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Treasurer Hockey aims for 3% growth rate to slash unemployment

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Industrial relations reform on G20 agenda

Taxation, the digital economy and the need for structural reforms to create more jobs will be on the discussion table at the G20, announces Treasurer Joe Hockey.

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Treasurer Joe Hockey has committed Australia to an economic growth rate of 3 per cent, well above the official forecast of 2.5 per cent, and foreshadowed sweeping reforms in the budget aimed at cutting unemployment.

The commitment comes at the end of a two-day summit of the world's most important treasurers and central bank officials including the US Federal Reserve head Janet Yellen, International Monetary Fund managing director Christine Lagarde and leaders from China, Japan and India.

Happy: Joe Hockey, centre front, with delegates.

Happy: Joe Hockey, centre front, with delegates. Photo: Dominic Lorrimer

The G20 communique commits the leaders to develop policies that aim to lift their nations' combined gross domestic product by more than 2 per cent over five years. The boost would add more than $2 trillion to the world economy.

But the language of the communique is weaker than expected and India's Finance Minister, P. Chidambaram, said he did not consider the growth aim binding.

"I don't think it intends to bind countries; it is a goal," he said.

"In fact it's not so ambitious as the language appears to say … cumulatively over a period of five years we will have an additional

2 per cent growth, that works out at roughly 0.4 per cent a year additional growth.''

The summit produced a breakthrough on international tax avoidance. All nations agreed to adopt a common reporting standard for the automatic exchange of tax information and to detail their plans for implementing it by September.

During the tax session of the summit Mr Hockey told international finance ministers he was at a loss to know what to say to a small-business person in Sydney who is competing against ''a massive multinational that doesn't have to pay tax and yet they have to pay tax''.

''We are mindful of this and we are absolutely determined to get real action on it,'' Mr Hockey told the closing press conference. He defended the language used about the aim for higher growth, saying the important thing was that finance ministers and central bank governors had ''decided to put a number on'' an increase in growth.

''Each country needs to shape its own plan. We do not have central planning for individual economies,'' he said.

The plans would be reported back to the G20 leaders summit in Brisbane in November. They would have to go beyond supportive interest rates.

''We have to earn economic growth,'' Mr Hockey said. ''For some countries it will be labour market reforms and some competition policy, for others it may be tax reform. For all of us it seems to be private investment in infrastructure.'' Australia's reforms would aim to lift economic growth back above 3 per cent.

''The only way we can stop the rise in unemployment in Australia and in fact start reducing unemployment is to have growth that is faster than 3 per cent. Currently we are at around 2.5 per cent. We have got to look at ways to speed up our economy.''

Ms Lagarde said the aim to lift global growth agreed to by G20 members was attainable.

''Measures to support investment, boost trade and promote competition will be essential for more sustainable and robust growth,'' she said.

An IMF staff paper presented to the summit suggested that Australia cut its employment protection legislation by 10 per cent and axe regulations holding back service industries.

Mr Hockey promised that his actions would be ''entirely consistent'' with the Coalition's election promises.

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107 comments

  • Good luck with that Joe, let me make a wild guess here and say that you'll get nowhere near it. Just like all of your other fiddling with figures and promises made that you knew you could never keep.

    Commenter
    JoBlo
    Location
    Here
    Date and time
    February 24, 2014, 7:12AM
    • Quite right JoBlo, talk is cheap. This is the trouble with having two oppositions, one on the treasury benches and the other sitting opposite them.

      Commenter
      Hatchet
      Date and time
      February 24, 2014, 7:41AM
    • With the real unemployment rate at 18.1 percent I don't think jolly joe has a chance at this. And that rate includes all those that work just a couple of hours a week, those that want work but can't be registered, those underemployed that still receive assistance, and those able bodied that refuse to work. There're still parts of this country with youth unemployment near 30 percent and others that are higher than that and they've been like this for almost 20 years now.

      Commenter
      John Michaels
      Date and time
      February 24, 2014, 7:42AM
    • And remember, he'll blame Labor. That's all the LNP know what to do when things don't work out for them: blame Labor. All the time, every time. And the idiots out there will lap it up.

      Commenter
      Jace
      Date and time
      February 24, 2014, 7:42AM
    • JoBlo I think Swan was the better one at cooking the books.

      Commenter
      MrDeficit
      Date and time
      February 24, 2014, 7:56AM
    • Joe, the age of entitlement is over, you are not entitled to make such suggestions and predictions.

      Commenter
      emtee
      Date and time
      February 24, 2014, 7:57AM
    • YES! Good luck Joe. Better to have some hope than none at all. Someone has to get the countries finances back on track after Rudd/Gillard/Rudds disastrous 6 year spending spree.

      Commenter
      Muphin
      Location
      Tewantin
      Date and time
      February 24, 2014, 8:02AM
    • Sarcasm on. Good on you @JoBlo, showing all the support and commnitment to help get the country back on its feet. Sarcasm off.

      Commenter
      The Other Guy
      Location
      Geelong
      Date and time
      February 24, 2014, 8:09AM
    • One thing the government must do is agree to step up its fight against multinational tax evasion and financial irregularities which led to the ongoing GFC . That has done the most to damage western economies over the last few years

      Commenter
      Good Logic
      Date and time
      February 24, 2014, 8:22AM
    • Whats really funny is you folks think he is talking about the Unemployment Rate when he is talking about the National Economic Growth Rate. They are not the same thing!!

      Commenter
      BigTedd
      Location
      Brisbane
      Date and time
      February 24, 2014, 8:46AM

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