I asked the treasurer if we were up the creek? Here’s what he told me

April 5, 2026 — 5:00am

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Jim Chalmers has been the federal treasurer since the Labor government was elected in 2022. In May, he’ll hand down his fifth budget, a task given a significantly higher degree of difficulty because of recent events in the Middle East. I spoke to him on Tuesday.

Fitz: Treasurer, good to chat. Are we in deep shit?

JC: No, I don’t think so. But we’re being tested by these events from the other side of the world. I think we can get through it if we all work hard together, but it’s going to be a tough period, there’s no use beating around the bush about that.

Fitz: “Events from the other side of the world.” I know that Trump’s barking mad, and I suspect that you know that Trump is barking mad. But in your public commentary on him, are you comfortable saying that he’s not just a danger to shipping, but a danger to the world economy, or do you have to use weasel words?

JC: [Jocularly] Well, if those are my options, I think I’ll take option C! But, more seriously, the way I come at this is my focus is on the Australian people, and they didn’t choose this war, but they’re paying for it, right? And Australian families aren’t assembled around the table in the Situation Room, working out how this war plays out, but they are assembled around kitchen tables working out how they’ll pay the price for it. So from an economic point of view, the end of the war can’t come soon enough because it’s punishing Australians for a series of decisions that they didn’t take.

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Fitz: You say, however that despite the straitened circumstances – Hormuz Strait? – you’re still going to put out an ambitious budget on May 12. Is your ambition in the realms of extra expenditure, more cuts or structural reforms?

JC: We’ve got three main focuses. There’ll be spending cuts, as there have been in all of our budgets. And there will be tax reform. We’re still working through a big menu of options on tax reform, and we’ll whittle that down over the course of the next few weeks in the usual way. But we’ve also got to lift the speed limit on the economy ... to make sure the economy can grow quicker with lower inflation as we come out of this oil shock. And so there’ll be plenty of ambition in the budget. It’ll be about resilience and reform, not resilience or reform. The best way to understand the budget is it obviously will be about the pressures that people are under in the here and now because of this war in the Middle East, but it will balance that against some of our obligations to people in intergenerational terms.

Fitz: On that subject, it is surely clear to all that my Boomer generation – through a cosmic quirk or fortuitous timing – is generally generationally wealthier than both our parents and our children. It seems obvious to me the correct government policy is to do things like increase our tax on our untaxed income from super to maybe reduce the taxes on the next generations to even things out a bit. Is that obvious to you?

JC: Well, we made some changes in super, which were pretty contentious, but we’ve landed them now. They basically do as you describe, which is make the tax breaks at the top fairer so that we can fund some more super for people on lower incomes, particularly younger people. And that is a bit of a hint at the sorts of options that we’ll work through, not necessarily in super, but in some of these other areas. We’ve been pretty upfront in saying there are intergenerational issues in our economy, in our society, and in our budget as well. We’ve taken some steps on housing and tax and superannuation, but we’re interested in seeing if we can do a bit more on that front. We want people to be wealthy, but we want to make sure, and I know you feel this very deeply, having known you for a long time now, we want to make sure that the generations that come after us do even better........

© The Sydney Morning Herald