Treasurer Jim Chalmers has revealed he will use the May budget to spearhead “a much bigger focus” on entrenched disadvantage in Australia’s most vulnerable communities to ensure people have better pathways to economic participation.
Chalmers told Guardian Australia’s politics podcast he was working with the social services minister, Amanda Rishworth, on a new package that would “identify some of the most vulnerable communities in our country, work out how to empower local leaders and pool our resources and make a meaningful difference to some on the entrenched disadvantage that’s in our country”.
The pre-budget signalling comes as Chalmers has penned an essay for the Monthly advocating what he terms a new “values-based capitalism” for Australia. Chalmers says the Albanese government’s core mission is to “redefine and reform our economy and institutions in ways that make our people and communities more resilient, and our society and democracy stronger as well”.
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The 6,000-word essay, to be published on Monday, argues economic inclusion is fundamental because it buttresses democratic stability in an age where populism and autocracy is on the march. To help combat a slide away from liberalism, the treasurer flags future co-investment with philanthropists and the private sector in “place-based initiatives where communities have the genuine input, local leadership, resources and authority to define a new and better future, especially for kids”.
Chalmers says his values-based capitalism is predicated on partnership between the public and private sectors rather than antagonism, and requires a renovation of institutions and regulatory frameworks so that capital can be deployed both for private profit and “public value in the for-purpose economy”.
The treasurer says the private sector remains key and central to achieving sustainable growth. Chalmers detects “a genuine appetite among so many forward-looking businesspeople and investors for something more aligned with their values, and our national goals”.
In an era where public investment is constrained by resurgent inflation and high debt, Chalmers says the government intends to pursue co-investment models in more areas of the economy, having already launched initiatives deploying Australia’s reserve of superannuation savings to expand the pool of affordable housing, and accelerate the rollout of clean energy.
Chalmers says he wants to expand the opportunity for “impact investing” across the social purpose economy – meaning the aged care, education and disability sectors.
In addition to pursuing social policy objectives, Chalmers says the government will press ahead with overhauling existing finance architecture, creating a “new taxonomy” to help investors “align their choices” with the government’s more ambitious emissions reduction targets.
This new regime, Chalmers says, will help clean energy businesses gain enough finance to grow, while helping regulators “stamp out greenwashing”. He says the planned overhaul will apply initially to climate related investments, but could be extended in time to boost Australia’s biodiversity goals.
The treasurer told Guardian Australia’s podcast addressing entrenched disadvantage was “a decade long passion” grounded in growing up in Logan – an outer urban area with pockets of socioeconomic disadvantage and the area he represents as a federal parliamentarian.
Chalmers said the best way to “shift the needle” was to “find out where those challenges are most acute”.
“I have always thought if I get a crack at a job like the one I have now, and I know Amanda [Rishworth] and others think the same way … the best way to shift the needle on entrenched disadvantage is to go where it is most prevalent,” the treasurer said.
“There’s a lot of great work going on around the community, in the philanthropic sector and in other places. We want to show some leadership here if we can … [and] this is something I care deeply about.
“You think about an unemployment rate of 3.5% – there are still people who are not accessing the opportunity of an economy that is creating the fastest jobs growth for the first six months of the Albanese government of any government on record.”
Asked whether keeping the Morrison government’s stage three tax cuts was consistent with his aspiration for values based capitalism, given the package makes Australia’s tax system less progressive, Chalmers said the May budget would align with Labor values. “I think what matters is what we do right across the budget”.
He said looming energy price relief would be targeted to Australians on fixed payments and low incomes. “That’s a demonstration of our values,” he said.