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End of entitlement

Treasurer Joe Hockey has flagged the government's plan to cut back on 'corporate and middle class welfare', while remaining committed to delivering a generous paid parental leave scheme.

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Joe Hockey has invited Australian businesses to ready their cheque books, talking of a new era of privatisation aimed at unlocking billions in private cash reserves, and using the proceeds to fund infrastructure.

''The bottom line now is we need to recycle precious taxpayers' money from existing assets that the private sector wants to own, that your superannuation [fund] is desperate to own,'' the Treasurer told the Lowy Institute.

Treasurer Joe Hockey in his Parliament House office in Canberra

''Difficult decisions'': Joe Hockey. Photo: Andrew Meares

''The private sector is cashed up around the world. Governments are not. We need to facilitate that private sector investment.''

The call came as Canberra looks to sharply rein in spending despite the risk of exacerbating soft economic growth, rising unemployment and higher inflation.

Arguing that the government had done all it could, Mr Hockey said ''cashed-up'' businesses needed to shoulder more of the burden, stop relying on the government for handouts, and be prepared to pay their fair share of tax. ''Governments are very bad at picking winners - losers are very good at picking governments,'' he said.

Mr Hockey said it was time to get growth going with private capital now that the public purse has been exhausted, bridging the economy across the global financial crisis.

Railing against ''corporate and middle-class welfare'' soaking up ''too many taxpayer dollars'', he said ''previous governments have been drawn into areas that are better left to the private sector''.

''Not only are these policies an unsustainable use of taxpayers' funds, they also undermine economic incentives, our productivity and ultimately our national prosperity,'' he said.

The entreaty reprised Mr Hockey's recent ''end of entitlement'' declaration but also went further, echoing some of the claims of the past Labor government, including the observation that Australia was now in its 23rd year of unbroken growth.

That record, however, had come at a cost to the budget bottom line.

''Australia had the good fortune to be relatively unscathed by the global financial crisis, but this in large part reflected the decisions of past governments which left a stronger starting point for our economy and our budget,'' he said.

''Individuals must do more for themselves, they must become more self-reliant, and the business sector must shoulder more of the burden. It must restore corporate accountability, and rely less on government assistance. It must stand on its own feet, and it must pay its fair share of tax.''

With G20 finance ministers descending on Australia within a fortnight, Mr Hockey used the Lowy speech to lay out the task ahead of developed economies in the post-global financial crisis era, urging governments to never again allow themselves to reach such fiscal weakness that they cannot respond to shocks using accumulated reserves. ''Indeed, in looking at the experience of the crisis, nothing stands out more than the need to make sure Australia maintains its fiscal flexibility,'' he said.

''Many countries still face very difficult decisions because they have run out of fiscal and monetary policy options. We must never let ourselves get into that situation.''

Shadow treasurer Chris Bowen said the government had double standards. ''The Treasurer trotted out more platitudes on the 'age of entitlement' and yet he stubbornly remains committed to a new and unfair $5.5 billion a year paid parental leave welfare scheme - all the time flagging more cuts to hit Australian families,'' he said.

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