Treasurer Joe Hockey and RBA governor Glenn Stevens will co-host a meeting of G20 finance ministers in Cairns this week.
Joe Hockey concedes it was an ambitious aim but maintains lifting global growth is necessary in still uncertain economic times.
This weekend will reveal how far G20 nations have come in putting together plans to fulfil Mr Hockey’s target of an extra two per cent growth over the next five years.
The world’s 20 richest countries agreed to the target at a meeting hosted by the treasurer earlier this year.
If achieved, it would lift economic activity by an estimated $US2 trillion, creating tens of millions of jobs across the globe.
“We are not too far away from the two per cent. There is still work to be done,” Mr Hockey told a conference this week.
Mr Hockey and Reserve Bank governor Glenn Stevens will again play co-hosts to a G20 finance ministers and central bankers two-day gathering in Cairns, which will set the framework for November’s leaders meeting in Brisbane.
Mr Hockey says there will be a “fantastic attendance” at the meeting, including US Federal Reserve chair Janet Yellen, US Treasury Secretary Jack Lew and World Bank president Jim Yong Kim.
But British Chancellor George Osborne and Bank of England governor Mark Carney have pulled out because of the Scottish independence referendum on Friday.
While there was some initial apprehension among G20 members over Mr Hockey’s growth proposal, several hundred measures were quickly identified in the following months that come under four core areas – employment, trade, competition and infrastructure.
Such efforts come as the Organisation for Economic Co-operation and Development warns that the tepid rate of global growth means unemployment will remain high and trade sluggish.
“The continued failure of the global economy to generate strong, balanced and inclusive growth underlines the urgency of ambitious reform efforts,” the OECD said in an assessment prepared for the Cairns meeting.
Mr Hockey’s big push is in attracting new private investment, particularly in infrastructure that will create demand in the near term and enhance productivity in the future.
“It will be the private sector that will reinvigorate global growth over the next decade,” he says.
The traditional stimulatory levers of fiscal and monetary policy are “at their limit”.
Divergent monetary policy strategies in major economies and geopolitical risks, such as the Ukraine and the Middle East conflicts, will be a focal point of discussions on the global economy on Saturday.
Sessions on growth strategies and investment leading into a working dinner will wrap up the first day.
Sunday will concentrate on the G20’s tax agenda and financial regulation reforms.
TOPICS UNDER DISCUSSION AT G20 FINANCE MINISTERS AND CENTRAL BANKERS MEETING IN CAIRNS
Saturday, September 20:
* Engagement session with B20 (Business), C20 (Civil Society), L20 (Labour), T20 (Trade) and Y20 (Youth)
* Session 1 – Global Economy – Update on outlook, geopolitical risks and differing monetary policy approaches
* Session 2 – Growth Strategies – Update on initiatives being undertaken aimed at lifting global growth by two per cent over the next five years
* Session 3 – Investment Package – Progress report on global infrastructure push
Sunday, September 21:
* Session 4 – Tax – Half way in a two-year program through the OECD to crack down on tax avoidance by multi-national companies
* Session 5 – Financial Regulation – Consider recommendations from Financial Stability Board on issues like global banks that are deemed ‘too big to fail’ and ‘shadow banking’
* Session 6 – Communique sign off