A Treasurer with a Mandate, and a Message

When the Australian Treasurer takes to the National Press Club with a prepared script and a confident tone, investors would be wise to listen. Especially when that Treasurer is Jim Chalmers, a policymaker who, love him or not, has proven to be more than a caretaker of Treasury. He’s actively reshaping the role of government in Australia’s economic future.

After delivering two consecutive budget surpluses and navigating the country through a tricky period of post-COVID inflation and geopolitical flux, Chalmers now has the political capital, economic momentum, and likely tenure (another three years) to implement what he calls “capitalism with a public purpose.” That’s not just soundbite rhetoric. It’s a signal. And for investors, it’s a roadmap.

So what does this mean for Australian investors in property, equities, and credit over the next cycle?

Let’s unpack the key themes and how to think about positioning capital in this evolving landscape.

Property: The Era of Policy-Driven Undersupply

From Crisis to Controlled Crisis?

Chalmers’ address highlighted an uncomfortable reality: despite the rate hike cycle (which is now over), housing remains unaffordable, and the solution is not more demand-side stimulus but structurally increased supply. The budget’s $6.2 billion National Housing Accord and extended Commonwealth Rent Assistance are commendable, but they won’t fix housing overnight.

Meanwhile, migration remains high, planning remains sluggish, and developers are still facing tight lending conditions and high construction costs. The result? Undersupply in key markets like Sydney, Melbourne, and Brisbane will persist, pushing rents higher and squeezing yields upward.

Investment Insight

For investors, the playbook is not to speculate on rapid capital growth. It’s about yield, scarcity, and regeneration. High-quality residential REITs, build-to-rent infrastructure, and suburban land banking in growth corridors are increasingly attractive. Look to companies involved in modular construction and property tech, particularly those that help scale housing efficiently.

Commercial real estate, especially office, still faces headwinds but to us that remains the stand out opportunity. Industrial and logistics property remains a secular winner (but still expensive), particularly in the context of “A Future Made in Australia” reshoring.

Equities: Government as Catalyst, Not Competitor

Strategic Sectors Are the New Growth Stocks

One of the clearest signals from Chalmers is that the government will not stand on the sidelines. Whether it’s clean energy, critical minerals, defence tech, or advanced manufacturing, Canberra is stepping in, not to nationalise, but to catalyse.

The “Future Made in Australia” Act is designed to de-risk private investment in national-interest sectors. For equity investors, this is a green light: companies aligned with national policy will likely benefit from favourable capital treatment, faster approvals, and co-investment opportunities.

Think:

• Critical minerals: ASX-listed producers with downstream ambitions.
• Renewables infrastructure: Particularly firms with grid, battery, or hydrogen exposure.
• Advanced industrials and defence contractors: Particularly those aligned with reshoring, digital sovereignty, or regional security.

Investment Insight

In this environment, equity selection becomes as much about macro understanding as micro valuation. Companies that can tell the right “nation-building” story to policymakers and capital markets alike will trade at a premium.

The key here is to filter between companies that are policy-aligned but also commercially viable. Don’t chase hype, follow balance sheet strength, cash flow quality, and institutional backing.

Credit: Stronger for Longer, but Differently Positioned

From Rate Risk to Credit Risk

With inflation moving back within the RBA’s target band and two budget surpluses under Labor, we are now entering a new phase for the bond and credit markets. Yields will stay structurally higher than the zero-rate era—but the acute rate volatility is likely behind us.

In this setting, credit becomes increasingly attractive. While Labor and Chalmers are not known for fiscal prudence, budget surpluses and sector-targeted investment has helped contain bond market concerns about sovereign risk. At the same time, banks are being more selective, creating gaps for non-bank and private credit to flourish.

Investment Insight

Investors should look beyond term deposits and into credit investments that target infrastructure, housing, or business lending with tight covenants and strong origination networks. The risk is real, but so is the reward, particularly as spreads remain wide relative to historic norms.

Australian investors who previously shunned credit due to perceived risk should revisit the asset class. In a world of modest growth and steady rates, credit earns its place in multi-asset portfolios again.

Chalmers’ Strategic Capitalism: What It Means for Investors

Jim Chalmers made it clear: the next three years of economic policy will be activist, not reactive. This is not deregulated, hands-off capitalism. It’s targeted, coordinated, and deliberately aligned with structural megatrends, from energy transition to industrial reshoring.

But here’s the rub: investors who understand the direction of travel (and front-run it) will do well. Those who resist, or cling to the playbooks of the past, may be left behind.

TAMIM Takeaway: A Policy-Driven Cycle Demands a Policy-Aware Portfolio

In an age of “capitalism with a public purpose,” you can’t afford to ignore what Treasury is doing especially when Treasury is flush with cash, has political stability, and a mandate to drive national transformation.

At TAMIM, we believe the right positioning now is clear:

• Invest in property segments aligned with long-term demographic and policy tailwinds.
• Seek equities with exposure to public-private megaprojects and strategic national interest.
• Diversify into credit alongside your equity and property investments as the income-generating workhorse in your portfolio for the next cycle.

With Chalmers at the helm, the map is clear, even if the terrain remains unpredictable.