Grattan on Friday: Master communicator vs master tactician, the race between Chalmers and Burke

It was a classic “old bull” versus “young bull” struggle, and the old bull showed he had life in him yet.

Paul Keating was only one among many critics of the controversial aspects of Treasurer Jim Chalmers’ proposed superannuation tax changes. But as the father of national superannuation, the former treasurer enjoyed a special advantage when it came to lobbying.

Keating wasn’t going to be denied. He was in Prime Minister Anthony Albanese’s ear as well as badgering Chalmers. (Chalmers revealed he’d spoken half a dozen times with Keating just in the second half of last week when recrafting the superannuation package.)

Albanese, naturally cautious when pressure mounts on unpopular measures, drove the retreat announced by Chalmers on Monday. The reworked package (which still faces the Senate hurdle) increases the tax on big superannuation balances but drops the earlier plan to tax unrealised capital gains. And unlike the original one, it also includes indexation for affected balances.

After the victory, Keating issued a statement lavishing praise on Chalmers for the revised version. But it couldn’t alter the reality. After months of limbo, Chalmers had been publicly humiliated.

The revamped arrangements, which involve separate higher tax rates for balances over $3 million and $10 million respectively, plus more help with superannuation for low income earners, do make the super system fairer. And they bring some help for the budget, albeit less than the original plan, which was to take effect sooner.

Chalmers tried to put the best spin on it, denying he had been rolled by Albanese. But this has been one of the most difficult weeks of his time as treasurer.

In the public’s mind, Chalmers is the obvious next Labor leader. After the huge election victory, Albanese might look like going on forever, but politics doesn’t often work like that. Many in Labor, if pushed, would predict the prime minister will win the next election and then depart sometime during his third term.

Chalmers will want, and need, this second term to be a showcase for his credentials for future leadership.

A few years ago, Labor’s talked-about potential leadership field was quite extensive: Chris Bowen, Tanya Plibersek and Jason Clare were among those on the list. Now it has narrowed, probably to Chalmers, Tony Burke and Richard Marles.

Of these, Chalmers, 47, and Burke, 55, are considered (at this stage) the leading contenders (although Marles certainly hasn’t given up). The two men are a study in contrasts, and the contest between them for long-term ascendancy may be tighter than it appears at first glance.

While Chalmers was licking his wounds this week, Burke was appearing at the National Press Club, announcing new measures to crack down on crypto crime.

Looking to the top job, Burke has the advantage of being from the factionally-strong NSW right. He is close to Albanese, who’s from the NSW left. In that state, right and left can make common cause when they choose; the right helped deliver support to Albanese for the leadership in 2019.

For most of Labor’s first term, Burke was in the workplace relations portfolio, where he delivered in spades to the union movement. His own origins are in the powerful Shop, Distributive and Allied Employees’ Association (SDA).

Later he was moved to his present post of home affairs minister, after the government found itself in a world of trouble over the former immigration detainees, released after a High Court judgement.

Burke’s performance in this role has been politically masterful. One of his advantages for Albanese is his skill with the broom – he’s the man to clean up messes.

He pulled off an extraordinary deal to relocate the ex-detainees to Nauru. He sought a way to minimise angst over the return of Islamic State brides (though he was partly thwarted by the fact Senate estimates hearings were on last week, giving more opportunity for questioning).

Burke has rebuilt the home affairs behemoth, which Labor, having condemned its reach in opposition, had earlier substantially dismantled. ASIO, the Australian Federal Police and other agencies are back under the home affairs minister. Burke told the National Press Club on Thursday, “when we have a convergence of threats we need to have a convergence of protection”.

Burke is also Leader of the House of Representatives, a position that both gives him power to maximise Labor’s parliamentary advantages, and also provides routine contact with caucus members, a chance to win friends for the future.

Burke has less of a presence in the public market place than Chalmers, who is (and seeks to be) constantly in the media.

Like Burke, Chalmers is from the right but coming from Queensland means he has a smaller base. If Chalmers is eventually to reach the leadership, he must rely on building a reputation as a reformer and on his sales skills.

But just how much reform will he be able to produce?

Chalmers made it clear after the economic roundtable that he is looking to tax reform, which was supported in broad terms by many participants. The knock he took on superannuation, however, will reinforce his fear Albanese won’t be up for major tax changes, which would likely cost the government political capital. Labor almost certainly cannot be defeated at the 2028 election, but Albanese will want to keep intact as much of the majority as possible.

The roundtable was a pointer to Chalmers’ ambition generally. Albanese announced it as a roundtable on “productivity”; Chalmers renamed it as one on “economic reform” and put in a tremendous effort to have ministers involved and to achieve results. At the end of the three days he announced a long list of initiatives centring particularly on reducing red tape and clearing bottlenecks. But many were speeding up existing efforts or otherwise incremental. In one area, a new road user charge, progress appears to going slowly, despite Chalmers hoping for fast action.

There’s general agreement in Labor that Chalmers is the government’s best communicator. But insiders watching this race know Burke is the master tactician. Journalist Phillip Coorey recently described him as “probably one of the best practitioners of the dark arts”. Burke may not wear his ambition on his sleeve to the extent Chalmers does, but it burns intensely and he is not to be underestimated.