Treasurer Joe Hockey's speech at the Lowy Institute today picked up on, and in some areas expanded upon, many of the issues raised in Prime Minister Abbott's G20 address in Davos.
As Mike Callaghan noted of the Prime Minister's comments in Davos, the Treasurer's speech bore the imprint of its deliverer, rather than of a team of officials. If Australia's presidency of the G20 is to actually achieve anything, such personal involvement is both necessary and positive. Nothing much will happen at the G20 without the personal drive of the Australian prime minister and treasurer.
So it was not surprising to see Hockey leveraging off his recent passion for the end of 'the age of of entitlement': 'Individuals must do more for themselves, they must become more self-reliant', he said today.
Such statements point to the determination of the Coalition government to frame the post-crisis economic malaise as the result of business being crowded out by high-spending, over-regulating and high-taxing governments, and that the solution is to put business at the centre of the recovery narrative.
But there was also a suggestion that the business sector had important responsibilities, including in the area of combating tax avoidance and evasion: [fold]
...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.
The Treasurer has clearly gained a stronger understanding of the internal workings of the G20 since his November 2013 comment that he had 'underestimated the size of the G20 leadership task'. Today, he emphasised the importance of building strong personal relationships with his G20 colleagues, noting that 'building trust and empathy is a key part of how the G20 actually works.'
In many respects, the speech was targeted to a domestic audience (as is the prerogative of political leaders), very few of whom are as obsessed with the G20 as your humble author. However, the question for G20 observers from around the world (not least the Treasurer's overseas counterparts) will be 'just what G20 issues will the treasurer (and prime minister) use these personal relationships built upon and trust and empathy to pursue?'
On the financial and economic policy front, we will likely be much clearer on Australia's priorities by the conclusion of the first finance ministers' and central bank governors' meeting on 23 February. But based on Hockey's speech today, the topics on the agenda will include:
- Deep structural micro-economic reforms.
- The tapering of quantitative easing by the US Federal Reserve, which is causing concerns for some emerging market economies.
- Investment promotion, particularly with regards to infrastructure.
- Pressuring the US Congress into passing the 2010 IMF reform package.
- Developing a tax framework 'fit for the 21st century'.
- Advancing the Financial Stability Board's financial regulatory reform agenda.
These are all noble objectives and we await the detail on how they will be progressed.
The final comment I would make is on a revelation that surfaced in the Q&A (podcast will be available on the Lowy Institute's website soon), when Mike Callaghan questioned whether the Treasurer would seek to emulate the Prime Minister’s Davos commitment to produce a leaders' communiqué of no more than three pages'. To which the Treasurer competitively responded: 'we’ll do better than that.' The Treasurer has thrown down the brevity gauntlet. Can he deliver at the first finance ministers' and central bank governors' meeting in a fortnight?
