While the rest of the political system has been distracted by the dual citizenship fiasco and gay marriage debate, Labor’s economic team has been having a picnic.
Not an austere nibble on celery sticks and julienned carrots.
The modern Labor style is far more lavish.
In the tradition of the Rudd/Gillard era, they have been feasting on a banquet of fiscal irresponsibility.
The Shadow Finance Minister, Jim Chalmers, has released some of the worst polices in the history of the Commonwealth.
Yet few people seem to have noticed.
This is the twilight zone in which Australian politics has now entered.
There is no substantial policy debate.
There is no significant scrutiny of where a Shorten Labor Government would take the country.
Instead, the system is consumed by the rolling chaos of Malcolm Turnbull’s Prime Ministership and his fight for survival.
Chalmers’ policy agenda has more black marks against it than Harvey Weinstein’s reputation.
Last month he gave a speech at the Australian National University in which he announced Labor would turn the Department of Finance into the equivalent of an investment bank.
It would routinely lend money to businesses that can’t access finance anywhere else.
Chalmers calls this the “entrepreneurial state”, supposedly overcoming “the economic flaws in neoliberalism” and “advancing the fair go in the new machine age.”
I think there’s a better name for it: the recklessness of Chalmenomics.
State Labor Governments implemented this strategy in Western Australia, Victoria and South Australia in the 1980s/90s and it was financial disaster.
The politicians trying to pick “industry winners” and lend public money had no idea what they were doing.
They funded projects hundreds of private sector financial experts had refused to fund because they were too risky – and State taxpayers had to pick up the bill when the businesses collapsed.
Why would Chalmers Inc be any different?
I’ve had several meetings with Jim and he’s a bright enough guy.
But he’s got zero experience in successfully investing other people’s money.
To my knowledge, he’s yet to make two bob in the private sector.
Chalmers has been an academic, a Labor apparatchik and a staffer to the failed Treasurer, Wayne Swan.
Nothing in his background or training has made him skilled in lending practices.
I wouldn’t trust him with a cent of my money or yours.
Why should hard-working Australian taxpayers have to underwrite a Finance Department in Canberra that funds private sector investment projects the private sector itself refuses to support?
Governments should never act as a lender of last resort.
It’s a mug’s game.
It exposes taxpayers to the riskiest, dodgiest projects in the market – the ones no one else wants to touch (for good reason).
Bill Shorten needs to acknowledge this reality and find himself a new Finance spokesperson.
There’s another problem with Chalmenomics.
It sends a terrible message about spending restraint.
Traditionally the role of the Finance Minister has been Scrooge-like: telling his big-spending Cabinet colleagues in education, health, social security and defence to tighten their belts.
Over the past decade, every Finance Minister (Liberal and Labor) has been hopeless in this role, with budget deficits ballooning out of control.
Under Chalmers Inc, it will be even worse.
The demonstration effect inside a government is dreadful.
Why would ministers impose fiscal discipline upon their portfolios if they see the Finance Minister recklessly introducing high-risk, funny money schemes?
They would tell him to tighten his own belt first.
If Labor wins office, Chalmers will have no authority internally for implementing cost-savings and balancing the books.
It will be a replay of Rudd/Gillard/Swan profligacy, on debt-funded steroids.
Labor has already announced an expensive down payment on Chalmenomics.
Two months ago Shorten said he would establish a $1billion Australian Manufacturing Future Fund – lending to factories nobody else will finance.
Similar investment funds are likely to be announced in the lead up to the next election, putting vast amounts of public money at risk.
Strangely for a party of labour, the ALP wants to become an economy-wide banker of capital, giving hope to every shonky business proposal around the country.
The great hard-nosed Labor Finance Minister of the 1980s, Peter Walsh, must be spinning in his grave at the fiscal decadence of Chalmers Inc.
Walsh gave Finance a single, purposeful mission: to eliminate waste and drive the budget back into surplus.
He was the natural-born enemy of rent-seekers everywhere.
Now Chalmers wants to turn Walsh’s old department into an economic casino.
This is the tragedy of modern Labor.
Bob Hawke and Paul Keating gave the party a successful financial model in the 1980s but under Shorten’s leadership, they don’t know how to implement it.
On economic issues, there are two types of Labor politicians.
The majority of them, Chalmers included, look at capitalism and see a monstrous threat to equality and “social inclusion”.
Their instincts are to control and manipulate the economy for social justice purposes, yet this always ends in less growth and more poverty.
The second type of Laborite is more economically literate.
They have become a dying breed but back in the day, they included MPs like Walsh and Keating.
They look at capitalism and see a powerful opportunity for generating economic growth, the proceeds of which can then be used by government to create a fairer society.
Until the current Caucus accepts this principle, Labor poses a sovereign risk to Australia’s economic future.
Chalmenomics is a disaster waiting to happen.