While the G20 has its origins in the wake of the Asian financial crisis in the late 1990s, it was the financial crisis of 2008 that gave the grouping its true stature, as a vehicle for concerted global action to address the massive impact of the collapse in financial markets. It also reflected the unavoidable reality that global economic might was shifting to Asia, away from Europe and its low-growth economies.
Since then, however, the group has struggled to achieve relevance. Its proposed aim for a 2% global growth target achieved through both stimulus and effective structural reform is laudable, but unlikely to lead to any direct real-world outcomes, particularly as the eurozone remains mired in an extended, and highly damaging, period of stagnation exacerbated by Germany’s refusal to countenance more monetary stimulus and the essential manufactured nature of the euro.
Of greater importance will be any momentum the meeting can impart to the international challenge of eliminating tax havens and curbing the capacity of the world’s biggest companies — from tech giants like Apple, Google and Amazon to media companies like 21st Century Fox and mining giants like Glencore — to profit shift to low-tax jurisdictions. Treasurer Joe Hockey has talked tough on tax, but we’re yet to see the evidence that the government is prepared to take on global giants in a concerted campaign to end what is called “tax avoidance” but is better described as legalised forms of tax evasion.
Beyond that, the G20 is unlikely to yield anything of concrete benefit for Australians. Even so, gathering the leaders of the world’s biggest economies in one place is always good, as it provides opportunities for the kind of personal dialogue that might be damned as a “talkfest”, but which never hurt international relations, especially at a time of renewed conflict and tension.