Dr Chalmers Presents the Intergenerational Report

Jim Chalmers presented the Treasury Department’s Intergenerational Report on Thursday. The report, which was inaugurated in 2002, forecasts the state of Australian government, economy and society in 40 years’ time.

The findings were familiar. Climate change will have worse consequences. The economy will be twice as large as it is today, but new challenges will arise. An ageing population will place a greater tax burden on working age Australians.

But as Sean Kelly told Insiders, the interesting thing about these reports is not so much the report itself, but the agenda the government of the day sets them to. 

Treasurer Chalmers’ framing was on show at the National Press Club on Thursday. The headline, for Chamlers, is net zero. The goal: to make Australia benefit from these shifts “in ways that create more opportunities for more people in more parts of our country.”

As Chalmers noted, 93% of global GDP now takes place in countries covered by net zero commitments. Climate change is now “an economic and environmental imperative.” For Australia, these are “vast industrial opportunities”, not just in providing energy but in the industrial activity unlocked by cheap energy.

On the other hand, the reduced export of fossil fuels will leave a hole in the tax revenue base. It is forecast that income tax will have to make up a greater share of the economy than it does now.

The burden on younger generations will be yet greater because of falling rates of home ownership. Among 25-34 year olds, 17% less own homes than did in 1981. This means the pension will cost a greater portion of the economy.

This left two elephants in the room at the National Press Club on Thursday: taxing assets, rather than income, and the stage 3 tax cuts.

Chalmers response was deft. To paraphrase: “We want to be future makers, not future takers, economic maximisers not economic managers. It’s about making decisions today that will allow us to own the future.”

Of course, the future the Albanese government wants to own is elections in 2025 and 2028. Chalmers’ message of moderation is designed to get them there.

There is a kind of genius to this vanilla veneer. After a net zero law, a petroleum resources rent tax, the Voice referendum, a national anti-corruption commission, having 10% of the continent under indigenous managed protected areas, and now industrial relations changes, the government has maintained an image of harmlessness in a normally hostile media environment.

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