Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Hansard source

other sailing boats into a headwind, but it is there and it needs to be recognised. The IMF, just prior to recent meetings in Washington, downgraded their forecast for the global growth primarily on the back of some continuing uncertainty in Europe.

There are still strong signs of good, continuing growth in a number of jurisdictions. The United States, for example, has successfully dealt with issues relating to tampering—

Opposition members interjecting—

to tapering and tampering—of their currency. Ultimately, you can see the US economy starting to grow quite well. The Chinese economy's growth, at around 7.3 per cent, is still strong, certainly off a much bigger base than was previously the case when growth was higher. But the fact is China is the second biggest economy in the world, it is our biggest trading partner and growth will continue to be strong in China. Japan is continuing with it significant regulatory change. The fact that Japan at last is undertaking structural change should be a moment of comfort to a lot of legislators around the world. But ultimately, the challenge still remains with Europe. Countries that have undertaken structural reform in Europe such as Spain, Ireland, Germany and even Italy to some degree are the ones that are getting the benefit of that. Countries that have not undertaken structural change such as France have been left behind.

The fundamental challenge now for the global economy is when loose monetary policy has done its work and unfortunately made the rich richer through rising asset values but loose monetary policy has effectively been exhausted as a lever to stimulate economic growth on a global basis. Loose fiscal policy—that is, government spending hand over fist—is now limited because they do not have the money to be able to continue to do that and put it on the credit card forever. It means that the only option for the earning of growth into the future is structural reform. That means having a more competitive world with deregulated Labour markets, with barriers to increase protection put up by various countries and making sure that we undertake the domestic reforms in both our budget and the economy to build a stronger economy and ultimately deliver more jobs. That is the only way you can do it now.

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