Labor to target ‘middle Australia’ in election as cost of living rises

The Labor Party will channel Robert Menzies and his “forgotten people” in the run-up to the next election, with shadow treasurer Jim Chalmers pledging to target middle Australia with its suite of economic and budget policies.

In a wide-ranging address on Wednesday evening about Australia’s post-pandemic economic recovery, Dr Chalmers said the country’s middle class had been squeezed before the coronavirus recession and were now hurting from even more financial pressures.

Shadow treasurer Jim Chalmers said any plan to strengthen the recovery needs to focus on more job security and opportunities for middle Australia.Credit:Alex Ellinghausen

Ahead of the 2019 election, Labor openly targeted the “big end of town”. Its review of that year’s election loss noted these attacks ignored the large number of people employed by businesses and “amplified perceptions Labor was a risk to the economy and jobs”.

In a sign of Labor’s approach to next year’s poll, Dr Chalmers told a meeting of the Economic Society of Australia the country’s middle class was already smaller than its international counterparts and now accounted for 58 per cent of the population.

He said a decade of slow wages growth and poor economic growth was now being amplified by inflation pressures, particularly in terms of petrol prices and housing construction costs.

“No wonder the middle class is being squeezed, getting smaller, older, poorer, less mobile, more difficult to get into and harder to stay in,” he said.

“Any plan to strengthen the recovery and target growth needs to focus on more job security and more opportunities for middle Australia.”

The pandemic has left the federal budget mired in the red with gross government debt at a record $861.5 billion. The Parliamentary Budget Office this week estimated the budget would remain in deficit until 2061.

Dr Chalmers said Labor’s fiscal policy would focus on “bang-for-buck” investments that would help the economy and improve the quality of peoples’ lives, eliminating wasteful spending and ensure multinational businesses paid appropriate tax.

He said the budget process would include measures of progress and personal wellbeing, an intergenerational report every parliamentary term, more information about tax concessions and eventually an “evaluator-general” who would examine if new policies are working.

Labor would also undertake a review of the Reserve Bank, including the relationship between fiscal and monetary policy settings. Treasury would model the impact of climate change on the economy as well as examine its impact on financial market disclosure and company governance.

Dr Chalmers said rather than only focusing on the size of the upcoming budget deficit, Labor would look at how taxpayers’ money was spent.

“In election campaigns, the focus has been on the difference in levels of spending, not the quality of spending,” he said.

“I will be asking our alternative budget to be judged not on whether it’s a little bit bigger or a little bit smaller than our opponents.”

The president of Chief Executive Women, Sam Mostyn, had earlier called on the government to consider “wholesale immediate change” in areas such as childcare, government leadership on superannuation on paid parental leave and higher pay for those working in care roles to help the post-pandemic economic recovery.

Sam Mostyn, President of Chief Executive Women said politicians need to back election promises with long-term plans that helped families and women.Credit:Alex Ellinghausen

Speaking at the National Press Club on Wednesday, Ms Mostyn said the federal election period was one with “high intensity short-term promises” and politicians needed to back them with long-term plans that helped families and women in particular.

“[We] are moving quickly into a federal election campaign in which the visual cues of hard hats and are accepted as the most powerful way of representing the value of jobs and infrastructure,” she said.

“What we virtually never hear is how care and economic performance and success go hand in hand. They are inextricably linked as the foundation of our future prosperity.”

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