Treasurer Jim Chalmers is on his way to the US, where one of his first meetings will be with Ambassador Kevin Rudd.
Oh, to be a fly on the wall during that awkward meeting.
To put it bluntly, the two Queenslanders don’t really like each other.
Chalmers was a political staffer to Wayne Swan – the sum of his pre-parliamentary career experience – when the former treasurer and deputy prime minister famously let Rudd fly during leadership tensions more than a decade ago.
In 2012, Swan released a brutal statement criticizing the former Prime Minister with whom he had worked so closely. It came at a time when Rudd was considering a new push for the leadership, to dethrone Julia Gillard and get his old job back.
“The party has given Kevin Rudd all the opportunities in the world and he has squandered them with his dysfunctional decision-making and his deeply demeaning attitude towards other people, including our caucus colleagues,” Swan’s sour statement read.
In fact, it was political flak gun Jim Chalmers who wrote these words for his boss, reflecting a deep antipathy towards Rudd that both men share.
Rudd never forgot the attacks.
Australia’s ambassador to the US, Kevin Rudd, is known for his long memory…
In Rudd’s memoirs, he claimed that Chalmers pleaded to be allowed to retain his preselection while breaking down in tears.
He then claimed Swan was ‘incompetent’ and unfit to be treasurer, saying he only appointed him to the role to satisfy the right-wing faction operative’s ambitions.
In his memoirs, Rudd said Swan was ‘not up to the job’.
If Rudd thinks Swan wasn’t fit to be treasurer at the time, what does he really think about Swan’s mini-me ex-staffer Chalmers?
Not much, you might think, especially if you take into account the meeting between the Rudd couple that is also described in his memoirs.
After Rudd returned as prime minister ahead of the 2013 election, he claims Chalmers burst into tears during a meeting between the pair as he begged to be allowed to keep his preselection for Rankin’s Queensland seat.
According to Rudd’s account of the meeting, Chalmers flew to Canberra to meet with Rudd and “argue” for his political life.
Rudd claims Chalmers “burst into tears in front of my eyes,” after which the pair had words before Chalmers “cried again.”
Chalmers never shared his version of how the meeting went.
The former prime minister also claimed in his 2018 memoir that he never heard from Chalmers again after leaving parliament five years earlier.
That all changed, of course, when Anthony Albanese became Labor leader in 2019 and Chalmers was promoted to the role of shadow box office.
Jim Chalmers is seen smiling as he greets Kevin Rudd during Labour’s 2022 federal election campaign. Albo and Rudd have long been close
Albo and Rudd have been close for a long time. Albo was one of the few senior faction figures to support Rudd during his leadership confrontations with Julia Gillard.
When Albo became Prime Minister, he appointed Rudd as Australia’s ambassador to the US, which meant that Rudd’s path would regularly cross that of Chalmers when the Treasurer visited the US.
The latest trip comes as the IMF adjusts its forecast for Australian inflation next year, shifting it up rather than down. Not the kind of change Chalmers would particularly like.
The Treasurer has long argued that international factors are behind Australia’s stubbornly high inflation rate, but the IMF has forecast that Australia’s inflation rate will be higher than that of all advanced economies worldwide except Slovakia.
Australia ranks 40th out of 41 advanced economies – a shockingly poor result.
If the IMF is right, the likelihood that the RBA will cut rates early next year, as many predict, will likely require a deterioration in economic conditions, rising unemployment, or both.
In other words, bad economic news could lead to good news about interest rates.
With the federal election due in May next year, Chalmers will be desperate for a rate cut from RBA Governor Michele Bullock.
If Chalmers thought it would do any good, he might resort to the same plea-and-cry tactics that worked with Kevin Rudd in 2012 to convince Bullock to cut rates.
If interest rates do indeed fall early next year, despite the IMF’s predictions of rising inflation later this year, Labor will have threaded a very delicate political needle.
It could argue that it managed the economy to cut interest rates in time for the election… before bad economic news arrives later in the year, well after Election Day.
In such circumstances, Labor would be well placed to fend off a Coalition fear campaign against the economy.