Home > News > World
Thursday February 20, 2014 MYT 10:30:01 AM
Thursday February 20, 2014 MYT 10:31:07 AM
by ian chua
SYDNEY (Reuters) - Australia will champion the causes of emerging markets during its presidency of the G20, calling for concrete global growth goals, a re-starting of reforms to international bodies, and for the U.S. Fed to consider the wider impact of its stimulus taper.
Ahead of the weekend meeting of finance ministers and central bankers from the Group of 20 developed and emerging economies, Treasurer Joe Hockey on Thursday outlined a wish list that included tackling international tax-minimisation practices.
"We must at all times fully explain our actions to each other and to the public, because clear communication, along with information sharing, is the very essence of macroeconomic coordination," Hockey told the Institute of International Finance in Sydney.
"At the moment, macroeconomic coordination is being talked about in the context of the U.S. Federal Reserve's gradual tapering of its asset-purchase program."
The Fed needed to be aware of the international impact of its tapering, and factor that into its actions, he said.
His comments came after the International Monetary Fund advised advanced economies, including the United States, to avoid pulling back stimulus too quickly given the weak global economic recovery.
Mike Callaghan, director of G20 Studies Centre at the Lowy Institute for International Policy, hoped the global impact of the Fed's tapering would be discussed, but added that he was not expecting any major outcomes at this weekend's meetings.
"At the moment, the approach taken by the U.S. and U.S. Fed is that they set monetary policy on the basis of the U.S. economy, full stop," he said.
"It would be good to see some recognition that its handling of this will have an impact on the rest of the world."
Hockey reiterated calls for the G20 to set global growth objectives and deliver on them.
"I think there would be value in setting out in concrete and measurable terms the objectives we are aiming for. We shouldn't talk in generalities about growth but should communicate our intentions to lift growth," he said.
Such proposals have drawn scepticism, with a German government source criticising the idea as a "slightly antiquated form for economic planning".
Hockey also said it was vital to complete the IMF governance and quota reform, which would give emerging powers such as China, India and Brazil a greater voice in the IMF. The plan has stalled because of the United States' failure to ratify it, annoying much of the developing world.
"Most importantly, the International Monetary Fund has a role to play as a credible, effective and legitimate lender of last resort," Hockey said.
"This is one of many reasons why completing the IMF governance and quota reform is so important - and why I, as chair of the G20 Finance process, will be devoting considerable effort to trying to move this forward."
On financial regulation, Hockey said significant progress has been made, but warned about over-reaching.
"The focus shouldn't be about constantly adding to the regulation agenda. More regulation should be cast aside in favour of better regulation."
Hockey noted that the global taxation system has not kept pace with changes in the business world, a major issue for cash-strapped governments around the world.
"As a consequence, we have seen the erosion of domestic tax bases resulting from international tax planning that takes advantage of the gaps in our current taxation systems," he said.
"The G20 will work this year towards these changes to make sure our tax systems keep pace with the changing ways people do business."
(Editing by John Mair)
Two Russian opposition parties unite after Nemtsov killing
Merkel to tackle refugee surge as tensions in Germany grow
China building airstrip in disputed South China Sea
Obama: Europe should keep Russia sanctions until Minsk accord implemented
Car bomb kills three outside U.S. consulate in Iraq's Kurdish capital
Israeli military networks breached by hackers - researchers
Kathy Ibrahim shares her stories in new album to be released next January
Brothers in art
Rosberg faster than Hamilton in Bahrain
Copyright © 1995-2015 Star Publications (M) Bhd (Co No 10894-D)