World economy needs kick-start
Business leaders are demanding the world’s richest nations start spending up on infrastructure and cutting red tape to help kick-start a global economy that is showing more worrying signs of sluggishness.
The B20 group of business leaders, who are attending this week’s G20 summit of finance ministers and central bankers, fear the world is in a low-growth funk that needs to be addressed by politicians.
The B20 has proposed a series of changes it believes could unleash a new wave of strong growth that would lift people out of poverty and improve the standard of living for those in the developing and developed world.
It includes freer trade, a huge lift in government-sponsored infrastructure spending, better and more streamlined regulation and a new assault on public corruption.
It estimates just a lift in infrastructure projects could create 100 million jobs and generate $6 trillion over the next 16 years.
B20 chair and Wesfarmers CEO Richard Goyder said the downgrade in growth forecasts for key economies including the United States, Japan and the Eurozone was fresh evidence of the struggle facing many nations.
He said with fiscal and monetary policies effectively exhausted in the wake of the GFC, governments had to look to business-friendly reforms to get the global economy back on track.
“Against this backdrop of slowing economic growth, with interest rates at record lows and government stimulus at capacity, we need ambitious policy reform to drive investment and jobs,” he said.
B20 member and Telstra boss David Thodey said there was about a $1 trillion a year gap between what infrastructure needed to be built around the world and what governments could finance.
This included roads, telecommunications, power, water and public transport systems.
He said while how new infrastructure was financed, either through public-private partnerships or the asset recycling program now being rolled out by the Abbott Government, was an open question the need for new infrastructure was clear.
The B20 wants governments to rollout a list of infrastructure projects that are ready to go to make it easier for business to plan and identify potential new investments.
“It’s not just the economic development and jobs that (this) will create, but also the long term community development,” he said.
Mr Goyder said the B20’s proposals to tackle corruption, and the G20’s attack on tax evasion, were supported by the business community.
“We want to compete on a level playing field,” he said.
