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Back in the ’70s, one of the crowning stupidities of the disastrous Whitlam government was putting Jim Cairns, a Marxist, in charge of the nation’s purse strings. Naturally, Gough Whitlam is a Labor hero: so much so that Anthony Albanese seems determined to outdo him in every idiotic excess. Not least by handing another Jimmy-the-Idiot the key to the nation’s finances: Jim ‘Zippy’ Chalmers, who is fast shaping up as the worst treasurer since Cairns.
Australia’s budgetary position is now in worse shape than when Whitlam’s commo mate was in charge of the national purse. Back then the oil crisis and the Connor loans scandal finished off the Whitlam government. This time the damage is self-inflicted, deliberate and hidden in plain sight.
Energy Minister Chris Bowen is deliberately concealing from the Australian public his enormous commitments to fund thousands of huge transmission towers, the Snowy 2.0 disaster, the solar and wind farms in remote areas and other facilities. Apart from the Snowy 2.0 section of the scheme, the investment is set to be funded by private capital based on incredibly generous but secret investment returns. The best estimate of the concealed liability to be met by power users is around $1 trillion, but that could be $200bn under or overstated. When the margin of error alone is in the hundreds of billions, you know we’re rooted.
Chalmers concealed the Bowen liability in the budget and, in an outrageous statement to the Senate, Snowy 2.0 chief executive Dennis Barnes could not reveal the costs that must be met by power users over the next decade. The Snowy 2.0 project is totally out of control and I fear the same chaos applies to the total project.
The 2026 version of the “Rex Connor affair” is Bowen’s trillion-dollar black hole. The budget was prepared without business consultation and did not anticipate the disaster it would create. Large capital sums are now set to leave the country.
In a rare turn-up for the books, the flow of money across the Tasman is for once heading east.
The boss of New Zealand’s largest financial advisory firm, Neil Paviour Smith, says he has never seen Australian tax changes lead to such a significant level of inquiry from investors and businesses looking to redomicile to the island nation.
Jim Chalmers’ decision to scrap the 50 per cent capital gains tax discount, replace it with inflation indexation, and slap a minimum 30 per cent CGT on trusts has triggered a stampede of inquiries from Australian investors and businesses looking to redomicile across the Tasman.
Small business owners are already packing their bags. Lisa Walker, founder of Sydney wellness brand Eir Women, is considering moving her operation to New Zealand:
Ms Walker said she would keep serving existing buyers in Australia and base the company in New Zealand as the “government isn’t going to take all our equity”.
“We could easily move our business to New Zealand because we can still sell our products here [Australia].”
Erini Stavroulakis, 21-year-old co-founder of startup Spendy, says they are re-evaluating because “we need to make sure we go somewhere that is contingent on the government not taking a large portion of the company’s equity if we sell it”.
The big question is: does the Luxon government have the nous to capitalise (no pun intended) on this gift Albanese and co are dropping in their laps? Nicola Willis’ “Where the bloody hell are ya? Come over” is a clever backhander of a tourism phrase cooked up by the same Australian ex-PM who coined “100 per cent Pure New Zealand”, but does her government’s political and economic acuity match it?
Australia’s loss may be New Zealand’s gain, if the Luxon government displays a rare political acumen and capitalises on it. Christopher Luxon has already started unwinding the worst of the Ardern-era tax vandalism on property. Rolling out the welcome mat for Australian capital, talent and businesses fleeing Chalmers’ ideological tantrum would be the perfect next step.
