To hear Jim Chalmers tell it, he’s the unluckiest of unlucky treasurers.

He assumed the job as post-pandemic inflation was spiking. Shortly before taking office, Russia invaded Ukraine, sending global energy markets into a tailspin. Donald Trump announced his “liberation day” tariffs in April 2025. And in February of this year, conflict with Iran shut down the Strait of Hormuz and, with it, about one-fifth of global crude oil supply.

This government is swimming naked and no amount of obfuscation, finger pointing, and alliteration from Jim Chalmers can hide the truth.  Louie Douvis

The treasurer paints a picture of “responsible economic management” in which he’s finding budget savings, paying down debt, cutting taxes, and doing his part to get inflation under control. If only it weren’t for global economic turbulence, things would be even rosier in Australia.

The reality is precisely the opposite. Global events have, in fact, been a boon for Chalmers. Since he took office, there has been a staggering $400.8 billion in unexpected government revenue from higher commodity prices and inflation boosting the tax take.

Chalmers is, without question, the luckiest treasurer in Australian history. And what do we have to show for it? A budget in structural deficit with the Intergenerational Report forecasting four decades more of them. A large increase in taxes coming from working people. Living standards going backwards in an unprecedented way. Inflation persistently too high. Productivity growth in reverse. And policy changes that constitute an all-out assault on our innovation ecosystem.

Reaching this conclusion doesn’t require judgment or interpretation. All it requires is reading the government’s own economic reports. We’re just talking facts. And the facts of the case are these.

Start with the “Pre-election Economic and Fiscal Outlook” released on April 20, 2022, PEFO for short. This is a document to which Chalmers is fond of referring. He clearly thinks it’s a highly relevant comparator. It provides a kind of baseline forecast of what was expected at the time over the next four years. With the recently announced Final Budget Outcome for 2025-26, we’ve now seen what happened on this government’s watch relative to the PEFO forecast.

There are two categories of changes to the 2022 PEFO forecast that have occurred during the Albanese government’s time in office.

First, there are changes due to so-called “parameter variations”. The Parliamentary Budget Office describes parameter variations this way: “These are generally outside the direct control of the government. Parameter variations mostly occur because of changes in the broader Australian economy, including changes to the composition or demographics of the Australian population.”

Second, there are changes due to policy decisions. These come from deliberate choices made by the government.

So we can unpack changes to the budget bottom line over the life of this government into two categories: things that happened to the government and things done by the government. In other words, luck versus active policy choices.

Let’s start with the “luck” part – parameter variations. Looking at the budget documents and their updates over the last four years, parameter variations increased receipts to the government by $99.4 billion in 2022-23, $98.6 billion in 2023-24, $89.6 billion in 2024-25, and $113.2 billion in 2025-26. That’s a total revenue windfall of $400.8 billion. Four hundred billion dollars of good luck, plus change.

Now some of the same factors – such as inflation – that drive up tax receipts also drive up government expenditures. We can add up the changes to payments over these four years from parameter variations as well. The total is $119 billion. Part of this is bad luck. Part of it is also the increased cost of existing government programs that haven’t been reformed. But the most conservative possible estimate of this government’s good luck is that it totals $281.8 billion.

Now let’s turn to active policy choices. Here again there are changes to the 2022 PEFO baseline on the spending and revenue sides. Policy decisions taken by the government have increased spending by a total of $105.7 billion over their four years in office. So, for all the talk of “savings and reprioritisations”, this is the net result. Whatever “savings” the government has found, they have re-spent them, plus a bunch more. In the most recent year alone, 2025-26, the increase in spending is $51.2 billion.

Of course, government policy has also affected the revenue side. There have been some very small personal income tax cuts, and there have been tax increases. The net effect is that over the four years, policy decisions have increased taxes by $25.8 billion.

To put this all in context, federal government net debt at the end of the 2025-26 fiscal year was $550 billion. Without all the good luck, it would be more than $830 billion.

In the words of Aaron Sorkin, “these are the facts of the case, and they are undisputed” – they come from the government’s own economic documents.

This is a government that has been gifted a massive dose of fiscal good luck and has shown absolutely no fiscal restraint. This is why distinguished observers such as Philip Lowe and Ken Henry have made the comments they have recently.

In the last four years we should have paid down more than half our debt. But we didn’t. We should be running large budget surpluses. But we’re not. We should be anticipating a better future for our children and our children’s children. But we aren’t.

Sooner or later, this government’s good luck is going to run out, and our fiscal predicament will be on stark display. Warren Buffett famously observed: “You only learn who has been swimming naked when the tide goes out.”

But we know this government is swimming naked. Their own numbers say so. And no amount of obfuscation, finger-pointing, and alliteration from Chalmers can hide the truth.

Richard Holden

The Reserve Bank has two objectives, price stability – keeping inflation between 2 per cent and 3 per cent – and maximum employment. At a recent event hosted by the Committee for Economic Development of Australia, RBA governor Michele Bullock made a significant remark about the trade-offs involved. The unemployment rate needed to increase to 4.5-5 per cent, she said, a level that would “probably take enough heat out of the labour market that it will ease pressure on inflation”.

The comment came as a surprise to many as the labour market hadn’t been considered a significant source of recent inflationary pressures. There’s been no overall national gain in real wages such as we saw in the Whitlam years, just some long-awaited increases in sectors such as nurses, care workers and first responders. Bullock was clearly accepting the inflation fight could push the country even closer to a recession.

Unemployment edged up to 4.6 per cent in the latest reading from the Bureau of Statistics, and this week the RBA raised interest rates for a fourth time this year, to a 15-year high.

The comment on unemployment is politically very significant, as it broadens the potential impact of the inflation-fighting campaign. It’s not only borrowers – especially mortgage holders – who will feel the impact of rising interest rates, but also those who lose their jobs or become fearful of the possibility.

This feeds a growing sense of being disenfranchised by the major parties. People can’t understand why, when they didn’t vote for United States President Donald Trump, and are nowhere near the war in the Middle East, they should have to suffer the impact of both on their cost of living and job security. It’s bewildering that Australians should have to live with the consequences of Trump.

High inflation has seen off governments around the world in the post-pandemic era – it stirred a voter backlash against former US president Joe Biden despite the US economy’s remarkable recovery from that downturn. By the 2025 election, the Albanese government was able to tout the easing of price pressures and RBA rate cuts as evidence of its sound economic management.

Now, Labor will struggle to convince voters of the integrity of its fiscal management. Labor delivered surpluses in 2022/23 and 2023/24 and has been building on this since, but people have short memories. It is so easy to say the government should be running more surpluses, with strong employment and favourable commodity prices. Nobody seems prepared to say how – what spending should be cut, or taxes increased? Belt tightening would seriously risk a recession, and would be unlikely to slow inflation much given that there is little hope of an end to the Middle East war that is disrupting supply chains and driving fuel prices higher.

Moreover, does the Coalition really want to cut back on initiatives to ease the cost of living? This is a complex area with complex trade-offs that are hard to “explain” to the public.

Nevertheless, both the Coalition and One Nation – the latter hoping to build on its fortunes in the polls – will make much of the resurgence in inflation and interest rates, and continue to prosecute their simplistic “silver bullet” diagnoses, without any hint of what they would actually do. The political slogans will flow. Do I have to give up owning a home to control inflation? Why should I have to lose my job to control inflation? And many shriller versions to come. The key political point is that there will be pain from the anti-inflation strategy, so which group will bear most of it and how is it distributed? Those with savings will benefit; those in debt will take the brunt.

The scary reality is that interest rates may well rise again, with some market commentators fearing a prolonged Middle East war will drive the oil price as high as US$150 a barrel from about US$100 now, exerting further substantial pressure on inflation here and globally.

Does the Coalition really want to cut back on initiatives to ease the cost of living? This is a complex area with complex trade-offs that are hard to “explain” to the public.

The consumer prices data announced the day after the RBA rate increase showed the inflation rate had jumped to 4 per cent in the 12 months to August, from 3.5 per cent in the year to July. It was driven by housing costs and a nearly 15 per cent rise in fuel prices – due in part to the unwind of the excise cut. The RBA’s preferred “trimmed mean” measure was steady at 3.6 per cent, still well above target.

While the Albanese government has struggled to respond to these global issues, the opposition parties seem to be elsewhere in the policy universe. The Coalition’s whole strategy is based on myths, the first of which is their claim that they are better economic managers. This certainly wasn’t the case in the Howard–Costello days, as that leadership squandered the unexpected gains from China’s demand for resources that boomed in the late 1990s. Instead of making savings, that government promised unaffordable personal tax cuts, middle-class welfare and generous tax breaks to property investors and via superannuation concessions. In many ways the Howard government laid the foundations for the collapse of responsible fiscal management, with deficits as far as the eye could see.

The last Coalition government did even worse, with former prime minister Scott Morrison flooding the economy with billions in response to the pandemic that created the so-called homegrown inflation they have tried to pin on the current government. Government spending then reached a record 31 per cent of GDP, compounding budget deficit challenges. The heavy focus of much of this spending on housing blew up the industry with very large increases in construction costs. This exposes the hollowness of the opposition’s claims about reckless spending by the current government – it’s the pot calling the kettle black.

There are similar exaggerations in the Coalition’s attack on immigration, reiterating One Nation’s myth of “mass migration” where their proposed cuts would surely guarantee our slide into recession.

Probably the most ridiculous and irresponsible suggestion from the likes of Opposition Leader Angus Taylor and shadow treasurer Tim Wilson was their recent proposal of a double excise cut in tobacco and fuel. The idea is to deal with illegal tobacco and offer fuel price relief as a key element of the cost of living. They claimed the cuts would be fully funded. I assume they meant that cuts to the tobacco excise would encourage smokers back to “legal tobacco”, to the detriment of organised crime. This additional excise revenue would fund the cut in the petrol excise. This seems to assume, though, that these black market operators wouldn’t further cut the price of “illegal tobacco”, which they seem to have capacity to do.

Much of the façade that the opposition has sought to create by accusing the government of profligate spending and poor fiscal management was blown out of the water by the recent release of the final budget outcome for 2025/26, which clearly indicated the extent of continued repair. To quote Treasurer Jim Chalmers, “the bottom line is better than what we inherited, better than what was forecast at the election and it has improved since the budget”.

The deficit in 2025/26 was $22.3 billion, which is $6 billion better than the estimate in the May budget. It was also more than $20 billion below the $43 billion forecast by the opposition before losing government – so the deficit is barely half what the government inherited. At just 0.8 per cent of the economy, it is also less than half the average deficit between the global financial crisis and the pandemic.

The credit ratings agencies have confirmed our triple-A borrowing status and we have the strongest budgetary position in the Group of 20, with lower gross debt than every major advanced economy. The result reflected lower-than-expected spending and improved outcome for receipts. Tax receipts relative to GDP were still less than the historic high achieved by the Howard government.

This result is a stronger budget in every year of the Albanese government than it encountered in 2022. Over the past four years the budget deficit is almost a quarter-of-a-trillion dollars better off. As a result, gross debt is $198 billion less than the level when Labor came to power. As a share of the economy, gross debt was 33.2 per cent in 2025/26, down from 38.3 per cent in 2021/22. On the previous government’s trajectory, gross debt would have been well above a trillion dollars, closer to 45 per cent of GDP, the opposition having added two thirds of the debt in the budget.

It’s certainly time for a reality check on the opposition’s claims about their capacity to control government spending and fiscal policy. If they choose to perpetuate the illusion that they are better stewards of the economy, and maintain their focus on cutting spending, they need to be specific about exactly what expenditure they would cut and how they would avoid undoing any cost-of-living relief that the government is delivering, or offer their own alternatives.

However, the opposition seem happy to draw on Mark Twain’s advice to “get your facts first, then distort them as you please”. This is unlikely to be an election-winning strategy, especially when the voters want the truth and real action on the cost of living. We’re out there, the Liberal voters holding out for honest analysis and decent policy. We just need to see some clear sign of it.

John Hewson is a professor at the ANU Crawford School of Public Policy and former Liberal opposition leader.

The government sees an opportunity to regain city seats with targeted policies such as allowing dogs in pubs and extending trading hours

Premier Ben Carroll will pledge to progressively unwind Daniel Andrews’ controversial land tax increases, in a major policy reversal aimed at reviving Labor’s election fortunes and easing pressure on hundreds of thousands of Victorian property owners.

Confirming an exclusive report by The Australian a fortnight ago, Mr Carroll will announce on Sunday that a re-elected Labor government would restore the $300,000 tax-free threshold over a decade, eventually removing more than 250,000 Victorians from the land tax net.

The promise puts Labor in direct competition with the Coalition over relief from one of the most politically damaging measures of the Andrews-Allan era, although Mr Carroll’s plan would restore the threshold significantly more slowly.

The Andrews government slashed the threshold from $300,000 to $50,000 in aggregate taxable land value in its 2023 budget as part of Labor’s 10-year Covid Debt Repayment Plan, dramatically expanding the number of property owners liable for the tax.

Labor insiders have regarded the increases as one of the remaining political barnacles Mr Carroll must scrape away if the government is to stage a comeback at the November election.

“Lower land tax, more cost-of-living relief, and a responsible way to pay for it,” Mr Carroll said.

“I’m a new Premier and this is my new direction. I’ll cut land tax in my first Budget.”

Under Labor’s plan, the threshold would rise by $25,000 in 2027-28, taking it to $75,000 and removing about 33,000 Victorians from the tax net. The government says those owners would save $500 in the first year and $3000 over six years.

Further annual increases of $25,000 would lift the threshold to $150,000 by 2030-31. Increases would continue beyond the four-year budget forward estimates until the $300,000 threshold was restored in 2036–37.

Once fully implemented, Labor says the changes would spare more than 250,000 Victorians from paying land tax and save affected owners up to $975 a year.
The Coalition has pledged to restore the $300,000 threshold over five years, lifting it by $50,000 annually.

For taxpayers with land worth more than $300,000, the Andrews government imposed a $975 charge plus an additional levy of 0.1 per cent of the value above $300,000.

The measures largely captured investment properties, holiday homes and commercial land, while principal places of residence remained outside the scheme. The levy is scheduled to operate until June 2033 and was forecast to raise about $4.7bn over its first four years.

Labor also imposed a separate Covid debt levy on large employers. Businesses with national payrolls above $10m pay a surcharge calculated on their Victorian taxable wages.

Mr Carroll said “working people who are paying off two mortgages are feeling the pressure as much as anyone right now”.

Treasurer Colin Brooks said the government had made “commonsense decisions and now we can deliver cost-of-living relief that lasts”.

The competing tax promises come as Opposition Leader Jess Wilson prepares to unveil a policy on Sunday to halve Victoria’s elective surgery waiting list by allowing public patients to receive treatment in private hospitals at no cost.

The Coalition says its program would deliver an additional 25,000 surgeries a year, targeting procedures including hip and knee replacements, cataract surgery, hernia repairs, gynaecological procedures, gastroscopies and colonoscopies.

Modelled on a Queensland program, the initiative would be delivered in partnership with more than 100 private surgical hospitals and day surgeries across Victoria.

Is Anthony Albanese on his way to becoming the most unloved post-war leader Australia has had the displeasure of electing, twice? After last week’s interest rate rise, it’s not an unfair question to ask; remember it was also a question posed about Scott Morrison – and every leader since Bob Hawke.
But are Albo and Scomo really the most unpopular PMs? The answer might surprise: they’re not in the same league as many of their predecessors. That’s not to say Albanese won’t get there; at the rate he is going, he may well achieve it.
There is no disputing that non-Labor voters hate Albo with a passion – an emotion rivalled only by the contempt the left once had, and still holds, for Scomo. Similar divisions were heightened in the Gillard and Abbott contest. But they were not as pronounced in the clash between Howard and Rudd. The election result of 2007 was decisive, but the public mood was not as visceral.

The animus may run deep along partisan lines for the nation’s current and past prime ministers, but how far does it really extend beyond these sectarian boundaries?

Statistically speaking, neither Albo nor Scomo come close to holding the title of being the most continuously condemned PM. That is, if we accept a misguided but vulgarised assumption that a leader’s approval rating in the published polls amounts to a scorecard of their admiration.
For argument’s sake – assuming that it does – the results do not align with today’s politically perverted narratives. Using an average of net approval ratings since 1985, as measured by Newspoll over the course of an individual PM’s leadership, Albanese ranks only fifth in the list of least approved. It may not feel this way today.
Morrison scores even better. He comes in at third out of nine. In other words, based on an average of net approval scores, only Kevin Rudd and John Howard were ahead of him.
Of all the prime ministers over the past 40 years, Paul Keating’s score is the worst. The former and most revered Labor leader had an average net approval rating of minus 24 during his time as PM. The highest approval rating Keating ever achieved was 43 per cent. His lowest approval dipped to as low as 17 per cent.
The irony is evident and even personifies the modern-day populist clash between economics and politics. Keating, as both treasurer and prime minister, a benchmark for fiscal and economic competence, at least among his less accomplished contemporaries, was the least supported by voters.
What this says about us is more profound than what it says about Keating. The most approved leader, on an average of net approval rating, is Rudd. This may be a result of his short two terms in office. His average net approval rating was 23.8 per cent. Howard ran second with an average net approval rating of 6.6 per cent, which is more remarkable considering the length of his time in office. But here comes the shock for the left: Morrison ranks number three with a positive average net satisfaction of 5.3 per cent. This is where statistics and historical revision start to clash.

Hawke, deified as our most popular, runs fourth. True, this is based on patchy data that starts to look incomplete the further one goes back. But based on available evidence, Hawke in fact dips into negative net territory at minus 2.4, when his polling numbers averaged over the length of his prime ministership.
The obvious lesson here is a political rendering of the James Dean phenomenon. The shorter one’s public life, the more intense the flame and the less time people have to eventually despise you. Surprisingly, considering the cascading failures of economic management, Albanese comes in at the middle of the pack with an average net negative approval rating over his 4½ years in office of minus 3.8 per cent. Malcolm Turnbull follows with minus 12.3 per cent, then Julia Gillard on minus 19.2 and Tony Abbott a close rival at minus 20.1 per cent. Keating eclipses them all on a measurement of disapproval.
While he and Hawke remain revered among the political class for their economic accomplishments, do ordinary Australians old enough to remember their governments feel the same way. Did they ever? By any of these measures, Albanese is not the most disapproved leader and nor is Morrison.
The better question, and one often more pertinent to electability, is whether they are “liked”. Because a leader who is liked, such as Hawke, is often forgiven for buggering things up.
On this score, the results are also surprising. Despite the depth of loathing voters now clearly have for Albanese, the last Newspoll to ask this question – in January – still had more than 50 per cent of voters saying they liked him. But this is where the danger lies. Going back only as far as Rudd – with the absence of similar data comparisons for previous leaders – Albanese’s average isn’t so great. Presumably it will get worse.

Based on the mean score of whether a voter agreed a leader was likeable, Rudd scored 73 per cent, Gillard was on 66 per cent, followed by Turnbull on 62 per cent and Morrison on 57 per cent. Albanese fell behind all these leaders at 56 per cent, followed by Abbott with 40 per cent. The averages are different and the observations are only occasional – and taken in different years and during differing political circumstances – so you could not say with certainty that it is a controlled head-to-head comparison.
For instance, Gillard’s score on this measure was as low as 47 per cent and as high as 71 per cent. Morrison’s highest likability was higher than Albanese’s best result.
One thing all leaders had in common, however, was that it was their “likeable” ratings that had sunk at the time of their departures.
The point is that the approval of a leader’s performance may be one thing, but when it comes to a change of government, there remains a universal truth: if voters do not personally like the leader, their party does not get re-elected.

With One Nation now polling at or above Labor and the Liberal-National Coalition a distant third, Australia appears to be experiencing a populist revolt. The latest Newspoll put One Nation as high as 36 per cent in Queensland and, significantly, ahead of Anthony Albanese as preferred prime minister. The poll was conducted on September 27-28, 2026.

The responses are familiar. One is horror that ignorance has prevailed. The other, more salutary, sees in the shift a seismic movement of the kind already visible in Europe and the United States, a society finally exhausted by the technocratic elite, its internationalism and its embrace of mass migration. On this account, multiculturalism is depicted as a top-down cultural project, advanced by political and intellectual elites lacking popular legitimacy. There is something profoundly incomplete about this interpretation. The cultural project of multiculturalism was arguably possible only because of an older Australian egalitarian hostility to Englishness, particularly the English class system, present from the earliest colonial societies. After the second world war, and especially during the 1970s, this hostility extended from social hierarchy to cultural authority itself.

The irony is that a project now associated with cosmopolitan elites owes much of its legitimacy to one of Australia’s oldest impulses: egalitarianism. Multiculturalism required not simply the arrival of migrants, but an Australia in which England’s cultural authority had already eroded and a longstanding suspicion of English hierarchy had discredited the old Anglo-Saxon order.

The Paradox of Multiculturalism

Australia did not simply embrace multiculturalism by adding Greeks, Italians, Lebanese, and East Asians to an otherwise harmonious British culture. The old Australia inherited not merely the English language and Westminster institutions, but a highly differentiated culture of class, manners, accent, education, religion, and social inheritance. Its British inheritance was itself anything but harmonious. English, Scottish, Irish, and other traditions carried their own antagonisms, while class and sectarian divisions ran through colonial society.

To reject that inheritance was therefore not merely to reject racism or the White Australia policy. It was also to reject the idea that English culture, and the social distinctions connected with it, possessed any special cultural authority. This is the paradox. Australian multiculturalism has an egalitarian origin. It became easier to say that many cultures could belong equally to Australia once the cultural authority of Anglo-Australia had itself been levelled. The same egalitarian instinct that mocked the English gentleman, the public-school accent, and inherited status could eventually turn against the very idea of cultural distinction altogether.

Much of this rested on a caricature of England and English culture, increasingly detached from the England that had itself undergone profound social levelling. Modern Britain also embarked upon its own multicultural experiment, but for rather different historical reasons, in the aftermath of empire and decolonisation. Australia’s path was different – its multiculturalism emerged partly from an aversion to its own British inheritance.

Class and Culture

But once cultural authority and inherited distinctions are levelled, a further question arises. Culture is a way of life transmitted through families, communities, institutions, and generations, and class has always shaped the means by which that transmission occurs. The relationship between cultural continuity and social differentiation is therefore one of the neglected questions of modern egalitarianism. A society may abolish formal class distinctions, but it cannot dismantle the structures through which culture is transmitted without also changing the culture itself.

This is where T. S. Eliot remains particularly relevant. In his Notes Towards the Definition of Culture (1948), culture is not an abstract collection of aesthetic or literary accomplishments, but an organic condition of life, sustained through families, communities, institutions and generations. Eliot understood that culture requires particularity and differentiation. It has a local and parochial dimension as well as a wider national one. It cannot simply be manufactured from above, nor reduced to a collection of interchangeable preferences.

The English class system was certainly capable of cruelty and snobbery. But it was not merely a mechanism of oppression. It also sustained institutions, manners, traditions, and forms of cultural inheritance. Moreover, differentiation is precisely what sustains culture, both in its particular and its wider sense. The paradox of Australian multiculturalism is therefore that it did not arise simply from the triumph of cosmopolitanism over an older conservative Australia. It was made possible, in significant part, by the much older Australian revolt against hierarchy. It is only through this project of class-levelling that multiculturalism became possible, from the rejection of Anglo culture and its place in the hierarchy to an increasing ambivalence towards class and cultural distinctions themselves.

The Dialectic of Mass Society: Populism and Elitism

The dissolution of class also helps explain the current opposition between populism and meritocratic elitism. As older class distinctions and inherited forms of authority weakened, society became increasingly organised as a mass. In The Revolt of the Masses (1930), Ortega y Gasset understood the mass not simply as a revolt against elites, but as the product of the erosion of the social structures that had previously ordered society. Populism expressed this new equality politically, asserting the mass against established elites; technocracy emerged as its meritocratic counterpart, claiming authority through expertise rather than inheritance. They were therefore not simply opposites, but competing responses to the dissolution of the social order that had produced them.

The same logic extended from class to culture. Australia first diminished British cultural authority from within: in a colony populated largely by peoples of the British Isles, Englishness could claim no unquestioned supremacy. What began as a rejection of English hierarchy was extended outward, until even cultures most distant from the British inheritance were taken as equal in status to those closest to it. Multiculturalism was thus not simply the arrival of diversity, but the culmination of a distinctly Australian movement from social hierarchy towards cultural equality.

Alas, Australia’s revolt against English hierarchy did not stop at class. It eventually reached culture itself, sweeping away the old hierarchy and leaving the principle that all cultures are equal.