Date posted: 03/08/2018 15 min read

The money man: Chris Bowen

He wants to become a great Labor treasurer in the mould of his hero, Paul Keating. And Bowen has enlisted the man himself to help.

In Brief

  • Chris Bowen has spent years studying the job of Australian treasurer.
  • His circle of advisers includes businesspeople, ex-ministers – and Paul Keating.
  • His tax plans are among the most daring put to the electorate in recent decades.

No would-be Australian treasurer has been as prepared for the job as Chris Bowen.

Labor’s shadow treasurer has already done the job, for 83 days. He was appointed treasurer by Prime Minister Kevin Rudd in June 2013 in the frenetic last days of the previous Labor government. Soon after Labor’s landslide loss that year to Tony Abbott’s Coalition, he wrote a serious book about the role of treasurer – The Money Men, which delved into the lives and times of the 12 “most notable” of Australia’s 39 treasurers. And now he’s now the second longest-serving shadow treasurer.

“I’ve had a lot of time to think about it,” he muses, talking to Acuity from his high-rise Sydney office. Five years after his first short stint in the job, and less than a year from the next federal election, the self-effacing, studious Bowen is the person most likely to succeed Scott Morrison as treasurer – at least according to the polls and bookmakers at the time of writing.

Picture credits: James Brickwood/Fairfax

He hasn’t just sat around waiting for an election win to arrive. His willingness to go out on a limb with controversial tax proposals, such as curbing negative gearing and stopping cash refunds for dividend imputation credits, has put him at the centre of the political debate.

And he’s also picking the brains of perhaps the most notable ex-treasurer of them all.

A man of ideas

Bowen’s book was an early sign of a politician more interested in ideas and performance than personality. It eschewed the cookie-cutter, “my life in service” format beloved of ambitious politicians. Instead it assessed records. He reserved the gold star for his hero, the icon of NSW Labor moderates, Paul Keating. 

“Australia’s 24 years of uninterrupted economic growth has many parents, but Keating is entitled to be regarded as the most important of all,” Bowen wrote. 

Peter Costello, Australia’s longest-serving treasurer, he described as “technically competent, solid, not a great reformer”. It’s not hard to see who Bowen views as his measuring-stick.

Working class upbringing

Like Paul Keating’s feisty outlook, Chris Bowen’s view of the world was shaped by a working class upbringing in the hot, flat suburbs of western Sydney. He joined the Labor Party at 15. 

“I grew up with the smell of poached eggs and scotch for a big chunk of my childhood,” Bowen says, recalling his father’s habitual dish on returning home from work as a dispatch clerk at the NRMA, where he did the 11pm to 7am shift. “He had a big map of Sydney on the wall at work: red pins for broken-down cars and blue ones for mechanics. He had to connect them in the most efficient way. I’m a sure a computer does that now.”

Bowen went to state schools – first Smithfield Primary and later St John’s Park High School. “I went to an under-resourced school from an under-resourced area. Politics seemed to be the only way to fix inequities, and the Labor Party the only party that cared,” Bowen says.

He headed towards politics early, a direction he credits to reading and observation rather than parental influence. “I won the school citizenship award in 1984 at primary school, and with the A$10 book voucher I bought Paul Kelly’s The Hawke Ascendency,” he reveals. His parents joined the party only later on, “because of me”. 

The first in his family to attend university, he studied economics at Sydney, whose famously left-wing faculty featured Yanis Varoufakis, who was later Greek finance minister as the nation teetered on default in 2015. Bowen majored in industrial relations and economic history. “I was tempted to do honours. But to be honest, my parents were a bit hard up and my mum needed to retire, and she was basically working because I wasn’t. So I declined,” he explains.

Out of university, his was a meteoric rise. At aged 25 he was mayor of Fairfield City Council; soon after he became chief of staff to NSW transport minister Carl Scully. The 2004 federal election put him in federal parliament. In December 2007, aged 34, he became assistant treasurer in the Rudd government, later serving as minister for financial services, immigration and small business – plus, at the end, those 12 weeks as treasurer.

His seat of McMahon includes his childhood territory of Smithfield as well as areas like multicultural Fairfield, where more than half the residents were born overseas and more than 70% speak a language other than English. He won more than 53% of the first preference votes at the 2016 election, making it one of the safest Labor seats in the country.

A book in his hand

In parliament, he quickly got a reputation for seriousness. “He’s always been a person who was more mature and well-rounded than the rest of us,” says Jason Clare, his federal ALP colleague in the nearby seat of Blaxland. “Born with a level head. Very practical and thoughtful.” Bowen shares a Canberra flat with Clare and fellow Labor MP Ed Husic. “He’s the third member of our ‘frat house’,” says Clare, “always with a book in his hand reading, usually about Australian, American or British politics.”

“Chris has never read an economic policy Yanis didn’t like,” jokes Jason Falinski, a federal Liberal MP who was in the same economics class as a “very serious” Bowen. They were on opposite sides of student politics at the time. “We weren’t enemies,” says Bowen. “I recall a couple of debates in tutorials where he said ‘correct me if I’m wrong’ and I did.”

If Bowen had a radical edge in his student days, he’s mellowed. Tom Switzer, executive director of the traditionally Coalition-aligned Centre for Independent Studies, has been impressed by “how sensible he is on economic reform and the Hawke-Keating legacy – something that some might say should look like a pretty profound disqualification from running today’s Labor Party’s economic policy agenda”. Adds Switzer: “He’s easily the best of the Labor Party frontbench on public policy”.

I’m not Paul Keating, I’m a different person and I have a range of senior people in business and senior former ministers whom I talk to – who I wouldn’t name of course
Chris Bowen current Shadow Treasurer of Australia

The Hawke-Keating legacy looms larger for Bowen than for most Labor MPs; his admiration for Keating has now turned into a close political relationship. Bowen says he “speaks most days” to Paul Keating.

Having revealed the depth of the relationship, he soberly plays it down. “It’s a very valuable relationship, but one of many. I’m not Paul Keating, I’m a different person and I have a range of senior people in business and senior former ministers whom I talk to – who I wouldn’t name of course,” he says.

Policies for the decades

Bowen, Bill Shorten and the ALP leaders need all the advice they can get. The next federal election will be the first fought substantially on tax policy since the Coalition advocated a goods and services tax from government 20 years ago. The Coalition nearly lost. Bowen’s announced policies on negative gearing and dividend imputation already make up the boldest set of tax ideas from an opposition since John Hewson’s 1991 Fightback package – the one Keating destroyed over the course of 15 months.

“You write these policies for the decades, not for one particular cycle,” Bowen says. He dismisses suggestions that curbing negative gearing will become a political albatross if house price falls gather pace in Sydney and Melbourne. “The interaction between the capital gains tax discount and negative gearing has led to a supercharging of debt which is a uniquely Australian phenomenon,” he says.

The government has seized on the specifics of Labor’s proposed changes – worth more than A$200 billion in extra revenue over a decade – releasing “scary” Treasury analyses of the effects. Bowen bristles at what he sees is a “most regrettable politicisation” of the public sector. “I won’t be engaging in that sort of activity. It’s an abuse of the Treasury which I have enormous respect for,” he says.

The changed relationship between ministers and public servants is a theme he warms to when he discusses former Treasurer Joe Hockey’s replacement of Treasury Secretary Martin Parkinson with John Fraser. “It was a big mistake ... not because of him but because of principle,” he says. It was, he says, the first time in 113 years that a change of government led to a change in treasury secretary. A resurrected Parkinson now heads the PM’s department; Bowen, meanwhile, is carefully leaving the door open for a “mutual understanding” with current Treasury secretary John Fraser, “like Keating and John Stone did”.

Against unaffordable cuts

Labor remains unconvinced by the second and, especially, the third phases of the government’s seven-year tax package, which would lift the top marginal income tax threshold to A$200,000 in 2024 and scrap the second highest 37% rate. “Say we lost this election and the one after; you could very conceivably see a Liberal treasurer saying ‘we can’t afford these cuts now’,” he says.

And he plays down the likelihood of any lowering of income tax rates under a Labor government: “The days when you could just cut rates and not worry about budget surplus are over. No treasurer can sustainably do that now.”

He also bats away arguments that the top 47% marginal tax rate, currently applied to incomes from A$180,000 up, kicks in at too low a level. “We’re never going to compete with Hong Kong and Singapore on tax, we’re on a completely different playing field. If these things were determined by tax, well, no-one would work here.”

Factoring in the government’s planned changes, the top threshold will in effect be equivalent to around 1.9 times average weekly earnings in 2024, compared to three times when it was first set in 2008.

Indeed, under Labor the top rate would rise to 49%, for a time at least. “We’ve said we’d review the reimposition of the deficit levy when we’re back into a healthy surplus. We’ll say more about what that looks like when we’re closer to an election,” he says, stressing it’s “by definition not a permanent change”.

Labor’s even less in favour of the government’s plan to cut company tax to 25% by 2026, stalled in the Senate for more than two years. “When and if circumstances change we’ll weigh up all the options [over] whether it’s a flat or lower rate. But we’re some way off that in my view,” he says.

The banks and super

Bowen got his first taste of the banking industry as a finance union organiser in the 1990s. “I had to sort out the money market dealers and business bankers. I had to explain the union can still add value,” he says with a grin. “I always thought the Royal Commission would uncover serious issues, but I don’t mind saying I’m surprised by the ferocity of revelations and speed of them,” he adds.

He concedes the problems outlined by the Productivity Commission’s recent inquiry into the inefficiency of the super system warrant scrutiny, but Labor is wedded to lifting the compulsory rate from 9.5% to 12%. “It’s too early to tell whether MySuper should be declared a failure,” he adds optimistically, referring to the “no-frills” funds Labor mandated in government, many of which the Commission found to be draining members’ savings.

A leader of the dominant centrist Labor right faction, Bowen’s respected rather than feared by his peers. “I wouldn’t call him a factional powerbroker; he’s a wise head,” says Jason Clare. “When Chris speaks, people stop and listen.”

Labor has been ahead in the polls for almost all the time since Malcom Turnbull snuck back over the line by a handful of seats at Australia’s 2016 election. But if his party and leader strike serious new political strife in the coming months, Bowen will stand a good chance of succeeding Bill Shorten.

Either way, Bowen, now 45, will remain at the vanguard of the Labor party. “His knowledge is deep, his thinking penetrating, his writing elegant. He is a man of great ability and intellect with much to contribute to public life,” Tom Switzer says.

Neither weak nor mad

Keating is not the only Labor treasurer whom Bowen admires. He singles out Bill Hayden, Gough Whitlam’s last treasurer and later governor-general, for high praise. “If he’d been treasurer for the entire Whitlam government, the history of the ‘70s and ‘80s would have been very different – still doing the big social things but in a fiscally responsible way,” he says. “The first treasurer, Frank Crean, was too weak; Jim Cairns was too mad.”

After all those years of learning, Chris Bowen may be about to find out whether he can be strong enough and sane enough to join the list of Australia's notable treasurers.

Adam Creighton has worked for the Reserve Bank of Australia and the Wall Street Journal and is currently economics editor at The Australian.

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