Jim Chalmers would have plunged Australia into deeper debt and deficit had he been treasurer during the pandemic as he attempts to discredit newly-minted Liberal leader Angus Taylor’s economic credentials.
Mr Chalmers launched a fresh attack against Mr Taylor on Monday claiming the Coalition’s 2025 election policies would have added $14bn to the deficit over two years.
This comes as he continues to claim his economic management has brought debt levels below Morrison-era projections.
However, SkyNews.com.au analysed Labor’s pandemic-era policy proposals and spoke to experts who have revealed Mr Chalmers’ approach would have driven Australia into an even worse economic situation.
In one shocking example of financial mismanagement, Labor proposed a $300 vaccine incentive in 2021 for all eligible Australians to get their second dose of the Covid jab.
This would have cost the taxpayer an estimated $6 billion, despite Australia achieving a 97 per cent full vaccination rate without any incentive.
Labor also proposed free rapid antigen tests for all Australians, which was costed at $5 billion in modelling conducted by the Morrison government.
The then opposition even called for the government to bail out Virgin with a $1.4 billion taxpayer funded loan.
Mr Chalmers was a key part of Labor’s push to expand JobKeeper to two million visa holders and short term casuals.
The then opposition also opposed the tapering off of JobKeeper in late-2020, while Mr Chalmers himself demanded an extension of the program in March 2021.
Labor wanted to keep Covid supplement payments at the original level for longer and then taper it back in mid-2021.
All together Mr Chalmers’ suite of taxpayer funded subsidies and policies would have added more than $80 billion to the debt and deficit, according to the Coalition modelling.
This is of course on top of the $337 billion in spending by the Morrison government Mr Chalmers and Labor supported.
Despite claiming he had delayed Australia entering into $1 trillion of debt compared to the Morrison government’s 2022 projections, Mr Chalmers would have actually added almost $100 billion to the budget blackhole.
“The point that needs to be made here is that in the budget that we inherited, we would have already crossed over $1t (in debt) a couple of years ago. This is the trillion dollars in Liberal debt that was left to us,” Mr Chalmers told First Edition on Monday.
UNSW Scientia professor of economics and co-author of ‘Australia’s Pandemic Exceptionalism’ Richard Holden said Labor’s large spending proposals could have exacerbated the mountain of debt already facing the nation.
“They wanted JobKeeper to be larger and cover more people and be extended for longer,” Mr Holden told SkyNews.com.au.
“I think that would have made things worse for little economic gain.
“The Coalition’s approach during the pandemic was extremely good and … on the whole, Labor wanted to spend more and it’s unclear what we would have got from that other than more debt.”
Mr Holden also criticised the Treasurer comparing current-day performances to pandemic-era forecasts.
He said it was a “cheeky choice of counterfactual” and claimed the comparison was “sort of meaningless”.
Deputy Liberal leader Jane Hume said the irony of Mr Chalmers’ claims were “breathtaking”.
“It’s astounding that Jim Chalmers has forgotten about Labor’s record during the pandemic – demanding more spending at every turn,” Ms Hume told SkyNews.com.au.
“Had Labor had their way, we would have bought an airline, extended JobKeeper indefinitely, and pumped out cash for vaccinations you’d already had.”
Industry Minister Tim Ayres was asked whether Mr Chalmers’ latest attack showed a “little bit of hypocrisy”.
But Mr Ayres dodged the question when faced with Labor’s pandemic-era spending goals.
“We have been in government since 2022. We have managed that issue amongst others to mean that we delivered two surpluses (and) lower deficits following that,” he said.
Sky News chief anchor Kieran Gilbert put it to the Labor frontbencher that deficits would have been greater if Mr Chalmers was treasurer.
Mr Ayres said: “The deficits were what they were”.
“I’m not sure about what people may or may not have said or what people say about what they’ve said,” he said.
Labor’s attack comes as government debt as a share of GDP sits at about 34 per cent and the 2025-26 budget deficit is on track to be $36.8b.
Meanwhile, public spending remains bloated and is forecast to hit 26.9 per cent this financial year.
From the 1960s to before the pandemic, government spending was about 22 per cent on average.
The large spending was confirmed by the RBA to be fuelling inflation earlier this month, as price pressures surge and the Coalition sounds alarm bells over the spendathon.
“The Treasurer should stop spending his time calculating hypothetical numbers that exist only for his talking points and start worrying about the numbers that effect real Australians – inflation at 3.8 per cent, mortgages going up, a trillion dollars of debt, a $57b black hole, and deficits as far as the eye can see,” Ms Hume said.
“We feel it everyday, Australians are poorer under Labor. So, while Jim Chalmers is obsessed with fighting the Liberal Party, we will be busy fighting for Australians.”