I was enjoying a remarkably crisp sparkling water in the Qantas Chairman’s Lounge yesterday morning when I found myself reflecting on the sheer, unadulterated bravery of Jim Chalmers. The federal treasurer has a truly unenviable task ahead of him tonight. He must stand before the Australian public, look them directly in the eye, and inform them that their inability to afford groceries is not a failure of domestic policy, but entirely the fault of the Middle East.
It takes a special kind of political courage to deploy a geopolitical conflict as a macroeconomic shield. When I spoke briefly with a very senior Treasury official—who shall remain nameless, though I will say he has excellent taste in Italian loafers—he confided in me that the government’s primary fiscal strategy for 2026 is pointing at a map of the Suez Canal and shrugging helplessly. I, for one, think it is a masterstroke.
For too long, the Australian electorate has demanded that its government actually govern. There is this pervasive, rather vulgar expectation among the working classes that a federal budget should alleviate domestic financial suffering. But as Chalmers so astutely noted in his pre-budget remarks, the inflation challenge has been made much worse by global crises and their impact on fuel prices. Why should the Labor government be expected to intervene in a localized cost-of-living crisis when there are complex, intractable wars happening thousands of kilometers away?
It is incredibly selfish of everyday families to expect meaningful relief at the checkout when international shipping lanes are experiencing moderate disruptions. I tried to explain this to my barista, a perfectly pleasant young man who recently mentioned he is moving back in with his parents because his rent increased by forty percent. I told him that while I sympathize with his localized housing grievance, he simply isn’t factoring in the broader pressure on global supply chains. He looked at me with a blank expression, which only confirmed my long-held belief that we need to mandate basic macroeconomic literacy in our public schools.
Chalmers has explicitly stated that the government is showing spending restraint, a phrase that is absolute music to my ears. Spending restraint is the hallmark of a mature, sensible administration. It means that rather than squandering the national treasury on frivolous, inflationary handouts—like public housing, increased Medicare rebates, or adequate funding for the NDIS—the government is making the tough, responsible choice to simply let people struggle.
This is what we in the commentariat call resilience. Resilience is a beautiful, deeply misunderstood economic concept. It is the process by which the government transfers the burden of systemic economic failure onto the shoulders of individuals who have absolutely no power to fix it. When Chalmers says the budget will be focused on resilience, what he means is that the average voter will need to become much more resilient to the sensation of being cold in their own home this winter.
I am told that there will also be efforts to rebalance the tax system. This always causes a brief flutter of panic in the circles I travel in. Whenever a Labor treasurer uses the word rebalance, one naturally assumes they are coming for the family trust or the negative gearing arrangements that keep the fabric of our society intact. But I have been assured by my contacts in Canberra that this rebalancing will be entirely sensible. It will likely involve closing a few esoteric loopholes that only apply to multinational tech conglomerates, while leaving the sacred pillars of intergenerational wealth accumulation entirely untouched.
We must remember that the wealthy are already doing our part to fight inflation. Just last week, I made the agonizing decision to delay the renovation of my weekender in Portsea. By withdrawing my capital from the luxury construction sector, I am single-handedly cooling down the domestic economy. Does Jim Chalmers send me a thank-you note? No. But I do not do it for the glory. I do it because I understand fiscal responsibility.
If the lower and middle classes simply ceased all discretionary spending, including heating and fresh produce, we could achieve a budget surplus by Tuesday.
Alistair is, of course, entirely correct. The Deputy Liberal leader has warned that the Coalition should listen very carefully to the results of the Farrer byelection, where voters expressed intense frustration with the major parties. But listening to voters is a dangerous game. Voters, bless them, are notoriously emotional. They see their grocery bills doubling and their mortgage rates climbing, and they irrationally demand that the people they elected to run the country actually do something about it.
This is the populist trap that Chalmers is so bravely avoiding. By maintaining strict spending restraint, he is ensuring that our policy decisions are making a positive contribution to the budget rather than detracting from the budget position. This is the ultimate goal of any modern nation-state: to maintain a structurally sound spreadsheet, regardless of the human toll.
Imagine the sheer aesthetic beauty of a federal budget that balances perfectly on paper, sitting quietly in a server in Canberra, untouched by the messy, expensive reality of citizens needing healthcare or infrastructure. That is the dream Chalmers is chasing, and it is a noble one. The spreadsheet must be protected at all costs. If protecting the spreadsheet requires the working class to absorb the entirety of the global inflation shock, then that is a sacrifice I am more than willing to let them make.
Let us briefly examine the treasurer's assertion regarding fuel prices. Chalmers rightly notes that the crisis has put immense pressure on fuel costs, which in turn stifles economic growth. I can personally attest to this hardship. Last weekend, while coordinating the logistics of moving my vintage European car collection from the city garage to the country estate, the diesel bill for the transport trucks was nothing short of extortionate.
When I saw the invoice, I felt a profound, almost spiritual connection to the single mothers in the outer suburbs who are currently agonizing over whether they can afford to drive their children to school. We are, in a very real sense, in exactly the same boat. Except, of course, my boat is a 40-foot catamaran currently moored in Sydney Harbour, and the fuel costs for that have also become quite unreasonable.
This is why the Labor government’s steadfast refusal to significantly cut the fuel excise is so deeply principled. Cutting the excise would provide immediate, tangible relief to millions of struggling households, which sounds pleasant in theory, but it would completely undermine the overarching goal of budgetary restraint. If we give people cheaper petrol, they will simply use that saved money to buy other things, like food or winter clothing, which will only drive up inflation. By keeping fuel prices artificially punishing, the government is essentially doing us a favor, starving the inflation beast by ensuring we have absolutely zero disposable income left over to feed it.
Furthermore, the concept of rebalancing the tax system is one that requires a delicate, sophisticated touch. The Australian tax base is currently far too reliant on the heavy lifting done by the top end of town. I am reliably informed by my accountant that my various trusts, holding companies, and strategically depreciated assets are completely compliant with current legislation, yet I still feel a vague, ambient sense of persecution whenever the word tax is mentioned on the evening news.
Chalmers understands that true reform does not mean taxing wealth; it means optimizing the efficiency with which we tax wages. Wage earners are, after all, the most reliable source of government revenue. They cannot afford clever accountants, they cannot offshore their income, and they are essentially a captive audience. Rebalancing the tax system, in the mature, grown-up sense of the word, means ensuring that the people who actually work for a living continue to foot the bill for the national infrastructure that my logistics companies rely upon.
The Treasurer has made it abundantly clear that the budget will be stronger tonight than it was in December. This is the kind of robust, muscular economic language that sends a thrill down the spine of anyone who understands the vital importance of a AAA credit rating. Who cares if the high streets are boarded up? Who cares if the queues at the food banks are stretching around the block? When international credit rating agencies look at Australia, they will see a nation that has successfully abstracted its economy away from the lived reality of its citizens.
There are those who argue that a government with a surplus during a domestic crisis is like a hospital with a massive stockpile of bandages refusing to treat bleeding patients because it wants to keep its inventory numbers looking strong. This is a fundamentally flawed analogy. A better analogy is that the government is the hospital administrator, and the patients are bleeding because of complex geopolitical tensions in the Middle East, so handing out bandages would only cause an inflationary spiral in the global cotton market.
As we settle in tonight to watch the Treasurer deliver his speech, I urge all Australians to watch with a sense of gratitude. When Chalmers announces that there is simply no money available to ease the domestic burden, do not give in to base, populist anger. Instead, take a moment to reflect on the global macroeconomic forces at play.
Think of the Brent crude spot price. Think of the complex logistics of international freight. Think of the sheer intellectual rigor required to look at a nation of people struggling to pay their electricity bills and tell them, with a perfectly straight face, that it is all because of an overseas conflict they have absolutely no connection to.
I will be watching the broadcast from the comfort of my study, a glass of reasonably priced 2014 Shiraz in hand, comforted by the knowledge that the adults are finally back in charge. The budget position is strong. The spending restraint is absolute. And if the rest of the country simply learns to embrace the bracing chill of enforced resilience, we might just make it through this crisis without me having to pay a single cent more in capital gains tax.