 Treasurer Joe Hockey, Chairman of the Loewy Institute, Frank Loewy, Barry Sterland, Australia's G20 Finance Deputy, Corporate and Government Members, Distinguished Guests, ladies and gentlemen. I'm Michael Fully Love, Executive Director of the Loewy Institute and it's my great pleasure to welcome you all to this important speech by the Treasurer. It's great to have Joe Hockey back at Bly Street. This afternoon's speech is being broadcast live on ABC News 24 and Sky and those in the room and at watching at home are encouraged to join the conversation on Twitter using the at Loewy Institute Twitter handle. Ladies and gentlemen, sometimes people think that international policy is only about diplomacy and they think that international policy institutes like the Loewy Institute are therefore all about diplomacy. But of course the single biggest contributor to a nation's power, influence and indeed its clout in the world, is the strength of its economy. Its economic strength that makes other countries want to emulate us. Its economic strength that lends our leaders prestige when they travel abroad. It is economic strength that enables us to afford the diplomatic network and the military hardware that we need in our rapidly changing region. And its economic strength that makes us an attractive destination for the immigrants we need to increase our productivity and our entrepreneurialism. So for that reason alone we would be delighted to host the Treasurer, Mr Hockey, at the Institute. But there's another reason we're pleased to do so today. In the last few years with the support of the Australian government the Loewy Institute has been deeply engaged in the study of international economic institutions and in particular the G20. Under the guidance of Mike Callaghan the Institute's G20 study centre is delivering analytical support toward the building of stronger and more effective G20 and toward improving international economic governance in general. And I'll ask Mike who was himself chief of staff of course to one of your predecessors Joe to come up after your speech and conduct the Q&A. Ladies and gentlemen the G20 is the premier forum for international economic cooperation and as chair in 2014 Australia has the opportunity to influence the global economic agenda. I've said on many occasions that the G20 is profoundly important to us. It allows us to further our national interests not at the expense of other members or non-members but by contributing to the global welfare by contributing to the design of the rules of the international economic game and by advocating an open transparent rules-based international economic order that safeguards our economy. Towards the end of this month the treasurer will chair a meeting of G20 finance ministers and central bank governors here in Sydney and this will be the first G20 ministerial meeting under Australia's presidency. This is a big moment for Australia. Our G20 presidency can coincides with our membership of the UN Security Council. For many years Australians have been saying we'd like to a seat at the big table. Now we have a seat at the two biggest tables and for this year we have a seat at the head of the G20 table. So this year will test Australia, it will test our officials and our government and in that context we are very glad indeed to have a reformist treasurer address us today someone who I know is very committed to the success of the G20. A North Sydney native Joe was elected to the House of Representatives in 1996 when he was appointed as Minister for Financial Services and Regulation in 1998 he became one of the youngest ministers in the history of the Commonwealth. He served in various ministerial portfolios until 2007. In opposition he served initially as shadow minister for health and aging before moving to finance and then the shadow treasurer portfolio. There's one important thing that is sometimes left out of Joe's official biographies and in pointing to this let me depart Mr Chairman momentarily from the principle that the only code of football that can ever be mentioned in this building is soccer because Joe Hockey is a fan of the much mourned North Sydney Bears and like me he is a dedicated opponent of the Manly Sea Eagles. So ladies and gentlemen for this reason and for all the other reasons I'm delighted to welcome Joe Hockey to the Institute. Thank you very much Michael and given that the Prime Minister is the representative of the Manly Sea Eagles we have a testy relationship only when it comes to rugby league but I want to thank you and I want to note all the very distinguished people in the audience here today. This is my first address to the Lowey Institute and I'd like to begin by thanking Frank Lowey and his family for their general and generous support of this increasingly influential institution. I've long admired Frank Lowey, his story, his enterprise, his philanthropy and his love of Australia represent the very best of our nation and now through the Lowey Institute Frank is facilitating a reach out to global affairs that a maturing middle power nation should embrace. 2014 will be a significant year for our country on the international stage. It began at the World Economic Forum in Davos where the Prime Minister gave a defining speech that has been lauded across the globe as a new and promising pathway for the G20. Tony Abbott's speech embodied the traditional liberal and conservative values that have served the world economy best over the last 50 years. It was a speech that reaffirmed that freedom and small government rather than more regulation and higher taxes will serve us best for the next 50 years and beyond. During the course of this year as President of the G20 Australia will welcome the world. It will culminate in November when over 4,000 international delegates and 3,000 international media will meet in Brisbane for the leaders summit. This is a year that Australia will lead and influence the world's collective decision-making on how to get the global economy growing, how to make it resilient to future shocks and how to continue to build sustainable prosperity for all the citizens of the world. In just two weeks our leadership kicks off in earnest when we welcome the G20 finance ministers and central bank governors to my hometown of Sydney. Many of the countries in the G20 have been through very tough times over the past five or six years. We are still grappling with how to restore economic growth, create jobs and strengthen financial systems whilst at the same time repairing our budgets. Australia had the good fortune to be relatively unscathed by the global financial crisis but this is in large part reflected in decisions of past governments which left a stronger starting point for our economy and our budget. While we emerged from the immediate crisis in better shape than many of our developed world peers, Australia now finds itself with a budget that is in significantly worse shape than before the crisis. Indeed in looking at the experience of the crisis nothing stands out more than the need to make sure Australia maintains its fiscal flexibility. Many countries still face very difficult decisions because they have run out of fiscal and monetary policy options. We must never let ourselves get into that situation. The G20 meetings over the next 12 months must be a reminder to all Australians that unless we prepare for the worst of economic times when we can then the pain during recovery will always be far greater. That is why the added government is determined to repair our budget. The messages we have for Australia and for the global economy are one and the same. Governments have run out of money and it's now the turn of the private sector to generate economic growth and create new jobs. Governments must facilitate and not inhibit that task. We all have an obligation to begin by fixing our budgets. This will inevitably require tough decisions now so we don't have to face near impossible decisions later. We will discuss the common challenge the G20 of pursuing economic growth whilst maintaining a steady course of fiscal repair. It's a difficult balancing act there's no doubt about that but fiscal repair is made easier if there is global acceptance that there are limits to what governments can do. Individuals must do more for themselves they must become more self-reliant and 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. I've said before that the age of entitlement is over. The age of personal and corporate responsibility has now begun. The G20 was established in late 1999 and my predecessor Peter Costello was instrumented in its original formation. Most observers agree that the G20 emerged as a stronger and more powerful entity during the darkest days of the global financial crisis. It was a moment that demanded urgent global action and global leadership. It was a moment that demanded exceptional measures to stabilise financial markets and support a global economy in free fall. The G20 stood up to the challenge and effectively managed the immediate aftermath of the crisis. But with a crisis more than half a decade behind us now the world is by no means sailing in calm waters. The recovery has been painfully slow and the picture in many countries is still one of large output gaps sluggish or negative growth and high unemployment or underemployment. The world needs to rebuild economic and fiscal resilience. It urgently needs to find ways to spur growth and create jobs and restore fiscal balance sheets. Faced with this reality we must continue with international consultation and coordinated action to put the global economy on the path of sustainable recovery. And it's important even outside of crisis because in a globalised world every policy action taken in isolation has a spillover. So a global steering body is required in the best and worst of times to deal with both challenges and opportunities. What the crisis brought into sharp relief was that the G7 or the G8 model no longer reflected the world we live in. Not only were economies around the world both developed and emerging more connected than ever before but the balance of economic power has shifted. The G20 is definitely the right body to take the wheel. Why? Because 20 members of the G20 members they account for 85% of the global economy, 80% of trade, and about two-thirds of foreign direct investment. Decisions by G20 leaders affect how we trade, invest and relate to each other across the globe. The G20 has both advanced and emerging economies in its membership including those emerging Asia-Pacific markets with whom Australia has particularly close and valued friendships. And G20 leaders are supported by a group of finance ministers and central bank governors in charge of countries macroeconomic policies. The heads of all these key international organisations such as the IMF, the World Bank and the OECD attend the five scheduled G20 finance ministers meetings each year starting in the next couple of weeks here in Sydney. This brings all the key economic decision makers and advisors together in one room regularly to assess developments and progress reform. Yet despite its economic strength the G20 remains small and agile enough to address difficult issues that larger global groupings cannot. So how does the G20 fulfil that great promise of leadership? How does it work in practice? Well within a few days of taking office I was on a plane for meetings in Washington and New York with the G20, the IMF and other key partners. I saw in those meetings the importance of the personal relationships between finance ministers and central bank governors. Building trust and empathy is a key part of how the G20 actually works. Those relationships of course were critical in getting a rapid nimble and coordinated response to the GFC. They remain critical now as we confront the task of rebuilding economic and fiscal resilience in the years ahead. The opportunity to make colleagues around formal meetings is an important way to nurture those relationships. It is those relationships that bear fruit when it's time for intense negotiations, key decisions and rapid action. The G20 is still relatively young as an institution so these relationships and habits of cooperation are still being built continuing to build this environment of trust and effectiveness is a key priority of our presidency. As chair Australia must play to its strengths historically we've been remote from the centres of power due to our distance from the North Atlantic hubs of political and economic might but now we are in middle power with a successful polity and a sophisticated economy. We're actually in our 23rd year of uninterrupted growth something of a rarity by global comparison and we find ourselves not at the outskirts of economic dominance but at its heart in a new age powered by remarkable Asian growth. In the policy world Australia is well known as an honest broker, a straight talker and we don't have any barrows to push. We have a strong record of economic and fiscal reform so when we advocate reform to our peers we are sharing our own experience and aspirations we won't be advocating something we wouldn't be prepared to do ourselves. I mentioned before how important relationships are I'd like to think that Australia has natural strengths in building good bridges with countries of varied backgrounds. We bring our unique cultural character to this leadership role we also bring an agenda that uncharacteristically or characteristically I should say is focused and practical. Anyone who's followed the G20's fortunes over the past few years will recognise that these are exactly the qualities needed to revitalise and refocus the G20 to strengthen the mechanisms of international cooperation at a critical time. Our agenda reflects our pragmatic approach it's simple, uncluttered and focused. We're not adding anything to the existing agenda but rather we're focusing, focusing on strategic priorities. Do less, focus more on it and get an outcome. That's what it's got to be and as the Prime Minister outlined in Davos last month the G20 in Australia must not be a talkfest it must be a place for decisions and actions. We will be good stewards of this institution and we will ensure that the work of the G20 has a truly global focus. We want it to remain a powerful, powerful institution for our time. So it's important that we focus on the top priorities. In the finance track Australia will focus on two key themes. Firstly we'll promote stronger economic growth and better employment outcomes and secondly we'll help to make the global economy more resilient, be able to deal with future shocks. The G20 is an important juncture. It must show it's able to act decisively to implement policy reforms outside of a global crisis. Complacency is our enemy. We must resist any temptation to reduce our microeconomic reform efforts at the first sign of growth and recovery. That applies as much to the rest of the world as it does to Australia but this is a difficult task. There is reform fatigue in many G20 countries from six years of challenging economic circumstances. Many governments are at or close to the limits of macroeconomic policy responses. That's why our focus will be on improving the environment for private sector investment and growth. This means policies to enhance competition and trade, to sharpen price signals for investment, to build a sense of personal corporate responsibility and to ensure governments provide a predictable no surprises policy framework. Of course current topical issues will be discussed. We will not ignore recent instability in international financial markets and in particular the impact on emerging market economies. Our discussions will be based on the fact that fundamentals across most emerging economies are in better shape than they were prior to the global financial crisis. Countries like Mexico have undertaken significant reforms over the last decade. Mexico has improved its capacity to cope with global volatility by undertaking domestic microeconomic reform. Its currency can now trade across a wider range without creating significant domestic dislocation. South Korea and Malaysia have similarly undertaken significant domestic economic reforms. Other nations such as India and Indonesia have progressed very difficult reforms in challenging political environments. In particular Indonesia's reduction in fuel subsidies has sent a positive message about the determination of the government to make difficult decisions that ultimately strengthen the local economy. Generally sovereign debt levels in emerging economies are reasonable. Financial systems well based and foreign reserves in the main in the main are providing a reasonable buffer. While normalization of policies and advanced economies is a contributing factor to the volatility in capital flows it appears that much of the market volatility is related to specific issues in some emerging economies. We will need to foster a constructive discussion at the G20 in Sydney so we understand each other's policy constraints and intentions. We must ensure the domestic policy is based on the best information available at a global level. We also need to develop a common view that primary response to volatile financial markets should be for all G20 countries to continue to strengthen domestic economic and financial policy frameworks. At the same time we need to cooperate to manage spillovers between countries. The second big issue on the upcoming agenda is how the G20 can cooperate to get the conditions right to strengthen growth. As I indicated before the best way to promote stronger economic growth is by unlocking private sector-led growth through more investment and free trade. Whilst leaders will deal with the issue of trade the investment agenda is a key focus of the finance track here in Sydney. Weak investment is a key contributor to below part growth in many economies. Stronger demand including from investment could assist the process of normalizing the currently accommodative monetary policy and advanced economies with benefits for medium-term financial stability and in both developed and emerging markets stronger investment would boost productivity, job creation and economic development. Government budget deficits and high debt mean that the public sector cannot be relied upon nor should it be to deliver greater investment. So now's the time for the cashed up private sector to do some of the heavy lifting. The centerpiece of that agenda will be commitments from members to undertake domestic reforms that tangibly improve the investment environment and so unlock private sector investment particular in the areas of infrastructure. These initiatives will be a key part of the comprehensive growth strategies that leaders are committed to producing by the Brisbane summit. From our perspective Australia will lead through our comprehensive plan for boosting economic prosperity built around a strong infrastructure package to boost growth and lift productivity restoring the government's fiscal position and revitalizing Australia's structural reform agenda. It is clear any discussion of growth and resilience will need to involve a sound approach to fiscal policy. Now this has been squarely on the G20 agenda for some years and we'll progress it further this year. As recovery takes hold in advanced economies now will be the time to refocus on rebuilding fiscal flexibility across the G20 with measures that improve the long-term structure of budgets. Again Australia will lead by example as I noted earlier Australia's relative resilience through the GFC reflected our disciplined fiscal policy and track record of economic reforms during the 1980s the 1990s and the early part of the 2000s. However a legacy of the global financial crisis and the previous government spending policies is that Australia's fiscal buffers have been significantly eroded. The structural position of our budget in Australia is unsustainable. We now find we are not able to finance projected growth in government spending from our existing tax banks. This means that in the absence of significant fiscal adjustment public debt will continue to grow and the government's flexibility to respond to future economic shocks will continue to erode. To a large extent the budget that we inherited from the previous government reflects the entitlement mentality that has dominated government decision making over recent years. Too many taxpayers' dollars have been spent on corporate and middle class welfare and too often previous governments have been drawn into areas that are better left to the private sector. Not only are these policies an unsustainable use of taxpayers' funds they also undermine economic incentives they undermine our productivity and ultimately it undermines our national prosperity. We must restore our own fiscal position to a sustainable long-term path. This will be the key focus of the budget in May when we will be announcing changes necessary to help meet our commitment of achieving budget surpluses that build to at least 1% of GDP by 2023-24. The budget will also be set against the broader challenge of sustaining growth and national prosperity. With Australia's terms of trade and decline baby boomers now reaching retirement sustaining strong growth in living standards over the next decade will require a significant improvement in our productivity growth performance. Again this will not be achieved by more government handouts. We need to invest in economic infrastructure remove regulatory impediments and create an environment where workers and firms have strong incentives to increase the productivity of individual workplaces. This is the broad framing that sits behind the government's structural reform agenda. Through our infrastructure initiatives the competition review the financial system inquiry the upcoming review of the fair work laws our deregulation agenda which is well underway and the commission of order we have a comprehensive agenda to improve the structural the structural underpinnings of the Australian economy. Combined with our fiscal adjustments this means we'll be leading from the front when it comes to the G20's comprehensive growth strategies. Building resilience in the global economy more broadly will require progress over a range of areas. These include reform of international institutions particularly the IMF implementation the financial regulation agenda and the harmonisation of international tax rules and this is an ambitious agenda but it's a simple agenda that has deliverables. It will be challenging to deliver but we can. Reform of the IMF has been central to the G20 agenda since its inception but recently it suffered a major setback when the United States as part of its budget deal failed to ratify reforms to the G20 that were agreed by the G20 in 2010. For 70 years the IMF has been the cornerstone institution in the international monetary system and the linchpin of the global financial safety net. The world has been a far better place because of its role as a key international institution. However for it to remain a central global institution the IMF must be adequately resourced which it is and have governance arrangements that reflect its global membership which currently it doesn't. In 2010 the G20 and the IMF agreed to a far reaching package of reforms that would lead to the doubling of the IMF's permanent resources and a major realignment of voting shares to better reflect the changing relative weights of countries and the global economy. Today ratification by the US Congress remains the final step to those reforms and those reforms are critical to the IMF's ongoing legitimacy and effectiveness. Failure to reform means that we risk a shift away from the IMF in the multilateral system towards bilateral or regional approaches and an international financial architecture that may be fragmented and misaligned. Ultimately what is most risk over the longer term is the stability of the international monetary system itself. Given the cost of instability it's of paramount importance to the G20 that we modernize the IMF. That's why together with the Deputy Prime Minister of Singapore the chairman of the IMF see I wrote an article in the Wall Street Journal calling on the US Congress to show leadership and urgently ratify the 2010 governance reforms. To secure global economic stability into the future the United States must support the IMF reforms now. As a long-standing friend of the United States we can can say emphatically that this reform is very much in the interest of the United States as well as that of its friends. I believe we have a small window to achieve that reform. It will be a high priority for me with the cooperation of the rest of the G20 to prevent this reform process from grinding to a standstill. Australia is seeking to leave a lasting legacy in the way the G20 operates. We'll pursue a goal that focuses on tangible outcomes improving communication about the G20 and we'll have meaningful engagement with business and other stakeholders and we'll reach out to non-G20 members. We will achieve outcomes during our presidency and we'll also be set to keep achieving outcomes once we pass the presidency to Turkey in 2015. To put it simply we want the G20 to be stronger. In the end our presidency will be judged by just a few things. Under our leadership we should have practical actions in place to lift growth and create jobs. We should aim to shift the dial on world growth. The G20 should agree to a more sustainable approach to fiscal policy that makes our economy globally more resilient. We should have a financial system that is safer which also supports and facilitates growth and we should have a fair and effective international tax framework for the 21st century. Also as leader we should set an example of job creation in our own context. We should set an example of growth led by business. Under our leadership ministers, governors and leaders should find the meetings productive and come away believing that the G20 was worth investing in. We should be remembered not only for helping the G20 deliver its objectives but for making substantial and lasting improvements to the G20 as a form. These are the benchmarks I have in mind as we approach the year ahead and as I approach the meetings with the finance ministers and the central bank governors. So ladies and gentlemen the challenges and the opportunities of our age are intrinsically global in nature. They require global responses. In our world a great deal of prosperity opportunity and equality hinges on how well the international community works together for the greatest good. Cooperation is fundamental to free trade and free commerce which in turn are the foundations of wealth. Cooperation is fundamental in alleviating poverty, in growing the global middle class, in resolving international conflict and in responding to disaster. In 2014 Australia has the opportunity to show the world just how effective such cooperation can be and make it even stronger. And I have every confidence that our leadership and example this year will inscribe a rich chapter in the history of the G20. Thank you very much. Well Treasurer thank you very much indeed. Ladies and gentlemen I'm Mike Callahan as Michael said from the G20 study centre at the Lowey Institute and it was terrific to have a speech Treasurer on the things that me and my colleagues spent a lot of our times working on thinking about and writing about so it's terrific to have you giving such a speech like that. The Treasurer is very kindly going to take some questions. It will be a raving, Mike will be going around and please if we could follow the normal protocol of please just introduce yourself and give you a affiliation. That would be terrific if you have one. If you have one or make it up if you have. The question will be open for the floor but I'm going to take the advantage of being here and being the moderator to open the bowling if that's okay Treasurer. You mentioned about the volatility that's taking place in some of the emerging markets and there have been some comments from G20 central bank governors and finance ministers saying there's been a breakdown of international economic cooperation. Now you mentioned at the end very much and through your speech that cooperation is very important but I just wonder is there a danger to expect too much when we talk about international economic cooperation. Is there a danger to expect too much from forums international forums like the G20? They are very important they're fundamental but ultimately I think as was coming through your speech the fortunes of countries are very much in their own hands their own domestic policy settings and I wonder in terms of this refocusing you've got of the G20 have you got a bit of a challenge of having to manage some expectations particularly your colleagues about what can be achieved and what can't be achieved. Yes, yes. Look I think what emerged during the global financial crisis was an expectation that governments had to fix all the problems. Even some national leaders thought that government had to become the centre of all economic activity from that day onwards that Lehman collapsed and that was just wrong. Government has a role to facilitate it should encourage but ultimately the growth of an economy the creation of jobs comes from the private sector and whether it be Australia or an emerging nation or any of the G8 the bottom line is our role is to be a facilitator rather than to expect that we're going to be the creator and I think Tony Abbott's speech was hugely important at Davos and the feedback from not only corporate leaders but other governments has been remarkable because the world is looking for a philosophical direction there are a number of governments that are fatigued there are a number of governments that have significant domestic pressures there's a number of governments that are facing elections this year I mean India and Indonesia in particular are facing elections at a time when they are also feeling some of the pressures of some of the volatility in global markets now the difference today is that a lot of issues that are contributing to volatility at the moment are linked to domestic events could be political instability could be the failure in some places to have microeconomic reform there is not a systemic problem in the global economy and it is somewhat unfair to sheet it home to the US Fed's tapering to suggest that the volatility in global markets at the moment is linked to it because the US Fed has a responsibility to do what is best for the United States as I'd expect the Reserve Bank in Australia to do what's best for Australia and what we've got to do is have the domestic reforms that make us more resilient in what is going to be a very lengthy period of unwinding of some of the measures that needed to be taken during the GFC please up the bank Joe, Mark Patterson, public servant, one of the heartening things in your speech and I agreed with everything that you said Treasurer but one of the heartening things oh we've had our moments the heartening thing for me was that there was no mention of the word stimulus of the word stimulus yeah much of the fiscal position that you inherited is a product of urging both from within the public sector and from outside that the role of government was to stimulate how will you resist those clamors both from within the public sector and from outside well the starting point is there's no money that's you know I mean when you know there is just not the funding available uh having said that what we do have we can reprioritize uh to facilitate greater investment in productive infrastructure as an example uh and governments need to focus on recycling their precious capital from existing assets that the private sector would dearly love to own and invest in to assets that will help to drive economic growth uh and importantly may require an early commitment from government with a later overarching commitment from the private sector you get what i'm going here absolutely i agree i'll have it i mean it's uh you know some people call it privatization as it's been called for years the bottom line now is we need to recycle precious taxpayers money from existing assets of the private sector wants to own that your superannuation is desperate to own all right we've got to give your superannuation funds the opportunity to own Australian infrastructure that has served the public sector and the economy will give them a chance to do that and at the same time the government can take precious taxpayer capital out of those assets and put it into new assets that are going to drive the new economy thanks thank you uh Robin Fitzsimons um thank you for that lovely speech um the United States as I understand it regards one of their major assets is the culture of innovation and the result of that is a large amount of intellectual property in the United States if you take medical um innovations for instance in Australia uh the IP from our innovation goes to places like the United States because as I am informed we don't have the capital available to develop to full development in a very risky business is there any way that our government can facilitate this kind of innovation as a form of infrastructure in order that Australia is going to be able to pay for the new biologicles which is going to be a huge drain on the budget we already have a situation where Australia is not the pbs is not paying for very significant life saving and enhancing drugs available elsewhere in the west well there's a few issues there but uh there is a starting point that I think that uh uh and we Tony Abbott and I said it before the election that we were concerned about the current taxation arrangements for employee share schemes particularly for startup investments Malcolm Turnbull as communications minister has said a fair bit about this and uh as has send uh Arthur send Dennis the assistant treasurer and that is something we are looking at very carefully uh we don't want to be uncompetitive in relation to uh new investment particularly for startups so as part of our role as a facilitator not as someone that picks winners uh or loses but as a facilitator uh I think it is important that uh we we do what we can to remove obstacles but I want to emphasize governments are very bad at picking winners losers are very good at picking governments governments are very bad at picking winners great and that's not a reflection on the voters of Australia who just picked their government by the way so treasurer a good speech thank you uh I was just wondering do you want to comment about what you think the role of financial stability board will be particularly any view on terms of them helping perhaps facilitate economic growth as I think a role to play so uh well it is hugely important Greg and I recognize your you know incredibly hard work as chair of iosco uh and uh as head of ASIC I know it's it's great for Australia that you have that role um look the FSB has a vast number of regulation priorities at the moment and having a vast number of priorities means you have no priority uh so uh in discussions with Mark Carney um who is the chair of the FSB and is now the head of the Bank of England uh I and we've been at you know discussing this at length um we we want to narrow it down narrow the focus down to what is deliverable towards the end of this year now uh I have focused on four key priorities that I really want to see nailed down by the end of the year uh particularly involving over the counter derivatives shadow banking Basel 3 and and and you know the and too big to fail you know they're the four four significant priorities in my view uh that the FSB is going to feed up to us as finance ministers and I think we've just got a nailed criteria I mean you know look the more the more regulatory constraints you put on the movement of money the more the money is going to go looking for unregulated investment right I don't see that as a bad thing because it's a handbrake on regulation in a sense but uh when you see crowdfunding and a range of other things emerge it is because the normal channels for investment are being uh you know hamstrung by overzealous regulation now I know that's pretty unpopular I've been warned by various government officials that there are some countries that won't like to hear that but it's got to be said it's got to be said I mean the natural reaction in the GFC was when governments have look governments have so many levers they've got money taxpayers money they can spend their way out of a problem they can tax their way out of a problem uh or they can regulate their way out of a problem and what happened during the GFC was there was no money to spend all right they couldn't squeeze the tax bubble any further without a busting so they went for the regulation lever and they sought to impose more and more regulation more and more regulation on business on the movement of money inside now there is a strong case to have reasonable levels of regulation that reassure investors that there is a framework a governance framework I totally accept that but when it becomes so punitive that it in fact inhibits liquidity and global markets and it inhibits the flow of capital into a new investment we all pay the ultimate price and at the moment the private sector is where the money is at the private sector is cashed up right around the world governments are not therefore we need to facilitate that private sector investment my name is Marie Nutt from Results Australia Minister thank you very much for a really passionate speech it was really enjoyable to to listen to and I really appreciate the absolute 110 commitment you have to the G20 being a really positive event I wanted to turn to the question of the development agenda at the G20 and there are various important priorities within the development agenda such as financial inclusion remittances building the education and training for for employment as well as building health and resilience of lower class citizens within emerging economies so I wanted to ask you what your priorities were within the development agenda given that you want to focus on getting outcomes and what those outcomes might be that you're going for yeah it's a very good question but I only have one day and you know the development agenda I mean what has stunned me is this massive infrastructure that kicks in around the whole G20 I mean there's groups that are meeting on the G20 that I never knew existed and people and there are meetings being held that I never knew were held and I'm still quite astounded at the breadth of of its activity but I'm not going to say to you that I can be there for all of it nor that it will be my priority because you can't narrow down the focus to four or five key issues and try and drive those key issues to an outcome when there are a number of disparate voices around the table if you are broadening the agenda to cover a whole range of other issues now there may be some countries that want to raise some of the developmental issues there will be others that will want to raise environmental issues there will be others that will want to raise participation issues and so on I'm not saying they're not important but I'm not going to be losing focus on what we can deliver with what we'd hope to deliver if there were a thousand days in the G20. Okay up the back please. Thank you Treasurer Adam Crichton from the Australian just a double barrel question firstly how can you make the case for individual responsibility to your colleagues and also the Australian voters when your government has the most generous paid parental leave scheme in the pipeline and secondly well the second point is I congratulate you for promising to implement the great majority of the recommendations of the Audit Commission earlier this week but is that was that a wise move though given what your government is perceived to have promised. Well look I haven't read the report from the Commission of Audit I said I would hope that we would be able to implement it but you know it's one of those things where you don't know what's coming out of the report when you set it up but you choose good people to make the assessments provide them with a team and let them go about doing their job. So please don't over interpret what I said on the Audition of the Commission of Audit but they know what the challenge is and I expect they're rather fearless in providing advice on that. In relation to paid parental leave scheme we need to improve increase the workforce participation of women yeah we have to do that and as I said here's Frank Lowry Frank started in a delicatessen right and came out in what year did he come to Australia Frank? 52 my father came out in 1948 from the Middle East right he started the delicatessen that's how he started and they at various times employed women in delicatessen then in the real estate business that he set up and the women kept leaving to go to bigger firms when they wanted to have children he couldn't afford paid parental leave but other bigger firms could or the public sector could but he couldn't afford it so the way we've designed our paid parental leave scheme is for the first time small business is on a level playing field with a public sector with a public service and with large businesses who can afford to pay and now with this massive growth in small business in Australia how fantastic it is how empowering it is to have that growth we want to do everything we can to help them to compete on a level playing field in a level playing field with many others and paid parental leave does that and they don't have to pick up the burden of paying the bills but they have the very same employment opportunities as much larger businesses in the public sector some people say that's generous I don't I don't I still see small business as the engineering you know every large business started as a small business and in this world small business has more opportunities than ever before so let's not hold them back and one of the most significant benefits of the paid parental leave scheme is it's it's equal and the second key thing is we need it's not a case of wanting more women to participate in work we need more women to participate in work we need it for our economy and we've got to do everything we can to facilitate that participation and lord it's not easy I know it's hard raising children in particular I beg to go back to work after the Christmas holidays you know I don't know how mums do it but I know that if we can strengthen the economy and give them the opportunity and not to leave their skills in the workplace and then we've got to find the balance and you know what I can say all the young women in the room nodding their heads one last question please David how Jones Oliver Wyman treasurer thank you very much for an inspiring speech I just had a question about a much less exciting topic tax you you alluded to that earlier fully support the idea of having the private sector drive growth but equally you need that recycling of capital that you mentioned into the public sector to drive areas like paid parental leave where institutions can't do that so easily at the moment we have the top five internet companies in the UK paying something like 35 basis points of corporation tax this obviously an issue that needs bodies like the G20 to agree on do you have any comments on how that might be approached by the G20 yes yes it is very much a focus of what we'll be talking about and I certainly want to see some outcomes it's not I'm going to be very careful here it's really the transformation in the global economy and the emergence of digital corporations and or corporations that focus on digital space that has created much of the dislocation and so I don't want to go down the path of blaming any one country particularly a country where many of these companies may reside or call home rather than reside so we've got to get that balanced right the first thing is we need transparency now the OECD is doing quite a bit of work in this area and I'm hoping that'll be one of the key outcomes out of our year leading the G20 which I'll have more to say about in a few weeks can I slip in a little procedural question over time in Davos the Prime Minister predicted a three-page communique coming from the leaders have you got a prediction for the meetings you chair the length of your communique oh yes I'll do better than that better than that good won't we barrel yes minister of course minister well good luck treasurer good luck thank you very much indeed ladies and gentlemen we were delighted to host the treasurer for this his first address here at Blyth Street to the Lowy Institute we're also delighted he took the opportunity to deliver the kind of address we like here strong thoughtful very wide ranging ranging from developing economies on the one hand to delicatessens on the other thank you also for letting us into the the news of the cabinet split over the Manly Sea Eagles let me let me just say most of Australia is behind you on that treasurer so can I ask you ladies and gentlemen to please thank the treasurer Joe Hockey can I do a little bit of cross promotion because my chairman tells me we're in sales the G20 study centre at the Institute all of its work is available on the website and it goes into great depth on many of the issues the treasurer addressed our blog the interpreter also addresses a lot of these issues and today we'll contain some responses to the treasurer's speech and finally can I let people know that on the 19th of February we have the Chief Army Lieutenant General David Morrison speaking here for those of you who don't know David he became an unlikely feminist hero in June last year when he recorded a passionate video message about the treatment of women in the Australian Army so please come along and watch David the Chief of Army on the 19th of Feb thank you very much ladies and gentlemen thank you again treasurer