Are the Knives Out for Sunny Jim?

It’s a pretty solid rule in politics that the more your colleagues tell the press they’re solidly behind you, the more likely they’re sharpening the knives behind your back. Australian Treasurer Jim Chalmers better stand with his back to the party room wall.

When Environment Minister Murray Watt is reduced to publicly calling for an end to “undermining and leaking” against the treasurer from within caucus, the rot is already deep. Assistant Treasurer Daniel Mulino and Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton have been wheeled out to insist, Mulino’s words, that Chalmers is “absolutely safe”. In the lexicon of Labor party rooms, that translates roughly to ‘start packing your boxes, mate’.

“The treasurer is working on one-in-25-year tax reform with the PM and with, obviously, the cabinet and the whole caucus,” [Mulino] told Nine’s Today.

“The tax reforms are going to be very important for productivity growth, but also for fairness.”

More like a once-in-a-generation shafting of Australian homeowners, investors and anyone foolish enough to build a nest egg. Those tax changes – replacing the capital gains discount, clamping negative gearing on existing properties and the new trust taxes – have already drawn sustained fire from accountants, lawyers and the business community. More tellingly, they’ve torched the housing market while somehow managing to leave aspiring homebuyers and renters even worse off.

The leaks are not idle gossip. They point to deep dissatisfaction from Chalmers’ colleagues with his performance. Frontbenchers do not rush to the microphones to deny problems that do not exist. Charlton, now being given expanded cabinet powers, has been careful to rule himself out of any immediate tilt.

“I think the caucus supports Jim Chalmers because they know he’s doing a good job in a difficult time. Well, I’m not going to speculate on leaks that people aren’t putting their name to. What I will say is, what I see every day, which is people supporting the treasurer in the difficult job that he is doing.”

In politics, today’s denial is often tomorrow’s leadership challenge.

Then there’s the pink paper fiasco. For decades, the traditional “pink paper” detailing the revenue impact of proposed tax changes included independent Treasury views that the full cabinet could read. That process was quietly altered before the last budget. Now only ministers inside the Treasury portfolio – Chalmers and Mulino – see the unvarnished advice. The Department of Finance and Prime Minister & Cabinet still get to comment, but the experts with actual tax knowledge have been sidelined for everyone else.

One former treasury secretary said: “It would be OK if the pinks are joint between the three central agencies, but if not that’s odd.”

Another former official noted that the only reasons to omit independent comments are that the minister does not want to be contested or is in a hurry. This is not bureaucratic housekeeping, it’s the mark of an increasingly autocratic rule from the PM’s office. Anthony Albanese has tightened his grip over information and process, delegating expanded powers to selected MPs while controlling what the rest of cabinet is allowed to know.

Alex Sanchez, a former economic adviser to Mr Albanese, told the Centre for Independent Studies in August that Mr Albanese had become overly powerful in determining the future of the party and Labor politicians should speak out.

“I’m sort of … stepping out of my comfort zone here a bit, but in my memory, I can’t think of a prime minister that has as much command over the parliament and the party,” Mr Sanchez said.

All of which makes the speculation almost inevitable. With Labor’s poll numbers in freefall and an election on the horizon, Albanese appears to be preparing to do a Bob Hawke and sacrifice his ambitious but deeply unpopular treasurer. Chalmers, possibly the most ludicrously incompetent Labour treasurer since Gough Whitlam appointed a literal Marxist to the job, has become exactly that.

The defences are coming thick and fast precisely because the dissatisfaction is real and spreading. Albanese may decide that consolidating his own power and attempting to staunch the bleeding in the polls requires a blood sacrifice in the treasurer’s office. Whether that saves Labor is another question entirely. Voters have long memories for broken promises, higher taxes and the quiet rewriting of cabinet process to protect the government’s preferred narrative.

No amount of party room solidarity, real or performative, will change the cost of living crisis Albanese and Chalmers have delivered. Chalmers would do well to check the exits.