Jim Chalmers says May budget to have ‘much bigger focus’ on tackling entrenched disadvantage

Exclusive: Treasurer says ‘best way to shift the needle’ is to ‘find out where those challenges are most acute’, and ‘this is something I care deeply about’

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”.

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.


Katharine Murphy Political editor

The GuardianTramp

Related Content

Article image
Children in Australia’s poorest households have about 10% chance of becoming top earners
Treasury research finds most severe poverty is ‘particularly entrenched’ but children far more likely to progress than in US

Paul Karp

12, Jan, 2023 @2:00 PM

Article image
Reserve Bank review ‘will be relevant’ to Philip Lowe’s chances of a second term, Chalmers says
Treasurer says it is not a ‘performance review’ but will ‘feed into our thinking’ about RBA leadership

Amy Remeikis

07, Dec, 2022 @11:10 PM

Article image
Treasurers’ pledge to ‘end the super wars’ likely to fuel fears of tax concession crackdown
Treasurer proposes to enshrine in law a new definition of super to guide future policy decisions

Daniel Hurst

19, Feb, 2023 @2:00 PM

Article image
Chalmers offensive: crunch time as treasurer faces first federal budget | Katharine Murphy
A volatile global economy looms as Jim Chalmers assembles the Albanese government’s inaugural budget, where he will be judged on delivering on election promises while exercising restraint

Katharine Murphy Political editor

21, Oct, 2022 @7:00 PM

Article image
Treasurer Jim Chalmers warns of ‘dire’ budget situation as inflation soars
Labor says deficit could blow out further while accusing the Coalition of failing to disclose budgetary pressures

Paul Karp

25, May, 2022 @8:37 AM

Article image
Federal budget 2022: Jim Chalmers heralds budget of ‘restraint’ while warning of risks ahead for households
Treasurer flags need for tax reform to put economy on more sustainable path and further intervention in energy sector amid soaring prices

Sarah Martin Chief political correspondent

25, Oct, 2022 @8:41 AM

Article image
Jim Chalmers warns not to expect budget surplus as treasury forecasts ‘difficult decisions’ ahead
Treasurer says it will take more than one budget to turn the Australian economy around amid a deteriorating global market

Sarah Martin Chief political correspondent

28, Sep, 2022 @7:43 AM

Article image
Superannuation tax changes on the table as treasurer calls for ‘national conversation’ on cost
Jim Chalmers says Labor has not changed its position but had to acknowledge ‘pressures on the budget’

Amy Remeikis

21, Feb, 2023 @11:38 PM

Article image
Jim Chalmers says it’s absurd to expect him to copy Paul Keating as critics lash values-based capitalism essay
Treasurer says 2023 priorities include cost-of-living relief, a tax expenditure statement and the intergenerational report and wellbeing framework

Katharine Murphy Political editor

05, Feb, 2023 @5:46 AM

Article image
Liberal MPs break ranks to back Jim Chalmers’ discussion on superannuation reform
Angus Taylor says Coalition will fight any changes but Tasmanian MP Bridget Archer says we should not ‘shy away from having a conversation’

Katharine Murphy Political editor

27, Feb, 2023 @9:36 AM