Thank you for the kind welcome and for inviting me to speak at your meeting today.
I appreciate you taking time in your busy program to allow me to update you on the G20 work agenda under Australia’s Presidency.
The February G20 Finance Ministers and Central Bank Governors meeting made a strong start, and work is now underway to deliver on members’ collective ambition to lift global growth.
Through their actions, G20 members have the potential to make a real difference: to improve living standards, lift people out of poverty and make the global economy more resilient to future shocks.
We are very focused on ensuring that others are aware of what the G20 does and why it is important.
The response to our agenda so far has been very warm and we think there is a high degree of interest in the priorities being pursued by the G20.
Australia considers events such as this as an important element of the G20’s outreach and advocacy program, and we are very interested in the views of G24 officials on pressing global economic issues and the agenda for 2014.
I would like to give you a sense of what the G20 agenda looks like under our Presidency, the progress we have made so far and the issues we will be focusing on during the April G20 Finance Minister and Central Bank Governors meeting.
Australia is focused on providing effective “stewardship” of the G20 and ensuring that its agenda has a truly global focus and relevance to the priority challenges of the time.
Australia has structured discussion around the key themes of:
- One, promoting stronger economic growth and better employment outcomes; and
- Two, making the global economy more resilient and able to deal with future shocks.
We aim to promote stronger economic growth by unlocking private sector-led growth through investment and trade.
The centrepiece of the investment agenda will be specific domestic reform commitments from members that tangibly improve the investment environment and thus unlock private sector investment, particularly in the area of infrastructure.
We also think it is vitally important to build resilience in the global economy. This draws on a range of existing G20 work streams that contribute to global stability, including macroeconomic policy coordination, reform of international institutions (particularly the IMF), implementation of the financial regulation agenda and the G20’s work on international tax rules.
The G20’s work on development, energy and anti-corruption also fit under this theme.
Australia is seeking to leave a tangible and lasting legacy in terms of the way the G20 operates through delivering leader-like outcomes, ensuring there is a focused agenda, improving communication about the G20, having meaningful engagement with business and other stakeholders, and effective outreach to non-G20 members.
The first G20 Finance Ministers and Central Bank Governors meeting of Australia’s presidency took place at the end of February.
A key outcome of the meeting was a commitment to implement policies with the aim of lifting global GDP by more than 2 per cent above the current trajectory over the next five years.
These policies could mean an extra two trillion US dollars in global economic activity and tens of millions of additional jobs.
Last year in St Petersburg, the G20 committed to deliver comprehensive growth strategies by the Brisbane summit – these growth strategies will be a key mechanism for capturing the policy measures countries will put in place to meet the 2 per cent ambition.
Growth strategies are expected to capture concrete actions across the G20 to boost investment, trade, competition and employment opportunities, as well as measures to improve macroeconomic fundamentals.
Investment – particularly in infrastructure – was a key feature of discussions. G20 members had an extensive discussion about the potential elements of a package of measures for the Brisbane summit that will leverage greater private sector investment for infrastructure and small and medium enterprises.
We also recognise that this work on investment and infrastructure is important to lift growth and employment in developing and low-income countries.
The state of the global economy was also a key issue for the meeting, particularly with regard to monetary policy and the significant financial market volatility experienced by emerging market economies in January. Important headway was made in these discussions. The group acknowledged that emerging market economies were now more resilient and there was an acknowledgement from advanced economy central banks in setting monetary policy they should be mindful of global impacts. Clear communication and careful calibration of monetary policy must continue, along with information exchange between central banks.
The Sydney meeting also made solid progress in ensuring companies pay their fair share of tax. A Common Reporting Standard was endorsed by the G20, allowing for the automatic exchange of tax information between jurisdictions. This standard will enhance transparency and reduce opportunities for tax evasion and avoidance.
It’s important that all countries participate in, and benefit from, the G20’s tax agenda. This year, Australia has two priorities to do this. Our first priority is to analyse the impact of base erosion and profit shifting in low income countries. Our second priority is to develop a roadmap to outline steps developing countries can take to move towards automatically exchanging tax information.
I would like to turn to what we would like to achieve out of this meeting and give you a sense of the issues we will be focusing on during the meeting.
The focus of our meetings here in Washington will be on maintaining the momentum we achieved in Sydney.
There was a lot of goodwill in the Sydney meeting and we would like to maintain this level of ambition.
In the session on the global economy and growth strategies, we will build on the Sydney discussion and seek to deepen macroeconomic coordination. The session will also seek to reach a common understanding of what is required to achieve the 2 per cent growth ambition.
While the focus of our efforts predominately relates to domestic reforms, joint action can generate significant positive spillovers, help reduce persistent external imbalances and strengthen market confidence, thereby reducing downside risks and volatility.
My colleague, the Australian Treasurer has previously expressed that the world is a far better place because of the IMF’s role as a key international institution. Australia is a strong advocate for quota and governance reform to ensure reliable resourcing of the IMF and provide emerging market and developing countries greater voice and representation at the IMF, reflecting their growing share of the global economy.
That’s why implementing the 2010 IMF quota and governance reforms are crucial for the IMF’s legitimacy, effectiveness and credibility. But in the face of delays, the G20 will do whatever it can to ensure the global financial safety net remains effective.
The financial regulation session will focus on the areas of global systemically important financial institution resolution reforms and the review of the structure of the representation of the Financial Stability Board.
In the investment session, we will be focusing on shaping the elements of a package of measures for the Brisbane summit that will help leverage greater private sector investment, particularly for infrastructure.
We will also consider progress by multilateral and regional development banks on approaches to better support infrastructure investment and financing as a complementary element.
So, as you can see, we have set an ambitious agenda for our Presidency. The challenge going forward will be to sustain this momentum, and achieve outcomes at the Brisbane summit.