Shadow Treasurer Jim Chalmers: budget a “missed opportunity” to shape Australia’s economic future

Shadow Treasurer Jim Chalmers told a CEDA livestream audience that one of the biggest gaps in the Federal Budget was “a story about where the economy is heading and where people fit into that story”.

Acknowledging CEDA’s tradition of finding common ground in policy debates, Dr Chalmers began by highlighting what he sees as the positive aspects of the Federal Budget.

“Some of the initiatives around tax and loss carry-back, something that we have been talking about and calling for; clearly there is a need for some kind of investment incentive, recognising that investment hasn’t been that great even before COVID; and we have also supported the first two stages of the Government’s income tax cuts, recognising that there is a need to get more spending power in the economy and that in our view that should prioritise in the first instance people on low and middle incomes,” Dr Chalmers said. 

“What we have tried to do all throughout this crisis is to agree where we can and only disagree where we must.”

Dr Chalmers said despite these points of agreement, Labor saw many missed economic opportunities in the budget.

“There are two broad categories where we think that the Budget was a missed opportunity: I don’t think there was the right balance between short term and long term across the different opportunities to support the economy.

“The second critique is that I don’t think we are getting the bang for buck – or value for money – that we should be from such an extraordinary allocation of taxpayer dollars,” he said.

Dr Chalmers said a challenge of this magnitude “needs to be broken up into manageable pieces”. He identified “responding to the recession, kickstarting the recovery and reimaging the future so we can increase the speed limit of growth in the economy” as three of the key issues at stake.

“So the first set of issues we have with the Budget is that there was a bit of triage, there was a bit of recovery, but not enough in our view,” he said.

“And in my view the Budget was almost entirely silent on what comes next – what the economy looks like after the crisis, and how do we ensure that the economy is growing more strongly, more inclusively and more sustainably than it was before COVID-19.”

The Shadow Treasurer then discussed the question of “value for money” in the budget measures

“When you think about the multipliers, some of the things that we are discussing – social housing, child care, the care economy, energy modernisation – you get far more value for money than from some of the things the Government has proposed,” he said.

“What Anthony Albanese said was that this is a big opportunity, we recognise the need for borrowing but how do we invest that money more wisely?

“We talked about child care and workforce participation, which has a massive economic benefit but also good for families and particularly mums; how do we modernise the energy system so we can get that cheaper and cleaner energy into the system; how do we deal with public housing, particularly the maintenance side; and how do we get more of a training dividend out of the hundreds of billions of dollars that government spends on defense, rail infrastructure and other types of infrastructure, by guaranteeing that a portion of that workforce is made up of Australian apprentices.”

“When the Government has subsequent opportunities in the mid-year update in December and the budget in May, they may need to consider some of the things we’ve been putting forward.”

Watch the Shadow Treasurer answer questions from the CEDA community in CEDA's "One question with..." feature.