The Australian government has cited controversial cuts to unemployment benefits as one of the key structural reforms that will increase economic activity by 2 per cent, according to a draft of its growth strategy to be submitted to the G20 leaders' summit.
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The reference to the jobless reforms – which include a measure preventing unemployed people under 30 from accessing welfare payments for up to six months – comes even though the changes have been blocked in the Senate.
The objective of boosting economic growth by 2 per cent "above what is currently expected" during the next five years is the main goal of the G20 meeting, to be held in Brisbane at the weekend.
Each of the countries that make up the G20 is required to submit action plans to boost growth ahead of the meeting.
According to a draft of Australia's action plan obtained by Fairfax Media, the Abbott government nominates five key commitments that underpin its pledge.
"Employment welfare reforms" is ranked as the No 2 commitment, and notes that the changes will "strengthen participation and activation strategies".
By cutting payments entirely to some unemployed and requiring jobseekers to search for more jobs to qualify for payments, the government argues it will spur the unemployed to look for work rather than live on welfare, thereby boosting economic activity.
However, Labor assistant treasury spokesman Andrew Leigh said cuts to welfare payments such as the unemployment benefit, family tax benefits and the pension would act to suppress economic growth.
"If you produce a budget that reduces the income of the poor, it has an impact on consumer demand because they spend everything they've got," he said.
"That will detract from economic growth."
The OECD has reportedly endorsed the government's growth strategy, and that of the G20 more broadly, with special praise for the emphasis on boosting infrastructure investment..
According to its draft action plan for growth, the government's first key commitment to expanding economic activity is infrastructure spending, including its "asset recycling initiative" – encouraging state governments to privatise assets and then plough the proceeds into new projects.
The other key commitments are "cutting red tape", "contributing to global trade liberalisation" and "creating self-reliant industries".
In a statement released on Sunday, Prime Minister Tony Abbott described the G20 leaders' summit as the most important meeting ever held in Australia.
"It won't be a talkfest. It's an economic summit – so it will focus on what can be done to create jobs, identify tax cheats and improve the world economy," Mr Abbott said.
"Our focus is on the economy, because G20 members account for 85 per cent of the world economy and 75 per cent of world trade."
