Australia aims for G20 global growth pact

The G20 represents about 85% of the world economy and 75% of global trade.

FILE: The G20 will also discuss taxation and the withdrawal of the Federal Reserve’s extraordinary stimulus. Picture: UN.

SYDNEY - Australia will use its presidency of the Group of 20 advanced and emerging economies to push for agreements on strengthening global growth and to generate ideas on funding public infrastructure, Treasurer Joe Hockey said on Wednesday.

However, Hockey's push to reach a hard target for growth drew scepticism ahead of a weekend meeting of G20 finance ministers and central bankers in Sydney.

The G20, which represents about 85 percent of the world economy and 75 percent of global trade, will also discuss taxation and the withdrawal of the Federal Reserve's extraordinary stimulus, which has unsettled some emerging markets.

"There will be discussions about tapering and what it means for the global economy. Taxation arrangements, particularly in relation to major digital companies and transfer pricing by companies... that's going to be discussed," Hockey told a media briefing in Sydney.

The meeting will be the first of several G20 events to be hosted by Australia this year, culminating in a World Leaders Summit in November.

Hockey said he wanted the officials to work on how to get private sector cash into infrastructure investment, using Australia's backlog of projects worth some A$400 billion as an example.

"We need to focus on productive infrastructure that is going to drive new investment and new job growth," he added.

The Australian government has plans to sell up to $100 billion worth of ports, power station and other state-owned infrastructure, with the funds raised earmarked for new roads and rail in particular.

At the media briefing, Hockey declined to elaborate on his comments made to the Australian newspaper that he was working towards an agreement to set a hard target for global growth beyond the current 3,7 percent projection.

Setting the scene for tough negotiations, a German government source said Germany rejected concrete goals for economic growth and investment development.

Markets expect little concerted action to tackle recent ructions in emerging markets, which have been stung by the gradual withdrawal of the flood of cheap funds from major economies.

"There is simply not enough of a crisis in [emerging markets] at present for international financial institutions or developed markets to accept the need for global rebalancing to be altered - the case from some more exposed emerging markets is seen as too flimsy," Nomura economist Peter Attard Montalto said in a note.

"Equally, developed markets can respond that they are still printing [money]; they are not hiking rates at this point. It looks likely that emerging markets will remain dependent on their own policy options to address their own actual [and perceived] vulnerabilities.