The Abbott government is struggling to implement key elements of the economic growth plan it promised other G20 countries in Brisbane five months ago.
The treasurer, Joe Hockey, is heading to the United States for a meeting of the G20 finance ministers and central bank governors in Washington DC later this week.
Before leaving Australia for the meeting, Hockey said G20 members “need to follow through on their ambition to lift growth by an additional 2% by 2018”.
But obstacles in the Senate, and in some cases resistance from the Coalition backbench, have undermined the government’s attempts to implement the “comprensive growth strategy” that Australia presented to the G20 summit that it hosted in November.
Australia’s “new policy commitments” included the six-month waiting period for young people to receive Newstart payments, a gradual increase in the pension age to 70 years, and limiting pension increases to movements in the consumer price index rather than the usually higher benchmark of wage growth – none of which have passed into law.
The social services minister, Scott Morrison, is now rethinking the government’s pension changes in the face of Senate hostility and unease within Coalition ranks.
The growth plan also included the government’s package to deregulate university fees and extend funding to sub-bachelor programs and private colleges.
Tony Abbott specifically mentioned the higher education changes in an address to other G20 leaders in Brisbane when he spoke of the political constraints to economic reform. The prime minister said budget repair had proven to be “massively difficult” for the government.
Since the G20 summit, the university measures have been blocked by the Senate twice, although the education minister, Christopher Pyne, said he would try a third time to remove limits on tuition fees.
Australia’s growth strategy also included Abbott’s “signature” policy to provide six months of parental leave paid at the full replacement wage. The document said the policy would lift female labour force participation but noted it was “subject to parliamentary approval”.
Abbott dropped the policy in February – shortly before he faced an attempted leadership spill – bowing to longstanding backbench concerns that the policy conflicted with the government’s broader message about the need for budget restraint. He said childcare reform was a bigger priority in the push to improve workforce participation.
The government has also struggled to secure parliamentary approval for changes to workplace laws including the reinstatement of the Australian Building and Construction Commission set up by the Howard government. But it has launched a Productivity Commission review of industrial relations as promised.
Despite setbacks, the government has had success implementing some of the measures outlined Australia’s G20 growth strategy. For instance, the document foreshadowed the entry into force of Australian trade agreements with South Korea and Japan. These deals took effect in December and January, respectively.
Hockey said the forthcoming meetings in Washington DC would discuss the major challenges facing the global economy, with growth remaining “modest and uneven” and financial markets “volatile”.
“As such, I strongly support the G20’s focus on implementing the G20 growth strategies we agreed to last year in Brisbane,” he said.
“At the meetings, I will update G20 members on progress in establishing the global infrastructure hub in Sydney. The hub will provide a platform to lift quality public and private infrastructure investment. All countries, regardless of whether they are members of the G20, will be able to work with the hub and access and contribute to the expertise it gathers.”
Hockey said the hub’s permanent board would hold its first meeting in Washington, describing it as “an important step” in its establishment.
Each country presented a growth strategy to the G20 summit in Brisbane last year. In their final communique, G20 leaders said they would review progress on their growth plans at their next meeting.
Hockey said at the time: “The G20 will focus on the implementation of our collective commitments. We will hold each other to account for our actions.”
In an interview with the ABC on Monday, Hockey insisted the growth targets remained in place. “There’s no doubt that what was the Brisbane declaration is alive and well and there is a steely determination among finance ministers to do everything we can to collectively grow the world economy,” he said.
