G-20 Meet in Brisbane to Focus on Structural Reform Measures to Up GDP by 2%

Meeting of G-20 Finance Ministers and Central Bank Governors, Cairns, 21 Sept 2014

Brisbane Targets set by G-20 FMs

• Aim to lift our collective GDP by more than 2 per cent by 2018 above the trajectory implied by policies in place at the time of the St Petersburg Summit in 2013. Structural reforms will be important in this regard.

• Monetary policy in advanced economies continues to support the economic recovery, and should address, in a timely manner, deflationary pressures where needed, consistent with central banks’ mandates.

• Implement our fiscal strategies flexibly to take into account near-term economic conditions, so as to support economic growth and job creation, while putting debt as a share of GDP on a sustainable path.

• Investment is critical to boosting demand and lifting growth. Today we have agreed to a Global Infrastructure Initiative to increase quality investment, particularly in infrastructure.

No more Bank Failures?

We have delivered key aspects of the core commitments we made in the wake of the financial crisis in 2008 to build a stronger and more resilient financial system which underpins growth in the global economy. Banks are now generally better capitalised and stronger liquidity arrangements are being put in place. For the Brisbane Summit, work is underway on a plan that will increase consistency in banks’ application of the strengthened Basel III rules on capital. We have identified global banks and insurers that are so large, complex and interconnected that their failure could cause significant economic and financial sector disruption, and potentially result in serious taxpayer losses. We have set stronger capital requirements for global systemically important banks. We welcome the substantial progress made to date in defining the terms and conditions of a proposal for addressing the too-big-to-fail issue through additional loss absorbing capacity that would further protect taxpayers if these banks fail. We welcome the FSB’s statement that it will be in a position to deliver a proposal in time for the Brisbane Summit. The proposal will be subject to public consultation and a quantitative impact assessment and further refinement before any final measure is agreed. By the Brisbane Summit, the FSB will deliver the remaining core elements of its shadow banking framework and will update the Roadmap agreed in 2013 to support continued monitoring and actions to address potential systemic risks in this area. Our reforms to the over the counter (OTC) derivatives market will reduce systemic risks and increase transparency. We call on regulatory authorities to make further concrete progress in implementing these OTC derivatives reforms as agreed. We encourage jurisdictions to defer to each other when it is justified, in line with the St Petersburg Declaration.

Cross Border Tax Avoidance – Tax Information Exchange

• We are strongly committed to a global response to cross-border tax avoidance and evasion so that the tax system supports growth-enhancing fiscal strategies and economic resilience. Today, we welcome the significant progress achieved towards the completion of our two-year G20/OECD Base Erosion and Profit Shifting (BEPS) Action Plan and commit to finalising all action items in 2015. We endorse the finalised global Common Reporting Standard for automatic exchange of tax information on a reciprocal basis which will provide a step-change in our ability to tackle and deter cross-border tax evasion. We will begin exchanging information automatically between each other and with other countries by 2017 or end-2018, subject to the completion of necessary legislative procedures.

• IMF quota and governance reform remains a key priority for the G20 and we are committed to maintaining a strong and adequately resourced IMF. We continue to urge the US to ratify the reforms agreed to in 2010 by year-end and reaffirm our Leaders’ agreement in St Petersburg and our agreement in April 2014.