Michael Potts: G20 NZ's chance to make a real difference

Opinion

Brisbane summit an opportunity for change and Australia welcomes its neighbour’s help, says Michael Potts.

In a few weeks, Australia will welcome leaders of the world's major economies to Brisbane for the G20 Summit. Australia invited New Zealand to take part in the G20 during our 2014 presidency. Over this period, New Zealand has been an engaged, active and dynamic partner in the forum.

The G20 Trade Ministers Meeting and the B20 Summit in July highlighted the "gold standard" transtasman trade and economic relationship. We also held an Australasia Business Week which demonstrated to G20 economies and global decision-makers the strength and value of our integration, our collective profile and deep connection to the region.

The centrepiece of Australia's G20 presidency has been a push to boost collective G20 economic growth by more than 2 per cent above "business as usual" by 2018, which, if achieved, would deliver $2 trillion to global GDP and generate millions of additional jobs. As great trading nations with open economies, both Australia and New Zealand will benefit.

As a crucial component to lifting growth, infrastructure investment is high on the agenda. Leading New Zealand CEOs and business organisations have played an important role in the B20 group of some 400 business leaders from across the world. The B20's recommendation for an "infrastructure hub" has influenced the G20's plans to drive quality infrastructure investment right across the G20 economies and beyond.

The G20 recognises that women's economic empowerment and reducing gender inequality are important to global growth and economic resilience. Labour and Employment Ministers have recommended that G20 leaders adopt the goal of reducing the gap in participation rates between men and women in G20 countries by 25 per cent by 2025 as a reference for action.

G20 members are also focused on building resilience in the global economy. Finance Ministers and Central Bank Governors have made substantial progress to strengthen financial institutions and foster global stability.

The G20 is on track to deliver on its two-year work plan to address tax avoidance. This will help ensure the international tax system keeps pace with technology and changing business practices so governments receive the revenue needed to provide services.

Companies should pay tax in the country where they earn a profit. The Finance Ministers and Central Bank Governors also agreed to a rapid implementation plan for the automatic exchange of information between tax authorities to help catch tax evaders.

We face an increasingly difficult global economic situation. The International Monetary Fund (IMF) has revised its global growth forecast for 2014 down to an average of 3.3 per cent from 3.6 per cent. The global growth forecast for 2015 has also been revised down.

World Trade Organisation (WTO) economists now expect global trade volumes to grow just 3.1 per cent this year, down from the 4.7 per cent they predicted earlier in the year. We also need to lift global employment. These challenges strengthen our resolve.

G20 actions reverberate in every corner of the globe. Achieving the G20's growth target is critical not only for the G20, but also to put the world's economy firmly back on track.

Australia is doing its part. We are repairing the national budget and shifting spending away from short-term consumption and towards growth-enhancing investment. We're lowering the costs of doing business and further opening our trade borders and taking a hard look at competition reform.

New Zealand understands the need for reform. Australian Treasurer, Joe Hockey, recently remarked that "New Zealand is showing the world how economic reform should be done". The private sector and the involvement of our citizens are also critical to the G20's success.

We have welcomed recommendations from business, civil society and labour and youth representatives from New Zealand and G20 countries.

We do not seek growth for its own sake, but to help our citizens find new and better jobs, expand business in international markets and to build the infrastructure this century demands.

We are committed to making a real change for the better at the summit. We welcome New Zealand's contribution.

Michael Potts is the Australian High Commissioner to New Zealand.