Thank you for the warm introduction. In turn, let me welcome you to the beautiful city of Brisbane. It's a pleasure to be here today to talk about how the idea of 'rebuilding economies, jobs and wages' influenced the G20 agenda this year.
Nine months ago, when I first met with G20 Finance Ministers and Central Bank Governors in Sydney, the notion of 'rebuilding the economy' was at the forefront of our minds. And it continues to be.
I believe that having sound economic policy is not a goal in itself. It is a tool that helps us to do the right thing by the people who have given us the responsibility to lead.
Getting policy right is not about winning a prize. It's simply about helping to improve people's lives.
Few things distinguish good society from bad more than the way individuals are treated: with respect, with dignity.
The most important thing governments can do to enhance individual dignity is to provide opportunities and create the environment in which anyone who can work is able to get a productive job.
To enhance individual dignity and increase self-reliance is fundamental to building better and more decent societies.
We are almost six years on from the global financial crisis and international recovery remains frustratingly gradual. We have serial downgrades in global growth forecasts and unemployment across our economies remains stubbornly high.
The financial crisis has robbed the world of 62 million jobs that should have been created over the financial crisis period.
A 'business-as-usual approach' to our policy settings this year is not an option. The status quo would rob millions more people of jobs over the next five years.
The economic and social costs behind these statistics are devastating. By not harnessing the wealth of available human capital, we limit the productive capacity of our economies and our people's potential. Lower output, lower income, lower quality lives.
It means we do not have full capacity to look after those who are vulnerable: to educate our children, to give them the best start in life and to reward our seniors for their lifetime of service.
The cost of failure falls disproportionately in our communities.
- The young, in their prime, are robbed of their opportunity to start – leaving them vulnerable, feeling alienated and not experiencing the dignity and reward of work.
- Women are robbed of opportunities to participate to their potential and to overcome entrenched disadvantage.
- Older workers are denied what they have earned – the right to a decent retirement and recognition of their contribution.
- Indigenous communities in many countries feel the continuing burden of disadvantage and marginalisation.
- The long-term unemployed lose hope - they despair; and
- Too many people are forced to opt out, to settle for work in the black economy, without protection, making limited contribution to the collective good.
At the same time, traditional policy levers to address these challenges are increasingly limited. For a long while in several key advanced economies, monetary policy has done the heavy lifting. For the vast majority of us, fiscal policy is constrained by high levels of public debt.
When I met with my colleagues in Sydney in February, it was clear that growth across the global economy was patchy. We were united in our view that the prospect of accepting weaker growth and lower living standards was unacceptable to all in the G20.
So we made the landmark commitment to boost growth by an additional two per cent by 2018. This ambition would translate into around $2 trillion dollars in global economic activity, and millions of new jobs.
The two per cent growth ambition was critical to galvanise our collective resolve. We needed to take concrete, tangible actions to remove barriers to growth, to put our economies on a firmer footing and to create jobs for our citizens.
This is what every G20 member has done in their growth strategy. My colleagues around the G20 have been working hard this year to develop a set of new and ambitious reforms in four policy areas that will deliver enduring growth benefits. Our actions will lift investment, enhance competition, promote trade, and of course, boost employment and participation.
There has also been a focus on measures to empower the private sector. We know that in both advanced and emerging economies, private enterprise is the engine of job creation. In many of our countries, including Australia, this means recognising that it's not just about big business and mega-projects. Our small businesses contribute mightily to both employment growth and to innovation. To ensure that our citizens have job opportunities, it is crucial that we create the right environment for business: large and small. Taken together, our policies will encourage businesses to innovate, invest and thrive, and in doing so, drive quality job creation.
By investing in infrastructure we create jobs.
By removing trade barriers we create jobs.
By cutting regulation, red tape and bureaucracy we create jobs.
By eliminating disincentives from the tax system we create jobs.
By fostering both innovation and competition we create jobs.
By making the labour market more flexible we create jobs.
By upskilling our workforce, especially at the apprentice level, we create jobs.
Our policy settings ought to support individuals to seek work, matching incentives with an individual's capacity to contribute. Our actions on this front include adjustments to welfare benefits and enhancing access to important services like childcare, and parental leave. Today, this is even more critical with the ageing population in so many nations.
Taken together, all of these growth strategy measures will provide the roadmap for stronger growth. And we must have the right policies in place to make sure that strong growth translates into the employment outcomes we seek. Ultimately, we will only truly 'rebuild' our economies when we have the right policies that share the benefits of growth.
No one who wishes to or is able to contribute should be left out of the benefits of our collective actions. Opportunities for those able should be balanced with safety nets for those genuinely unable.
This is a message delivered strongly in the Labour 20 recommendations, and echoed by other engagement groups. Many of those groups, which have provided valuable input to the G20 processes, rightly stress that there is no room to perpetuate a "them and us" mentality. All interests must be heard and accorded due regard and all potential disagreements must be resolved by striking the correct balance, whether it's the claims of capital and labour, or development and the environment, or the young and the old.
No one part of our community should be allowed to operate to the disadvantage of any other part. Similarly, at the global level we seek to ensure that no one nation or block operates to the disadvantage of others. Equally, the only guarantee in a race to the bottom is that we will all end up there sooner or later.
In this context the G20 country-specific employment plans have a definitive role. The G20 employment plans comprise a suite of measures to complement the growth strategies. Measures that establish safe workplaces, that address labour market disadvantage, that ensure all citizens receive appropriate social protection, combined with the right incentives for participation, must be fully integrated and tied to the welfare of each individual as the touchstone of success.
On the eve of the Brisbane Summit, I can say that the efforts of the G20 this year have been remarkable. This weekend, every G20 member will present their growth strategies and employment plans - a comprehensive listing of their new policy actions to lift growth and create jobs. I know that the support of international organisations and engagement groups to develop these products has made them all the more robust.
Our work does not stop there. We are taking meaningful action to make our economy not only stronger, but more resilient.
We have substantially completed work in four key areas at the heart of the global financial crisis:
- building resilient financial institutions;
- addressing the challenge of banks that are regarded as 'too big to fail';
- making derivatives markets safer; and
- addressing risks in the shadow banking sector.
Progressing this ambitious agenda has not been easy, but Mark Carney, the newly reappointed Chairman of the Financial Stability Board, reported to G20 Ministers and Governors in Cairns that we are largely on track to deliver.
Our attention now turns to assessing the impact of these reforms and to being alert to emerging issues critical to the future resilience of the global economy.
We have also made considerable progress on reform of the international tax system - essential to domestic economies, global trade and to maintaining the trust of the community and business in governments.
We are making good progress on unprecedented work.
Together with the OECD, the G20 is halfway through delivering the two-year Base Erosion and Profit Shifting Action Plan. This work will help bring international tax rules into the 21st century and address circumstances where multinational companies pay little or no tax.
We have also taken significant steps to enhance transparency and minimise the opportunities for tax cheats to evade their obligations. The G20 has agreed to begin the automatic exchange of tax information, using the Common Reporting Standard, from 2017 or 2018. This will mean individuals will no longer be able to hide their offshore income from tax authorities.
These are important reforms which will significantly improve the integrity of the tax system.
May I just say on that latter point, it's not just a matter of economic equity that everyone should pay their fair share. It's a vital component in people believing and trusting in the legitimacy of their governments. Why should any citizen feel respectful or loyal to a system of government, or be a genuine participant in building a better society, if they feel that they are expected to shoulder burdens which others avoid?
This weekend represents the conclusion of an incredible year of work and achievement. The cooperation and united effort of the G20 and the unwavering focus on growth and jobs has been remarkable.
We share our achievements with engagement groups and international organisations. I speak on behalf of all G20 members when I say that your support and assistance along this journey, and in future, is vital, appreciated and valued.
We should celebrate our achievements at the end of this weekend, but recognise our work is only just beginning. Looking ahead, G20 members will hold one another to account to ensure the reforms in our growth strategies and employment plans are implemented in their entirety. It is through rolling up our sleeves, getting off the couch, or out of the ivory tower, and committing to implementation that we can ensure our communities will reap the benefits of more economic growth, more jobs and greater prosperity.
We must keep pushing each other to deliver more. Rebuilding our economies will take time and continued effort. We must not become complacent. And we should consider our actions against the broader global outlook.
This year, the G20 is providing hope and opportunity to individuals across the world. We are going to lift growth above the business-as-usual trajectory. We are going to create millions of additional jobs and improve the lives of millions.
This is my final official interaction with the L20 in my capacity as G20 president. I trust the Summit will be both productive and rewarding. As we move in to Turkey's G20 presidency, I wish you well in your endeavours and look forward to working with you in 2015 as part of the troika.
Together we can ensure that future generations will look back on us as not having failed them, but having fulfilled our responsibilities, having given work, hope, opportunity and dignity to millions.