Case study: G20 global growth target
The G20 nations are collectively responsible for 85 per cent of world GDP and are home to two-thirds of the world’s people. The G20 has the combined political and economic clout to drive real reforms and restore growth.
The first Australian G20 event was a barbeque held on the lawns of Admiralty House overlooking Sydney Harbour. A neighbouring party, hosted by the Prime Minister, was an opportunity for international finance ministers to meet with Australian business leaders and share their perspectives on the issues besetting the global economy.
The event set the tone for the G20 year. It helped ministers engage on the policy decisions needed to tackle a stubbornly sluggish global economy. An ongoing dialogue between G20 members led to better understanding of one another’s policy constraints and intentions.
From the outset of the Australian G20 presidency, members agreed to cooperate in unprecedented ways. Treasury tightly managed meeting formats, agendas and communiques. The agenda was not derailed and achievements were plainly and succinctly explained.
Shortly after the barbeque by Sydney Harbour, finance ministers and central bank governors agreed the Sydney declaration — an unprecedented and ambitious target for global growth — to lift collective GDP by an additional two per cent above the implied trajectory by 2018.
They agreed to pursue a shift from government-led growth towards private sector-led growth, with particular focus on new private investment in infrastructure.
By the time of the Brisbane G20 Leaders’ summit in November, members had painstakingly identified measures that would together achieve a two per cent additional growth that could deliver $2 trillion to the world economy and millions of new jobs.
Demonstrating the importance of infrastructure to achieve global growth targets, the G20 agreed to establish the Global Infrastructure Initiative. The initiative will increase quality investment and drive global infrastructure investment.
The G20 worked on redesigning international tax rules so that they would keep up with advances in changing business models, particularly for multinationals.
Nations signed on to implement the Common Reporting Standard — the automatic exchange of information country-to-country — which will identify and catch tax cheats.
On the financial regulation agenda, the G20 confirmed the reforms needed to make the global financial system stable and make the economy more resilient to financial shocks.
From the outset, Australia was optimistic about what the G20 could achieve. Strengthened relationships helped nations commit to action. Leaders were held to account through relationships built at the highest level.