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By Mark Kenny
A version of this article was originally published by The Canberra Times.
Jim Chalmers is wrestling a conundrum right now.
One minute he is on top, the next, it threatens to pin him to the canvas. Even in his own party, a backlash is brewing as MPs, state and federal, feel the heat from electors.
The gently spoken Treasurer is hardly the "brawler statesman" he depicted Paul Keating as in a doctoral thesis, but as both theoretician and politician, Chalmers is Labor's best advocate, skilled in policy, politics and polemics.
The conundrum with which he tangles though trumps all of these. It is, in a word, trust, and the context in which it arises, heaves with irony. Newly determined to fix intergenerational inequality, Labor has backflipped from an explicit promise of its 2025 election campaign.
So, while honourably resuscitating the plausibility of home ownership and prosperity for Millennials, Chalmers' fifth budget simultaneously has tarnished these and other voters' trust in the reliability of this government and perhaps all governments.
This is not nothing. At a time of reckless disruption, it's a significant gamble. And that's before you get to the other frictions in this budget - things like the new minimum tax treatment of trusts.
Incorporating other asset classes into a reform that had been initially - and primarily - justified as targeting soaring high house prices, has become a major budget-sell embuggerance.
Labor MPs are nervous. Compromise seems likely. Retreat cannot be ruled out.
A viral meme-tide positioning Anthony Albanese as an unwelcome 47 per cent partner in businesses across the country has sprung up catching the government flat-footed. The PM has yet to find the right form of rebuttal, but it is telling that he was targeted rather than the Treasurer. That was clever.
Such is the new loucheness of public debate, however, that the meme's originators simply laughed off the charge of peddling deliberate falsehoods, admitting their 47-per-cent claim was nonsense, but had grabbed everyone's attention.
Most ministers have looked unconvincing when explaining why a foreshadowed fix to the 50 per cent capital gains tax discount and negative gearing on rental properties, had roped in businesses including low-capital, high-risk, high-growth, start-ups at the point of their disposal.
In the fortnight since the budget, debate has turned on dodgy claims like that young entrepreneurs will walk away if required to pay tax at the same marginal rates as wage and salary earners. Really? How many?
Just as discounted capital gains and negative gearing turned housing into a zero-risk investment, wage and salary earners are expected to pitch-in for start-ups.
Another uninterrogated assumption is that the only reason somebody starts a business is to sell it, lickety-split. But what if they planned to grow it, diversify, innovate further and draw a solid ongoing income? It is as if such possibilities either don't exist or, alternatively, couldn't become a more common option across the economy under less distortionary tax arrangements.
Labor's budget should get marks for its boldness and its principled attempt to unify tax liabilities across income earned from labour or from assets, whether property, shares, trusts or businesses.
But the compromised antecedents of that rationalisation, and the complicated, collateral reach of the changes, suggest the government may have already snatched defeat from the jaws of victory.
Chalmers, at least, believes the substance of the policy justifies the transactional cost. "The most important thing is that we get the policy right, even if that necessitates a change in view, and, even if that means we get some political grief about changing our mind, I do think it's worth it to get the right outcome," he tells me.
But is the current atmosphere amenable to such a trade-off, or does the broken promise simply dominate everything else and stoke even greater cynicism?
With voter loyalties already weakening, Labor's huge majority is certainly more vulnerable than it looks. Issues like migration, and a 25 per cent gas tax seem to be cutting through, reaching across other ideological faultlines.
If the South Australian election did not hint that Labor's blue-collar base is increasingly vulnerable to One Nation, then new MRP data analysis from Redbridge pollster Kos Samaras should help clarify things.
The survey findings of 6015 voters polled mostly before the Budget and published on Saturday by the Australian Financial Review Weekend/Redbridge Group/Accent Research, points to a potential cataclysm in Australian politics.
It shows One Nation, currently with just one elected MP (and one defected) in the lower house, catapulting into second place, were an election held now.
The far-right fringe party could secure as many as 59 seats (high estimate) while the Nationals could be wiped out entirely. The Liberal Party would have as few as seven seats nationally and just 17 at the highest estimate. Labor's majority could be all but obliterated.
Both Angus Taylor and his party's alternative leadership option, Andrew Hastie, would lose their seats - even on the best-case scenario.
Findings like this suggest a radically different Australia and an almost unthinkable headline: "Barnaby Joyce, Australia's smartest politician".
In other words, don't imagine his defection will be the Coalition's last.
Mark Kenny is the Director of the ANU Australian Studies Institute and host of the Democracy Sausage podcast.