Lagarde urges Aust G20 agenda

The chief of the International Monetary Fund, Christine Lagarde, has urged Australia to use its stewardship of the G20 to lead the group in unified financial sector and tax reforms, Fairfax Media reports.

According to the newspaper, Ms Lagarde's comments come as a wave of unilateral approaches to monetary policy challenges the authority of the IMF's role in fostering global economic co-operation.

The IMF chief said the reforms enacted following the global financial crisis had made progress, but warned "the mission is not accomplished".

''I would hope that the resilience, the determination and the energy of Australians in general and hopefully of the Australian G20 team can help the world complete the job,'' she said.

The G20's finance ministers and central bankers will meet in Sydney this weekend.

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The IMF is just another body of opinion, and not the fount of all wisdom. They've just criticised Abbott for his concern to avoid deficits on the grounds that they don't matter very much, and they increase growth. That debt increases growth would seem, SHORT TERM, is a given. But the long term is not just an endless string of short-terms. Lagarde should talk to PIMCO's chief, who has just said: "If you go back to the Asian debt crisis in 1998, which spread on to the Latin American countries, their post-crisis policy was 'we will not let this happen again'. One of the tools they have used to ensure [this] is to build up massive central bank reserves. The countries that have done this - through positive trade balances and responsible fiscal policies - are sturdy. For those that sold their future, it's coming back to get them." If debt (individual, corporate, or national) is for productive investment' - however you define 'productive' - then it's arguably very good and what capitalism depends on. If it's for 'maintenance' or consumption then it is "selling your future". Whatever it's for, it increases your risk and PIMCO see this as a danger - and so presumably does Abbott. A recent TV ad has this nice chap spruiking his nice bank, who gave him the loan that he "needed" to put in a pool! Well - that's just what we don't need, I suspect.