Australia’s new treasurer sees worst case scenario since WWII

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By Michael Heath

(Bloomberg) –

Jim Chalmers, Australia’s incoming treasurer, said he was facing “the most difficult economic situation inherited by an incoming government since World War II”.

Although unemployment at a 50-year low suggests that characterization is about reducing expectations rather than reflecting economic realities, he faces significant challenges. Real wages are falling the most in more than two decades, with the central bank raising interest rates for the first time since 2010 and deepening the post-epidemic budget deficit and pushing national debt to A $ 1 trillion ($ 700 billion).

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Then there is the darkening offshore environment with China, Australia’s main trading partner, slowing down due to virus-induced lockdowns and the rise in global inflation due to the war in Eastern Europe. Owen Swann, who served as treasurer of the Labor government most of the time from 2007-2013, said his former adviser would do the job.

Swann said in an interview that “he has more experience coming to this job than anyone with a living memory and it should serve the country well.”

Chalmers, 44, has been advising Swan for most of the time, including the 2008 global financial crisis and China’s widespread stimulus response. He sat down with Swann at a key meeting of the era, when Australia’s mining boom was also rekindled and triggered the Reserve Bank’s previous austerity cycle.

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The 2007-2013 Labor administration was also immersed in climate change policy, including the enactment of a carbon tax law, so Chalmar is adept at debating carbon emissions. These include the important economies of change of power – and politics – 6

He is a modern political model: highly educated, he served as Swan’s political adviser to a senior minister before graduating in 2013 to secure his seat in parliament, and then moved to the shadow ministry. It follows a similar path to its immediate predecessor, Josh Friedenberg of the center-right coalition, who lost his seat and his ministry in Saturday’s ballot.

Critics of this professional class see its members as lacking in real-world experience and more prone to point scoring associated with university politics.

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“It’s a double-edged sword,” said Jareh Gazarian, a Melbourne-based professor at Monash University’s School of Political and Social Inquiry.

On the positive side, these “professionals” come to the job with experience in the political field, they are familiar with the settings and methods and they can move forward with it, he said.

“The challenge is that they can come from other roles in other workplaces without much practical experience and this sees them out of touch and limits their potential for good public policy,” he said.

Chalmers holds a PhD in political science from the Australian National University, and his doctoral thesis was on the prime ministership of Paul Keating, who led the country from late 1991 to early 1996. That’s after Keating’s eight years as treasurer, when he took over. Floating currencies, removing tariff barriers and freeing up financial markets.

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Chalmer’s thesis was titled “Broiler Statesman”, reflecting Keating’s ruthless domination of the parliamentary chamber. At the same time, Keating sought to rebuild Australia’s economy and lead the nation toward security in Asia, taking over as prime minister during the collapse of the Soviet Union and the end of the Cold War.

Chalmars is a Keating fan and speaks regularly with the Septuagint former leader. Yet Keating’s specialty was his position in pursuit of change and sometimes even his office willingness to keep both in line. Many of these risks have since been repaid and exacerbated by the former prime minister.

Little In Chalmer’s biography, or biography of most modern professional politicians, suggests a desire to take a chance on their careers.

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“Keating was treasurer and then prime minister three decades ago. It was a different world, “said Ghazarian. “You cannot imitate what these former leaders have done. It’s important to consult these people with experience, good political instincts, etc., but you can’t rebuild a different era. “

One of Chalmer’s perceived strengths is a working-class district southwest of Brisbane, where he was born and raised and now survives, Rankin has a strong bond with his constituents. This gives him a link to the voters he represents.

Keating, in a profile of Chalmer in the Australian newspaper two years ago, highlighted the similarities with his own background in the West Sydney suburb of Bankstown. He argued that your birth and descent represents a region that stands as a treasurer in a good position for voters to understand.

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