One of the Prime Minister’s closest allies, Environment Minister Murray Watt has called on colleagues to stop undermining Treasurer Jim Chalmers, praising his fellow Queenslander’s record and reminding Labor MPs to “work together”.

Over recent weeks reports have emerged of growing tensions between Dr Chalmers and Prime Minister Anthony Albanese, with suggestions the Treasurer could be eventually replaced in a frontbench reshuffle.

Asked by The Nightly whether he’d “like to see an end to the undermining and leaking against your Treasurer?”, the Environment Minister and senior Left faction member responded: “Yes, I would”.

“As a member of the Government, I take seriously the responsibility to work together to support Government policies and also to get our work to support each other in what are very difficult times.”

“I think that Jim Chalmers is doing an excellent job as a Treasurer in what are very difficult economic times, many of the features that are impacting on our economy are sort of well outside any treasurer’s control, and I very much support Jim Chalmers in his efforts.”

Senator Watt, who is in Canberra for budget meetings with Cabinet colleagues, including Dr Chalmers, was then pressed on if he was confirming that the Treasurer was being undermined from his own side.

“It’s pretty obvious that there are all sorts of people making all sorts of comments,” the senior Albanese Government minister responded.

“My view is that whether you’re a member of the Government as a backbencher or as a minister, your responsibility is to work together to be travelling as well as it possibly can be, and to ensure that Australians know the choice that’s available between a Labor Government focusing on Australians’ needs and a One-Nation Liberal coalition that would actually make matters worse for Australians.”

Last week Labor MPs told The Nightly they believed there has been a concerted campaign from some of their colleagues internally to undermine Dr Chalmers over unpopular measures in the May Budget.

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A recent article by veteran political columnist Niki Savva suggesting “the usual tensions between prime minister and treasurer, which simmer when the Government looks cooked, could easily boil over” has heightened the discussion.

The article published last week also talks up the prospect of rising star and Health Minister Mark Butler as “the most likely successor to Albanese — then, surprise, speculation Chalmers could be sacked as Treasurer and replaced with Butler”.

Throughout 2026 Minister Butler’s public profile has steadily risen with the South Australian now considered the most likely future Labor leadership option from Mr Albanese’s own left faction.

On Monday members of Labor’s expenditure review committee of cabinet met to discuss the budget cuts, a week after the latest interest rate hike from the Reserve Bank.

The governor, Michele Bullock, said while it is up to governments to manage their budgets independently of the RBA, public and private spending had caused “excess demand” in the economy.

Senator Watt accused the Coalition and minor parties of leaving existing spending proposals to linger in parliament, including savings from changes to the private health insurance rebate for over 65s.

“Let’s not forget that for all of their demands that we find more savings, the Coalition currently are blocking the government from saving $10 billion in measures that are before the parliament,” Watt told reporters in Canberra.

Shadow treasurer Tim Wilson has seized on Minister Watt’s acknowledgement on Monday of Government figures undermining Dr Chalmers, saying the Treasurer has only himself to blame.

“Labor backbenchers will be hearing from their communities how unpopular the Treasurer is because he keeps telling Australians they have to pull their belt in, while he won’t kick his own spending addiction which is fuelling inflation,” Mr Wilson told The Nightly.

Dr Chalmers, a Right faction Labor figure and long considered a future PM, is widely perceived as having suffered significant political damage following broken promises in the May Budget.

Other potential leadership contenders such as Home Affairs Minister Tony Burke are also perceived to have suffered political damage in the past year, along with Energy Minister Chris Bowen.

Discussion over a looming Government frontbench reshuffle also involves speculation about the future of key ministers including Foreign Minister Penny Wong, Trade Minister Don Farrell, Transport Minister Catherine King and Education Minister Jason Clare.

Figures close to the PM insist Senator Wong and Farrell are unlikely to leave politics before the next election, but there is increasing anticipation that ministers King and Clare will announce their departures in the new year.