r/AustralianPolitics

New piece on what ANZAC Day looked like yesterday. A man on bail for five counts of war crime murder got selfies at Currumbin Beach. An Indigenous veteran whose grandfather served at Beersheba got booed for a minute straight at Martin Place. Same thing happened in Melbourne and Perth. Interested to hear what people think about where the day is heading.

1. Promise 60% affordable units
2. Get exemption to height restriction
3. Build units
4. Reduce proportion of affordable units
5. Profit!!!

This, in my view, is a no-brainer.

All budgets seem important at the time. But not all budgets, and not all treasurers, leave a lasting legacy. Not everyone will remember the centrepiece of last year’s budget – the cost of living – but few can forget former treasurer Joe Hockey’s disastrous, cigar-smoking train wreck in 2014. Likewise, whether they remember it or not, millions of Australians every day enjoy the benefits of the Medicare levy that Paul Keating announced in his first budget in 1983.

With his fifth budget, on May 12, Jim Chalmers is attempting to establish his legacy in the midst of exceptional geopolitical upheaval. With the Iran war, the ensuing supply shock and now the prospect of a deepening cost-of-living crisis, this treasurer has to deal with a range of pressures he didn’t expect while pursuing the reform agenda he has been planning for years.

Nevertheless, he tells The Saturday Paper this week, “It will be an ambitious budget that balances the pressures of the here and now with the demands and obligations of the future.

“As the war continues and new data comes in, we’re crunching and recrunching the numbers to feed into our deliberations and decisions,” says Chalmers. “The story of the last two decades is, every time the global economy starts to build momentum something comes along to disrupt it.

“Every budget is calibrated for the conditions [of the time] but what makes this one different is the more extreme degree of international uncertainty.”

Even under more normal circumstances, the pressure in the lead-up to a budget is enormous. While much is written about the long days and nights, the real pressure is in the fact that budgets spell out, with decimal-place accuracy, who wins and who loses. Every dollar the treasurer gives to one group is a dollar taken from another or added to the deficit. Every other day of the year, government MPs tell every industry and non-government organisation they’re a priority, and once a year it’s the job of the treasurer to tell us the truth.

With the frustrations of younger voters clearly in mind, Chalmers says that this budget will have “a focus on intergenerational issues, and new efforts to boost productivity, find savings and lift the speed limit of our economy”. Just how difficult the economic circumstances and just how ambitious the budget will be will be determined over the course of the next two weeks.

At least the domestic political pressures look weaker than they have in the past. Amid the Coalition’s unravelling, Labor has succeeded in convincing voters it is the more credible steward of the economy. Nevertheless, Commonwealth debt is close to $1 trillion, and while the extra zero is of little economic significance, if the Liberal Party can get their act together it could be a potent political weapon.

“We’re big believers in the NDIS, we’ll always back it, and that’s what this is about. It means more certainty and sustainability of services ...”

The ascendance of One Nation in the polls suggests voters are more than ever willing to embrace populist, if not far-right, solutions to the inequities they experience. While Pauline Hanson validates voter frustrations, only a government can deliver solutions, which means it’s a brave government that pursues a timid agenda.

Like most voters in the world’s remaining democracies, Australians want change. Decades of trickle-down economics have led to lower real wages and rising inequality. While Labor went to the 2025 election with a cautious agenda, they won with a wide landslide. They now govern a country united by little except a rising resentment that ordinary people are yet again being asked to tighten their belts.

What we know of this budget so far is that Labor is looking to tackle housing affordability, and is considering significant changes to capital gains tax concessions and negative gearing.

The government has also hinted at changes to the mining industry’s diesel fuel subsidies. It was no accident that the prime minister’s office leaked his request to Treasury for new options for taxing gas exports. All of those revenue measures would engage powerful interest groups.

Invoking an earlier attempt to stake out an ambitious agenda, Chalmers says the budget “will keep faith with all the effort that went into the reform roundtable; in fact, the major themes hew really closely to the outcomes of those good discussions in the cabinet room, even with everything that’s happened since”.

Last year’s economic reform roundtable seemed like a dull affair dominated by business leaders droning on about the need for productivity growth, by which they meant industrial relations reforms that are good for them and wage cuts that are bad for workers. What few saw was that the treasurer was making space for reforms of his own.

The calls from chief executives for a wide range of big policy changes that weren’t mentioned in the 2025 election drowned out the previous calls for Labor to only pursue issues for which they had an “electoral mandate”. While there is opposition to the government’s mooted changes to capital gains tax, no one is arguing they can’t do it because they didn’t take a plan to the 2025 election.

Likewise, this week’s big changes to the National Disability Insurance Scheme weren’t costed before the last election, but not a single journalist saw that at as a problem when Mark Butler fronted the press club on Wednesday. In defence of the plan, to be detailed in the budget, to slash the annual growth in NDIS spending from an 8 per cent target to just 2 per cent over the next four years, the treasurer says, “After a decade of exploitation under our predecessors, the NDIS was out of control. Our reforms are about making vital services for vulnerable Australians more sustainable.

“We’re big believers in the NDIS, we’ll always back it, and that’s what this is about. It means more certainty and sustainability of services that Australians rely on. Reforming the NDIS is the responsible thing to do from a fiscal perspective, and the responsible thing to do for people with a disability.”

Budgets are always about belt-tightening, and there is no doubt that the NDIS needs major reform, but budgets that are only about belt tightening don’t leave legacies, and in this climate there is a real risk that saving money will cost a lot of votes.

Labor knows how to wedge the Liberals, who struggle to oppose spending cuts. With One Nation now outpolling them, however, the real risk to Labor is that their “sensible” budget strategy is “crazy brave” politics. It is a big mistake to think that supporters of Pauline Hanson don’t support “left-wing” policies such as gas export taxes and wealth taxes.

At the same time, ambitious reform for future generations – especially in the context of a global fuel crisis – needs to take account of the economic impact of climate change, and support measures to address it.

While Liberal MP Andrew Hastie has leaned hard into the need to revitalise Australian manufacturing, with an emphasis on fossil fuels, it’s still unclear what provisions the budget will make to further Labor’s vision for the green transition under its Future Made in Australia platform.

The new reality the Albanese government is struggling with is that government spending is popular, and it’s not just the so-called left that wants more cash for their cause. The frigates, drones and cruise missiles that the defence establishment and the United States government want us to buy are expensive, and they add to the $360 billion outlay on AUKUS submarines. Defence spending can only be funded through new taxes, new spending cuts or new debt, which is why the weeks leading up to budget are so high pressure.

That said, one way to avoid the brutal consequences for the national deficit of spending an extra $53 billion on defence is to claim the spending is “off budget” – that is, it will be allocated to government “special vehicles” and supplemented by private investment. This likelihood has already been flagged for the upcoming budget.

This is like the argument that calories in broken biscuits don’t count, or that what happens in Vegas stays in Vegas. The idea that designating spending as “off budget” means it doesn’t count is as meaningless to an independent observer as it is reassuring to the politician declaring it.

The International Monetary Fund has recently called Australia out for a lack of budget transparency, and while this budget will no doubt include some accounting tricks, in the long run the tricks don’t save money, and they don’t add up to a legacy. 

Chalmers has just a couple more weeks to consider how he wants that legacy to take shape, and he’s clear that it won’t be defined by its context.

“We don’t choose the circumstances here but we choose how to respond to them, and I think it’s shaping up pretty well so far with a couple of weeks to go,” he says.

“We’re hostage to decisions taken in DC, Tehran and Tel Aviv. We’ll respond to the conditions as we find them, but we’ll look beyond this crisis too.”

Tens of millions of Australians are hoping he does.