Finance ministers from the world’s richest countries are thrashing out ways to back the historic commitment they made in Sydney to lift economic growth.
Group of 20 finance ministers and central bankers meet in Washington on Thursday, led by federal Treasurer Joe Hockey and Reserve Bank governor Glenn Stevens, as part of Australia’s 2014 G20 presidency.
At his first meeting in February, Mr Hockey secured an agreement to lift economic growth by an additional two per cent over current projections over the next five years.
This is expected to lift global economic activity by an extra $US2 trillion and create tens of millions of additional jobs.
“The big issue will be deepening and reaffirming that commitment in Sydney to those ambitious measures,” Treasury’s Barry Sterland, and a G20 finance deputy, told AAP on Wednesday.
Mr Sterland, already in Washington for the talks, believes this is the right issue to pursue in response to the modest global recovery and the risks it faces.
“A key part of this commitment is to think about what can we do to improve infrastructure investment,” he said.
Mr Hockey, who left for the US on Tuesday, said he will be looking for an update on the kind of reforms members are looking to reach this commitment.
From Australia’s perspective, he will be able to present an agreement he made in March with the states and territories for them to sell public assets and direct profits into productive infrastructure projects.
States will get an incentive of 15 per cent of the asset sale value if they participate.
Mr Hockey may also give an indication of other measures that will be released in his first budget on May 13.
Mr Sterland said he was aware that other countries were also putting together very early draft proposals.
Other key issues for the meeting will be IMF reform and financial regulation, as well as international tax reform to counter profit shifting and tax evasion.
Mr Sterland said the tax agenda will be ongoing work between the G20 and the Organisation for Economic Cooperation and Development, but aims to be resolved by the September finance minsters meeting in Cairns.
The Australian government is holding a G20 tax symposium in Tokyo on May 9/10.
Mr Sterland will attend a G20 deputies meeting with Reserve Bank deputy governor Philip Lowe on Thursday.