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 The Business 20 Group, which is holding a summit in Sydney this
week, criticized cumbersome global rules that make it hard for large
pension funds and insurance companies to invest in major
infrastructure projects.
Relaxing those rules and smoothing out approval and procurement
processes that, in some countries, can result in a project taking 10
years to get the green light will be critical if the G20 is to meet
its ambitious growth targets, B20 leaders said.
"Infrastructure investment is one of those critical levers you can
pull that can drive into economic growth relatively quickly," said
David Thodey, Telstra Corp Ltd chief executive and spokesman for the
G20 on infrastructure issues.
The B20, set up in 2010 to give policy recommendations on behalf of
the international business community to the G20, has estimated that
at least $57 trillion will be needed to finance infrastructure
projects worldwide through 2030 to meet the demands of global
economic growth.
Despite that, Thodey said, there was no priority list of global
infrastructure projects, making it difficult for potential investors
to know where to start.
G20 finance ministers agreed in Sydney in February to draw up "real
and effective plans to lift the global economy" by more than 2
percent "above the trajectory implied by current policies" over five
years. They meet again in Australia in September.
Australian Treasurer Joe Hockey has criticized progress towards the
2 percent goal as too slow. "Some countries like China and
increasingly Germany have been very supportive of our goals, but
there's more to be done," he told ABC radio.
Australia and New Zealand Banking Group CEO Michael Smith said one
big problem was excessively tight financial regulation imposed in
the wake of the global financial crisis.
"We've heard the feedback from market participants that regulation
is unintentionally restricting financial inclusion, deterring
infrastructure investment and limiting the provision of trade
finance," said Smith, spokesman for a B20 task force on financing
growth.
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"I'm not pre-empting things by saying that the task force wants the
G20 to pause, take stock and align global regulation."
Tackling the infrastructure deficit is one of four areas the B20
says is critical to meeting the growth goal, alongside financing
growth, slashing unemployment and boosting investment and trade.
Australia is the host of this year's G20 meetings, a fact that B20
sherpa Robert Milliner said gave credibility to the talks, given
Australia's record two decades of unbroken growth.
PROFIT SHIFTING
One issue that won't be on the table at the B20 talks is corporate
"profit shifting", which costs governments up to $3 trillion a year,
according to researchers from Tax Justice Network.
G20 finance ministers agreed in February to develop stricter rules
on cross-border taxation to close loopholes that have allowed
multinationals such as Starbucks Corp, Google Inc, Apple Inc and
Amazon.com Inc to avoid paying taxes.
Finance ministers endorsed a set of common standards for sharing
bank account information across borders with automatic exchange of
information among G20 members to take effect by the end of 2015.
Richard Goyder, B20 Chair and CEO of Wesfarmers Ltd, said the group
endorsed a system under which taxes are levied where the profits are
made, but he expressed scepticism that the G20 would be able to
agree on a policy palatable to all countries.
"We'll leave it to governments to sort out," he said.
(Editing by Alan Raybould)
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