Jim Chalmers has slammed his predecessor Josh Frydenberg for mocking him about his embrace of yoga and Hindu spirituality as he laid out a vision to remake capitalism.

The Treasurer used a 6,000-word essay in The Monthly magazine to recall his former opponent's parliamentary sledge against him in February 2020 just before the start of the pandemic.

At the time, New Zealand's then first-term Labour prime minister Jacinda Ardern was popular after announcing a 2019 'wellbeing' budget and the Australian Labor Party had wanted to embrace a similar concept, following three straight election defeats.

'When Labor spoke about a wellbeing budget; the then federal Treasurer guffawed in Question Time about yoga mats and incense,' Dr Chalmers said.

'Not only did he miss the preponderance of yoga studios in his own electorate or misread the fast-growing South Asian faith communities around Australia, he misunderstood people's appetite for a more conscious sense of wellbeing. 

'He missed perhaps the key lesson of the pandemic: that healthy economies rely on healthy people and communities.'

Mr Frydenberg was attacked at the time for mocking Dr Chalmers, who holds the safe Labor electorate of Rankin, covering southern Brisbane and Logan.

'I was thinking yesterday, as the member for Rankin, [came] into the chamber fresh from his Ashram deep in the mountains of the Himalayas … barefoot into the chamber, robes flowing, incense burning, beads in one hand, wellbeing budget in the other,' Mr Frydenberg said in 2020.

'I thought to myself [what] yoga position the member for Rankin would assume … to deliver the first wellbeing budget?'

Mr Frydenberg lost his Liberal blue ribbon inner-Melbourne seat of Kooyong at the May 2022 election.

Dr Chalmers, who was raised a Catholic, was spotted last week wearing five wristbands.

Four are nadachadis, which in Hindu religion are considered 'sacred' threads which are usually blessed and tied for protection in prayer.

The nadachadis come from his local Baps Swaminarayan Temple at Kingston, in his electorate.

The fifth, a dark pink band which sits between two pairs of nadichadis is one of his daughter Annabel's hairbands.

Dr Chalmers also used his essay in The Monthly - titled Capitalism After The Crises - to hint at more government intervention into the economy, repudiating the 'Washington Consensus' formula of 'more market, not less'.

'This school of thought assumed that markets would typically self-correct before disaster struck,' he said.

The Cato Institute, an American libertarian think-tank, ranked Australia 11th on its Human Freedom Index for 2022, down from 8th spot in its 2021 report.

New Zealand, however, ranked at No. 2 after Switzerland despite having even harsher lockdown rules than Australia, because Kiwis pay far less income tax.

When it came to personal freedom, Australia scored 8.85 out of 10, down from 9.3 out of 10.

On the economic freedom front, Australia scored a lesser 8.04 out of 10, down from 8.2 out of 10.

State border closures saw Australia marked down heavily for civil liberties infringements, with a score of just 3.3 for freedom of movement, a big drop from a perfect 10 out of 10 score.

With $300billion spent on Covid welfare measures, Australia did particularly badly when it came to government spending, scoring a dismal 3.4 out of 10, down from an already bad 4.2 out of 10.

Switzerland was first overall, followed by New Zealand in second place, even though it had stricter level four lockdowns in Auckland in August and September 2021 after a single Delta case was reported.

New Zealand did much better than Australia overall because its top marginal tax rate of 39 per cent is significantly lower than Australia's 45 cents in the dollar for those earning more than $180,000.

It scored a 7 out of 10 for its top marginal tax rate, compared with Australia's dismal 4.5 out of 10 score.

Under Australia's Stage Three tax cuts, due to start in July 2024, the top marginal rate of 45 per cent is remaining, but with a higher threshold of $200,000 as the number of tax brackets is cut from five to four for the first time since 1984. 

The 37 per cent tax bracket would abolished and a new 30 per cent tax bracket created for all individuals earning between $45,000 and $200,000.

New Zealand also has a higher 15 per cent GST compared with Australia's 10 per cent.

'So, for a decade before the pandemic, when most advanced economies had a terrible record, governments and independent authorities, backed by conservative prejudices and vested interests, still mostly stuck to a negative form of supply-side economics.

'They pursued loosely defined goals for competitiveness through a race to the bottom on wages and public investment.'

Despite hailing from Labor's centrist Right faction in Queensland, Dr Chalmers appears to be lukewarm about free market economics and deregulation, blaming the 2008 Global Financial Crisis for exposing its flaws.

'While the 2008 crisis finally exposed the illegitimacy of this approach, no fresh consensus has yet taken its place,' he said.

At the time, he was a senior adviser to another Labor treasurer, Wayne Swan, when Kevin Rudd, as a first-time prime minister, wrote an essay in The Monthly criticising neoliberal economics based on the idea of lower taxes and smaller government.

The Labor Party, under former prime ministers Bob Hawke and Paul Keating, had privatised the Commonwealth Bank and Qantas and floated the Australian dollar. 

The Keating government had also introduced enterprise bargaining in 1993 so Australia wouldn't have a repeat of the double-digit wage-price spiral inflation that occurred during the early 1980s.

But under Prime Minister Anthony Albanese, Labor is embarking on multi-employer bargaining, following nine years of Australian wage rises being stuck below the long-term average of three per cent.

Labor also wants the government to play a more active role in mitigating the effects of climate change. 

'How do we build this more inclusive and resilient economy, increasingly powered by cleaner and cheaper energy? By strengthening our institutions and our capacity, with a focus on the intersection of prosperity and wellbeing, on evidence, on place and community, collaboration and cooperation,' Dr Chalmers said.

'By reimagining and redesigning markets – seeking value and impact, strengthening safeguards and guardrails in areas of unchecked risk. 

'And with coordination and co-investment: recognising that government, business, philanthropic and investor interests and objectives are increasingly aligned and intertwined.'

But Dr Chalmers acknowledged there were limits to big government spending, even though Labor has committed to keeping the Stage Three tax cuts that will cost $254billion over a decade.

'This is partly a reality of our fiscal position – the federal Budget is deep in debt and under pressure – so the options for large, broad new programs are limited,' he said.

Gross government debt is approaching $1trillion, as a result of $300billion worth of Covid stimulus spending by the previous Coalition government.

Nonetheless Dr Chalmers, a 44-year old father-of-three with a PhD in political science, is confident Labor can remake capitalism.

'My optimism doesn't just come from the beginning of a new year, it comes from believing that, amid all the difficulties, 2023 will be the year we build a better capitalism, uniquely Australian – more confident and forward-thinking,' Dr Chalmers said.