Littleproud’s calls for a “mature conversation”, Hume claimed that “a mature conversation about tax should be about a lower, simpler and fairer tax system”. Because apparently a mature debate means only talking about solutions that Hume likes.

“Not thinking about the future should be disqualifying in my line of work,” said Chalmers today, in a dig at Angus Taylor. “What this comes down to is the country’s willingness to think about their own future,” he added, in one of his moments of calling for boldness. “Angus might not be able to think about two things at once, but I think the country can. And I think the government can.” The Albanese government is certainly thinking about two things at once: how to address our long-term fiscal challenges and how to stay in power. Unfortunately for younger generations, their concerns are a distant third for the Labor Party, with a government that offers empty rhetoric about hard choices while making none of its own.

Rachel Withers

Rachel Withers is the contributing editor of The Politics.


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