International Monetary Fund Irony for Australia

international monetary fundJoe Hockey is going to co-chair an upcoming meeting of the G20 finance ministers and central bank governors in Washington now that Australia is president of the world economic forum. While he is in Washington, however, Hockey will also attend a meeting of the International Monetary Fund (IMF) and the World Bank, a meeting that contains a certain amount of irony due to the policies Hockey has advocated for Australia as finance minister. The Coalition government is actively trying to cut the carbon tax for Australia while the International Monetary fund has started to call for governments to use policies like carbon taxes to combat climate change.

In March, Hockey and the Coalition government tried to pass the repeal of the carbon tax. They failed to do so and will subsequently have to wait three months before bringing it to the Parliament again. But after the re-run elections in Western Australia, the Prime Minister Tony Abbott has claimed that it reinforces the people’s desire to repeal the carbon tax, apparently ignoring the fact that the electorate has swung away from his party. Despite Abbott and Hockey’s optimism, however, there are some in Australia who disapprove of the direction the government is taking on the carbon tax and on climate change in general.

Australian scientists are concerned that the current government in Australia is going to cause irreversible damage to the climate with the policies they have regarding the climate, including the carbon tax repeal. In fact, the Climate Change Authority’s recommendation for Australia has been to triple its emissions decrease goal. Nevertheless, Abbott, Hockey, and the government they are running have refused to listen to these recommendations and are still moving forward with their plans to end it.

Meanwhile, on Friday the International Monetary Fund called on finance ministers such as Joe Hockey to use their fiscal policies in order to work against climate change. The managing director of the IMF, Christine Lagarde, says the goal in calling for these policies is not just to check climate change, but to stimulate global economies. This is in line with the World Bank President Jim Yong Kim’s statement that climate change threatens the vulnerable economies of the world’s poorest countries. He said that despite the controversial nature of the issue, some attempt has to be made to tackle the issue of carbon pricing. In this case, the IMF and the World Bank have a united front on the matter of climate change and carbon taxes.

Enter Joe Hockey, whose country is the current president of the G20 and whose party is trying doggedly to repeal the carbon tax in their country. The irony of his finance leadership in Australia and his meeting with the IMF and World Bank is inescapable. It will be interesting to see how Joe Hockey fares in his meetings in Washington. As one of the primary ministers of a G20 country, his policies will be under a microscope as Australia chairs the G20. Moreover, his relationship with the IMF and the World Bank will have to be on good terms if Australia is to keep ties with them. On the issue of climate change, though, he diverges greatly from their stances. Thus, the irony of the International Monetary Fund’s stance on climate change and his goals for Australia are less funny and more troubling as Australia tries to operate as a power on the world stage of finance.

Opinion By Lydia Webb


Sydney Morning Herald
The Australian
International Business Times