The second wave of the pandemic in Victoria has pushed the post-COVID economic recovery further beyond the horizon. Among the challenges for the federal opposition are dealing itself into the debate and formulating alternative economic policies before the next election.

With speculation the budget may bring forward the next tranche of the legislated tax cuts, Labor is leaving the way open to give its support.

“We’ve said for some time that that’s something that the Government should consider. We’d have an open mind to that if they came to us with a proposal. They don’t yet have a specific proposal. We’ve had some smoke signals about it for some time now…” Jim Chalmers, Shadow Treasurer, tells The Conversation.

“If they came to us and said that they wanted to bring forward stage two of the legislated tax cuts, then we’d engage with them in a pretty constructive way. We’ve said that for some time.”

A high danger is Australia may come out the COVID recession as a more unequal society. Charmers says: “My big fear is that it will accelerate some of those trends that we were already worried about; inequality, but also social immobility.

"We are worried about a lost generation of workers, a discarded generation of people, who become disconnected from work and from society during this recession, who find it very hard to make their way back.

"When people ask what keeps us awake at night, really it’s the idea that this spike in unemployment turns into long-term unemployment, which becomes long-term disadvantage, which cascades through the generations and concentrates in areas like the one that I represent. That’s our big fear.”

At the moment, Chalmers is working in Brisbane, assisting with the campaigning for the October Queensland election, which he believes will be “extraordinarily tight”

“There’ll be different sub-elections around the place. Townsville will be a challenge for us. There’s some opportunities for us on the Gold Coast. It’ll be a real mixed bag. The big thing that we need to avoid is one of those minority governments. In this recession and into the recovery, we want to have a stable government like the one that Annastacia Palaszczuk is providing.”