Treasurer also says each country has a responsibility to undertake structural reform to create jobs

This article is more than 6 years old

This article is more than 6 years old

The G20 countries will agree on Sunday to meaningful global action to counter tax minimisation in the digital age, the Australian treasurer, Joe Hockey, has predicted.



Hockey, who is hosting the meeting of G20 finance ministers and central bank governors in Sydney, said delegates had also discussed the impact on emerging economies of the United States’ plan to reduce its bond-buying program, known as tapering.

Before the release of a communique in Sydney on Sunday afternoon, Hockey raised expectations of concrete steps to deal with the ability of multinational corporations to evade tax.

“There’ll be a further session this morning on taxation, the rapid changes brought on by globalisation and the digital economy; what it means for the global taxation system,” Hockey told reporters before the second day of meetings on Sunday.

“All member countries, I must say, are united on the need for global solutions in relation to taxation minimisation as a result of the digital age and there’ll be some meaningful outcomes out of that.”

Hockey did not expand on what kind of steps were likely to be endorsed.

Hockey, who has been pushing for ambitious global goals to boost economic growth, said the consequences of the US tapering program were discussed on Saturday.

“There was extensive discussion about the impact of tapering on emerging economies and it was an excellent discussion all around and we’ll have more to say about that in the communique after the meeting is finished,” he said.

Hockey said the new head of the US Federal Reserve, Janet Yellen, was a “very impressive person”. She appeared to be “exactly the right person at exactly the right time for the US Fed”.

“At a time when there are sensitivities associated with tapering I think her handling of it is superb,” Hockey said.

“There was extensive discussion about how we can improve co-operation, how we can improve communication and how we can help to build resilience and it was extremely informative.”

Hockey said the first session on Sunday would focus on increasing global economic growth and job creation and how to ensure countries could deliver any promises. He said there were “issues to be addressed” but he detected “a lot of goodwill”.

The treasurer did nothing to hose down talk of Australia agreeing to workplace relations changes – such as loosening unfair dismissal protections – as part of a global growth pact.

Fairfax Media reported on Sunday that a leaked draft outlined concrete actions for each nation to encourage private investment, lift employment and increase trade.

Analysis prepared by International Monetary Fund (IMF) staff urged Australia to cut the strictness of its employment protection legislation by 10% over five years, according to the Fairfax report. Other reported elements were a 10% cut in the degree of regulation in the services industries, a reduction in access to the pension and increased childcare spending.

Asked about Australia’s reform contribution, Hockey said: “I don’t think there’s a person in the room that doesn’t believe that if we want to create more jobs we’re going to have to undertake structural reform in our economies.

“I don’t think I’m giving away any confidences by saying that the finance minister of China pointed out that they had undertaken some structural reform last year in China and 13m jobs were created and I responded by saying, ‘well it’s taken us 200 years to create 13m jobs’ … If we want to have not just job creation but job security then we all have a responsibility to undertake structural reform.”

Hockey promised to say more after Sunday’s discussions but, pressed on whether commitments might include industrial relations changes, he said: “There are a range of areas that are covered.”

In the past few days, Hockey has sought to trigger public debate about the possibility of raising Australia’s retirement age.

The education minister, Christopher Pyne, told Sky News on Sunday the Australian people elected the Coalition government in September “to make the decisions that are necessary to reset the economy”, but any changes that contradicted election promises should be put to voters at a subsequent election.

The shadow treasurer, Chris Bowen, told the ABC the opposition was prepared to discuss the retirement age, but questioned whether Hockey had floated the idea in response to the first report from the commission of audit into government finances. Bowen called on Hockey to release the report rather than waiting until the May budget to confirm the government’s plans.

Hockey said Saturday night’s G20 working dinner focused on infrastructure investment and financing – one area the Australian government was keen to prioritise.

“A lot of us didn’t realise that we have quite common challenges in relation to infrastructure financing and construction and it was a very frank discussion,” he said.

Hockey said G20 representatives on Sunday would discuss reform of the IMF.

“We are very keen for the IMF to remain credible, effective and legitimate and there’ll be a detailed discussion about governance and quota reform and where we’re at on that,” he said.