The most disappointing thing about Jim Chalmers is that there are so many reasons he should be a better Treasurer.

Chalmers is intelligent, well-educated and comes from the sort of background that ought to keep an economic policymaker nicely grounded.

He’s certainly no nepo-baby pretending to be a man of the people.

His journey from working-class Logan in Brisbane to the federal Treasury should be a Labor good-news story.

Instead, it increasingly illustrates the distance between understanding disadvantage and understanding how to overcome it.

Forget the cheap shot I and others have made that he lacks an economics degree. So did Paul Keating and Peter Costello. Chalmers has degrees in commerce and arts, first-class honours in public policy and a doctorate examining Keating’s prime ministerial leadership.

His problem isn’t insufficient education. It’s insufficient willingness to question the assumptions he brought into office.

Growing up in Logan, in the electorate he now represents, should provide an instinctive understanding of what inflation does to a household without financial cushioning. Being a Queenslander should also help him recognise how little patience voters outside the progressive metropolitan bubble have for ideological self-congratulations.

‘Chalmers is intelligent, well-educated and comes from the sort of background that ought to keep an economic policymaker nicely grounded,’ writes Peter van Onselen. (Jim Chalmers is pictured with his wife, Laura)

His own advancement demonstrates the value of education and opportunity. The challenge is to build an economy that makes such advancement possible for others, especially within the private sector rather than simply within the political bubble.

Chalmers entered Labor’s tribal world young and built his career largely inside it. He lacks substantial private-sector experience, something Pauline Hanson scolded him for during the week. Neither fact, however, disqualifies him from higher office. Again, Keating was hardly a corporate executive parachuted into politics.

The distinction is that Keating learned to see beyond the institutions and prejudices that had formed him.

He understood that caring about working Australians requires more than protecting existing arrangements or promising a larger government cheque. It needs a more productive economy capable of supporting higher living standards.

Growing the pie, as Keating liked to put it, matters as much as arguing over its divisions.

That insight challenged Labor’s inherited economic reflexes. Protection can preserve an industry’s privileges while making everyone else poorer. Sheltering the economy from competition shelters it from genuine improvements.

Keating did not arrive in Treasury with every answer. Far from it. But he allowed the responsibility of office, expert advice and economic reality to change his thinking.

The Campbell Inquiry, commissioned by the Fraser government, provided important recommendations that remained substantially unfinished business. I remember Keating joking to me that he discovered the report gathering dust on the shelf after taking over as Treasurer.

Paul Keating is pictured with his former wife, Annita van Iersel

Under Bob Hawke and Keating, Labor floated the dollar and opened up the financial system. The wider reform project dismantled tariff barriers and reshaped taxation in this country.

These were politically difficult choices made because Labor understood that its social ambitions depended on economic success.

Chalmers studied the man, but too often he seems to have missed the lesson.

His more immediate apprenticeship was with Wayne Swan, for whom he served as chief of staff. Swan deserves some credit for helping steer Australia through the global financial crisis. But emergency economic management is a different task from building a lasting reform settlement.

My concern is that Chalmers has absorbed more of Swan’s political defensiveness than Keating’s intellectual restlessness. He is fluent in the language of fairness, inclusion and investment. The harder question is whether his policies make it easier to produce, compete, employ and take risks.

Consider Labor’s expanded five per cent home deposit scheme. It removed income caps, uncapped places and raised property price limits. Helping more buyers bid for scarce housing risks pushing prices higher before supply catches up. Getting someone over the deposit hurdle is not the same as making the house more affordable.

Or take the Australian Taxation Office credit card debacle. A surcharge ban promoted as consumer relief was followed by the tax office deciding to stop accepting credit cards. Small businesses faced losing a cash-flow tool until Chalmers announced taxpayer funding to keep payments going until the end of the financial year. If Albo is to be believed, he forced Chalmers’ hand to make that change.

A foreseeable implementation problem became an expensive rescue operation. That is what happens when the political appeal of a policy runs ahead of attention to how it works.

To be fair, making the $20,000 small business instant asset write-off permanent is a useful investment measure. So are efforts to streamline approvals and reduce regulatory duplication. But they are relatively minor initiatives.

And those measures need to form a consistent economic approach. It makes little sense to promise businesses less red tape while leaving them scrambling over how they can pay their tax bills.

With weak productivity constraining the economy and the Reserve Bank lifting rates again in September, the test is whether the government’s overall direction expands productive capacity and restrains inflationary pressures.

Global shocks matter, but they also make domestic discipline more necessary. They can’t be used as an excuse.

Chalmers should be asking what government can stop doing to help. Which spending fails to justify its cost? Where does regulation protect insiders at everyone else’s expense?

Fairness can’t be measured solely by who receives assistance. It must include who pays for inefficiencies.

There is, of course, a substantial obstacle sitting in the Prime Minister’s office: none other than Albo himself.

Keating had Hawke, a leader capable of building consensus around difficult economic changes. A Rhodes scholar who understood economics deeply. Chalmers has a PM whose political understanding owes far more to factional combat and a lifetime on the public teat, rather than to economic reform.

Albo’s natural instinct is to manage Labor’s constituencies. The Treasurer’s responsibility is to challenge that when their demands conflict with the national interest.

John Howard made precisely this point during the week, arguing that a prime minister and treasurer need ‘constructive tension’. Chalmers should pay attention to Howard’s words. A Treasurer’s usefulness can’t be measured by how rarely he inconveniences his PM. Sometimes making life difficult for the bloke in charge is precisely what the job requires.

Chalmers lacks the additional authority of being party deputy. But being overruled after making a serious case for reform would be one thing. Failing to make that case because he fears being overruled in the first place is quite another.

Albo’s dominance might explain the limits on Chalmers’ authority, even his character. It can’t excuse the limits on his ambition for the economy.

Daily Mail political editor Peter van Onselen says Jim Chalmers had all the ingredients to make a great Treasurer – apart from one crucial one

Labor’s ascendant Left further complicates matters. A Queensland Right Treasurer can’t assume that being good at his job will one day deliver him the party leadership. Nor should he assume the broader Right will unite behind him. The NSW Right are no fans of the Treasurer.

But that should be an argument for greater courage, not showing less of it. Excessive caution could leave him with neither a reform legacy nor the prime ministership.

If the pathway to the top is uncertain anyway, why spend his Treasury years behaving as though every difficult decision might jeopardise a guaranteed succession when there isn’t one?

Jim could (and should) chance his arm. Make the economic arguments the nation needs made. Build support beyond his small Queensland Right faction. Force the government to confront the difference between policies that flatter Labor’s identity and those that improve Australians’ prospects.

Chalmers has the intelligence, the education and the life story for politics. What remains in doubt is whether he has the capacity to grow beyond his political apprenticeship.

He wrote a doctorate about Keating’s leadership. It’s time for Chalmers to demonstrate that he learned something from it.