Chalmers in Bangkok While Home Front Heats Up

Jim Chalmers was in Bangkok for a thirteen‑hour meeting with finance ministers and central bank leaders from around the world. The talks happened just after the IMF warned that the global economy could soon be pushed to its limits. Even though the weather was hot and sticky, being away from Canberra probably felt like a break for him.

Back home, the treasurer is dealing with stubborn inflation and higher interest rates. He had to deny that he was pressured by Prime Minister Albanese over a tax office ban on using credit cards for payments. A senior Labor member said the warm feeling the government had after the election is turning into heat. The government tried to sell big tax changes like capital gains tax and negative gearing, but ran into strong pushback before striking a deal with the Greens. Mistakes in the draft, such as the so‑called widow’s tax and applying the rules outside housing, made it hard to explain the idea of fairness between generations. By September the Reserve Bank lifted rates to a fifteen‑year high, forcing Chalmers and Albanese to defend a government spending rate that is now at a forty‑year high outside the pandemic, up 4.3% in real terms last year. The RBA governor, Michele Bullock, said inflation is mainly coming from domestic capacity pressures, with price jumps from the Middle East war adding to the home‑grown pressure.

The government is still pushing for a new minimum tax on trusts and wants to change the private health insurance rebate for older Australians. Halfway through the parliamentary term, some Labor MPs are quietly wondering if the party’s political strategy is working, especially as commentators compare the current slump to the mood after the voice to parliament referendum loss three years ago. Anger over the ATO’s credit card ban and a slow response made things feel scrappy. Albanese was criticised for a smaller‑than‑expected pre‑Cop meeting in the Pacific and has not held a press conference since October 1. One Labor MP said they should have seen this coming, noting they have heard from upset small‑business owners in outer suburbs. Another MP complained that too much secrecy surrounds reform plans before the budget, saying the habit of announcing first and thinking later comes with a cost.

Chalmers is known as one of the government’s best communicators and is seen as a possible future leader. The Albanese government’s first four years have been marked by cohesion, so any sign of internal disagreement stands out. This week, members of Labor’s NSW right faction met at Parliament House to talk about the risk of alienating small business. The attorney general, Michelle Rowland, was among those voicing concern, according to the Financial Review. Frontbenchers Kristy McBain and Andrew Charlton also joined the discussion.