Against this backdrop, we determined that our G20 year would focus on practical actions to lift growth and create jobs. We also resolved to shore up the resilience of the global economy by building a stronger and safer financial system, and enhancing the transparency and fairness of the international tax system.
But lifting global growth requires a global effort, and to this end we set ourselves a challenge in Sydney in February: to raise collective GDP by an additional 2% by 2018. Our ambitious growth strategies will deliver better quality investment and structural reforms in key areas of employment, trade and competition.
By September G20 members had put forward over 900 measures that would together achieve 1.8% additional growth. We are 90% of the way towards our goal, but we will need to do more and intensify our efforts if we are going to reach our aim of 2%.
Our commitments will, however, be meaningless if we do not translate them into outcomes. To this end, we will hold each other to account by monitoring implementation and carrying out peer reviews. The OECD, the International Monetary Fund (IMF) and other international organisations will provide important input into this process.
Fostering more investment in infrastructure has been central to our growth strategies. I am very proud that the G20 has agreed to a Global Infrastructure Initiative. The initiative includes members’ individual commitments to improve domestic investment climates, as well as collective actions to facilitate the development of infrastructure as an asset class, improve project planning and preparation, and reduce information asymmetries. The Global Infrastructure Hub will help us deliver specific elements of this important, multi-year initiative. The private sector, development banks and international organisations have been telling us they want this mechanism to tackle the infrastructure challenge.
On the resilience side of our agenda, we have largely completed our policy response to the vulnerabilities revealed by the financial crisis. We have delivered on key aspects of our core commitments to improve the resilience of financial institutions, the address problem of “too big to fail” companies, tackle shadow banking risks, and foster more transparency in derivatives markets. With
these reforms we will deliver a safer financial system, which will also support economic growth. From here we will focus on implementation of our commitments, and monitoring new and emerging risks.
On tax, we have a very ambitious agenda to address the global problem of tax avoidance and evasion. The OECD has been critical in driving this agenda.
We have made strong progress on 7 of 15 action items under the two-year G20/OECD Base Erosion and Profit Shifting (BEPS) Action Plan. This work will not only help secure revenue bases, but will also bring international tax rules into the 21st century and ensure they keep up with the changing business models of multinational companies.
We have also endorsed the Common Reporting Standard on the automatic exchange of tax information. This will give our tax authorities the information they need to identify and deal with tax cheats. At our meeting in Cairns, we resolved to swiftly implement the standard and called on all financial centres to do the same.
We will also continue our work with developing countries to ensure that they, too, benefit from the tax agenda.
It is clear that over the past year we have made great strides in addressing the common challenges we face.
For Australians, we truly do live in the “lucky country”, with 23 years of uninterrupted economic growth. But, like others, we face considerable challenges. Our economy is going through one of the biggest transformations in its history. The growth led by investment in resources projects is shifting to broader-based drivers of activity in the non-resources sectors.
Faced with this transition, we have been working hard to underpin domestic growth with policies that support fiscal sustainability, promote business confidence, and create the right environment
for businesses to invest and succeed.
While we are starting to realise the benefits of our work, with recent data showing a pick-up in economic growth, we can’t rest on our laurels. Australia, and indeed the world, must continue the work of putting global growth on a secure trajectory. That is what our G20 agenda is designed to do.
It has been an honour for Australia to hold the G20 presidency in 2014, and for me personally to co-chair the G20 Finance Ministers’ and Central Bank Governors’ meetings. I am truly encouraged by what we have achieved. Now we must maintain the momentum in the years ahead and make our reform agenda a reality. This is the real battle, and this is what will make a clear difference to the lives of our citizens.
© OECD Observer No 300, Q3 2014