Current monetary policy is making the rich richer and needs to be changed, Federal Treasurer Joe Hockey has told parliament.

Speaking on Monday, Mr Hockey warned structural reform was the only option to generate future growth, saying governments could not continue to spend “hand over fist” and had to alter ‘loose monetary policies’.

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“Loose monetary policy has done its work and unfortunately made the rich richer through rising asset values,” Mr Hockey said.

“Loose fiscal policy, that is governments spending hand over fist, is limited because they haven’t got the money to be able to continue to do that and put in on the credit card forever.”

The comments come after the International Monetary Fund sharply downgraded their outlook for global growth earlier this month.

Prime Minister Tony Abbott yesterday flagged possible changes to state taxes which could include reforms to the goods and services tax (GST).