Chalmers has earned the right to snub the Coalition, but here's why he shouldn't
Jim Chalmers slammed the door shut this week on doing a deal with the Coalition on tax changes to superannuation. The treasurer is perfectly entitled to thumb his nose at the opposition. Labor first announced these tax changes last term, the government took them to the election, and it then secured a thumping majority on May 3. But Chalmers is making a mistake.
The much-depleted Coalition has not yet decided whether it plans to be constructive, in a legislative sense, in this second term on the opposition benches, or whether it will continue with the monomaniacal impulse to say 'no' to most proposals.
Chalmers could not agree to the Coalition's twin requests – that the tax change be indexed so that over time the impost does not affect more than the initial estimate of 80,000 people and second, that the tax would not apply to unrealised capital gains (such as a family farm or an expensive artwork) held by an individual's self-managed super fund.
Instead, the treasurer has chosen to negotiate with the Greens, who also want tweaks, but who are much more likely to eventually pass the tax in its original form.
So, notwithstanding the huffing and puffing from the opposition and some in the more conservative sections of the media, this debate is likely to end up with Chalmers getting his way and securing the new tax – which raises the tax rate to 30 per cent on superannuation balances over $3 million – in its unamended form.
The treasurer's mistake is not so much in not compromising on the detail with the Coalition (arguments can be made for and against the proposed changes). Rather, it's in the signal sent to the Coalition about how he intends to negotiate in the coming term of parliament.
Chalmers' PhD, Brawler Statesman, was written about Labor's legendary former treasurer and prime minister, Paul Keating and how the one-time member for Blaxland implemented and then bedded down ambitious and necessary economic reform over more than a decade.
Keating's record of reform (backed by Bob Hawke) is part of political folklore now – he floated the Australian dollar, opened up the economy, reduced tariffs, welcomed foreign banks, privatised major government-owned companies such as Qantas and more.
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