The G20 2014, held in Sydney, was instrumental for finance ministers and central bank governors to discuss global tax issues, reorientation and refinancing of the International Monetary Fund and cooperation among central banks to work together on pertinent issues.
Australia, through Joe Hockey, organised the summit held Feb 22-23.
The Group of 20 finance ministers and central bank governors, through an official statement, reported the following results and aims for 2014:
- The United States, United Kingdom and Japan showed impressive growth in the global economy, while China was seen to continue its strong growth. There had also been promising growth among developing market economies with tail risks diminishing.
- However, the job market remains unstable with citizens still having hard time finding for employments. Financial markets were weak due to public debts, global imbalance and economic vulnerabilities.
- The participants for the summit vowed to create significant job openings for the public.
"We commit to developing new measures, in the context of maintaining fiscal sustainability and financial sector stability, to significantly raise global growth. We will develop ambitious but realistic policies with the aim to lift our collective GDP by more than 2 percent above the trajectory implied by current policies over the coming 5 years. This is over US$2 trillion more in real terms and will lead to significant additional jobs. To achieve this we will take concrete actions across the G20, including to increase investment, lift employment and participation, enhance trade and promote competition, in addition to macroeconomic policies. These actions will form the basis of our comprehensive growth strategies and the Brisbane Action Plan."
- Bank governors promised to come with policies that will open opportunities in many advanced economies to gradually achieve price stability and economic growth - this hopefully will make the global economy positive reducing reliance on easy monetary policy. While this is being achieve, economic policy can aid with measures to increase private sector demand, including investment.
"We all stand ready to take the necessary steps to maintain price stability, by addressing in a timely manner deflationary and inflationary pressures. All our central banks maintain their commitment that monetary policy settings will continue to be carefully calibrated and clearly communicated, in the context of ongoing exchange of information and being mindful of impacts on the global economy."
- As economies may just be adjusting to changing policies and with considerations to problems specific with different countries, domestic macroeconomic, structural and financial policy frameworks will be strengthen.
- As exchange rates change from time to time, "We will consistently communicate our actions to each other and to the public, and continue to cooperate on managing spillovers to other countries, and to ensure the continued effectiveness of global safety nets."
- Fiscal strategies will be implemented to achieve economic growth and job creation. As for debt, it will be place as a share of GDP on a sustainable path.
- For the global economy to achieve both short and long term growth, investment for infrastructure and small and medium enterprises will be highly promoted. Freedom for private investments will be encourage through establishing sound and predictable policy and regulatory frameworks and emphasising the role of market incentives and disciplines.
"These, along with other actions to promote long-term private sector investment, maximise the impact of public sector capital expenditure, and enhance the catalytic role of multilateral development banks will be an important part of our growth strategies and the Brisbane Action Plan."
- Participants vocally expressed regret that the IMF quota and governance reforms agreed to in 2010 have not yet become effective and that the 15th General Review of Quotas was not completed by January 2014.
"We deeply regret that the our highest priority remains ratifying the 2010 reforms, and we urge the US to do so before our next meeting in April. In April, we will take stock of progress towards meeting this priority and completing the 15th General Review of Quotas by January 2015."
- Still, commitment to global response to Base Erosion and Profit Shifting (BEPS) based on sound tax policy principles was expressed.
"We continue our full support for the G20/OECD BEPS Action Plan, and look forward to progress as set out in the agreed timetable. By the Brisbane summit, we will start to deliver effective, practical and sustainable measures to counter BEPS across all industries, including traditional, digital and digitalised firms, in an increasingly globalised economy. We endorse the Common Reporting Standard for automatic exchange of tax information on a reciprocal basis and will work with all relevant parties, including our financial institutions, to detail our implementation plan at our September meeting. In parallel, we expect to begin to exchange information automatically on tax matters among G20 members by the end of 2015. We call for the early adoption of the standard by those jurisdictions that are able to do so. We call on all financial centres to match our commitments. We urge all jurisdictions that have not yet complied with the existing standard for exchange of information on request to do so and sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters without further delay. We stand ready to give tougher incentives to those 14 jurisdictions that have not qualified for Phase 2 of the evaluations. We will engage with, and support low-income and developing countries so that they benefit from our work on tax."
- Hopefully by 2014, central bankers had completed all aims derived through the summit - building resilient financial institutions, ending too-big-to-fail, addressing shadow banking risks and making derivatives markets safer.
People can expect resilience in the financial system and greater certainty in the regulatory environment to support confidence and growth, reduces harmful fragmentation and avoids unintended costs for business.
"We commit to cooperate across jurisdictions with a renewed focus on timely and consistent implementation supported by meaningful peer reviews, including OTC derivatives reform. In relation to this reform, we agree that jurisdictions and regulators should be able to defer to each other when it is justified by the quality of their respective regulatory and enforcement regimes, based on similar outcomes, in a non-discriminatory way, paying due respect to home country regulatory regimes."