Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on the outcomes of the G20 finance ministers meeting?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member Dobell for his very important question. This morning I returned from Korea, where we have been having finance ministers meetings to prepare for the G20 leaders summit in three weeks time in Seoul. This meeting has come at a critical stage for the global economy. It was very important that the finance ministers showed a unity of purpose and achieved results, and I do believe that the meeting has achieved results. This is an important time because the global economic recovery is fragile and patchy. Because of that it is important that Australia does engage in these discussions as fully as we have been engaged in them over the last couple of years, so the G20 leaders summit meeting in three weeks time will be particularly important. Australia is not immune from what is going on in the international economy. When you have a patchy and uneven global economy, that does have implications for the Australian economy, so it was important that there was a degree of certainty and an outcome from these finance ministers meetings over the weekend.

I can tell the House that the finance ministers did agree on some fundamental reforms. In particular, we agreed on a fundamental reform of the International Monetary Fund which will be the biggest reform in the history of the International Monetary Fund. It is particularly required as we move through a period where there is a degree of uncertainty. Australia can be proud of the role that we have played over the past 18 months in seeking such fundamental reform in the IMF, along with our partners South Africa. We have played a very significant role in the reforms that are coming forward to make sure that the IMF reflects the weight of power in the global economy and that emerging economies and other economies are more represented in the global decision-making bodies, in particular in the IMF. So greater weight has been given to developed and underrepresented economies in the IMF.

The IMF has also been given some more fiscal power to deal with crises before they occur, rather than trying to mop up the mess later on. Also, countries around the table agreed to put in place a framework for strong and balanced growth. In particular, we agreed that we should be moving towards more market determined exchange rates, and that is a very important outcome for Australia. We do not want to see the competitive devaluation of currencies that we have seen in recent months. We endorsed some fundamental reforms that have come through the work of the Financial Stability Board and the Basel committee. These are very important to financial regulation of the global banking system and they do have implications for Australia. Australia has worked very hard to ensure that the decisions taken at finance ministers level, and which will be taken at leaders level in three weeks time, reflect the unique circumstances of a country like Australia, which did not suffer from the banking collapses that occurred in many other developed economies. So these are important meetings. It is important that Australia stays engaged in this way. For the first time in our history we have had a seat at the decision-making table when it comes to global economic affairs. When all of these reforms are further signed off by the G20 leaders in three weeks time, let us hope that they will continue to ensure that the global economy remains prosperous.