Glenn Dyer and Bernard Keane|
Jun 23, 2014 12:52PM |EMAIL|PRINT
Joe Hockey’s lecturing the G20 on lifting growth while undertaking reforms. Only… it all sounds a little familiar, write Glenn Dyer and Bernard Keane.
Woe betide Australian leaders daring to tell the rest of the world what to do.
“Europe won’t be ‘lectured’ by Julia Gillard, EC chief Jose Manuel Barroso has said,” reported The Australian two years ago, about comments by then-PM Julia Gillard and then-treasurer Wayne Swan ahead of a G20 meeting about economic policy. Barroso had “slapped down” Gillard, The Daily Telegraph reported. Coalition MP Joe Hockey joined in, declaring it “embarrassing” that Gillard was “lecturing the world”.
Except, as Crikey reported at the time, Hockey, the Oz and The Tele had gotten their facts wrong. The Europeans were grumpy at Canada’s Stephen Harper, not Gillard. But none of those three were ever ones to let facts get in the way of some Gillard-bashing.
But scroll forward two years and you’d expect that if now-Treasurer Joe Hockey engaged in lecturing the world, some basic sense of consistency and fair reporting would result in him being savaged by News Corporation?
Hmmm. Not quite.
In an interview with the Financial Times this morning, our Joe was upset at the rest of the G20 economies and proceeded to threaten them with “naming and shaming”. Perhaps Joe will grow a Derryn Hinch-style beard for the moment when he intones “shame shame shame!” According to the FT:
“Australia is threatening to ‘name and shame’ G20 countries that fail to outline the structural reforms they plan to implement to meet a collective target of boosting global economic growth by an additional 2 per cent over five years … Canberra, which is chairing the G20 this year, is becoming frustrated at a lack of concrete policy measures proposed by some states to help meet the target.”
And this from Hockey: “Some people are just reheating the existing initiatives, and that is not acceptable … I don’t want to name and shame at the moment, but I will, coming up to Cairns.”
Hockey’s hypocrisy isn’t merely about Gillard two years ago, but about his own budget, which in the view of the Reserve Bank, goes deeper in curbing spending, and thus growth, than expected. In the minutes of its June meeting, the RBA board said:
“Members observed that the change in the budget position over the next couple of years was forecast to proceed at a similar rate to earlier episodes of fiscal consolidation. Beyond that horizon, the budget implied a more substantial fiscal consolidation than had earlier been projected.”
Remember that’s on top of what the RBA has been saying for an extended period about the weak contribution of public demand to growth at a time when the latter is tepid as well.
So who are the laggards incurring the Wrath of Joe? New Zealand has pushed up interest rates three times this year, and the UK has now surprised by talking about its first rate rise sooner than later. The European Central Bank is doing its best to try to halt the slide towards deflation. Germany’s economy is growing solidly. China is still growing, Japan has been stimulating madly for 18 months to try to escape the clutches of deflation and remain there. The United States economy was whacked by the winter freeze in the first quarter but is now growing at 3% plus, according to US estimates. Last week US Federal Reserve chair Janet Yellen made it clear the central bank would be running an easy, low interest rate policy for longer than expected.
Indeed, the global economy seems to be better placed than it was when Hockey visited Washington last October and returned claiming the sky was about to fall and, in an act that seems more and more bizarre in retrospect, threw an unasked-for $8.8 billion at the Reserve Bank.
“We must ensure that everyone pays their fair way and any country that disrupts that activity needs to pay a heavy price,” said Hockey in the FT. That’s rich coming from the author of a budget that even some of the government’s cheerleaders have condemned as unfair. And very rich coming from a government that is looking to dismantle a highly effective carbon pricing regime so that Australia can go back to being a free rider on bigger countries’ carbon abatement efforts.
And the funny thing is, what did Gillard and Swan say two years ago that prompted accusation they were “lecturing the world”? They echoed remarks made by the International Monetary Fund and South Korea, that Europe should look to undertake structural economic and financial services reforms while preserving short-term growth:
“These reforms include opening up competition in services and key product markets, encouraging flexible labour markets, and tax reforms and entitlement reforms that enhance productivity and improve incentives to work. Ultimately, structural reforms will have the most significant positive impact on lifting global growth and creating more employment opportunities.”