G20 Meeting: Economic Improvements Highlighted In Australia

On February 23, the same day Canadians watched their men soar to gold in hockey over Sweden, the G20 Finance Ministers and Central Bank governors reported ten points of great news from their meeting in Sydney, Australia.

Top three responses:

1. There are definite signs of improvement in the global economy, in particular in the United States, United Kingdom and Japan. Solid growth is also seen in China and many emerging market economies, and the Euro area is growing, too.
    
2. Despite this, there are continued challenges in achieving strong, sustainable, and balanced growth. Economic growth is still needed for full employment in many regions and “recent volatility in financial markets, high levels of public debt, continuing global imbalances and remaining vulnerabilities within some economies highlight that important challenges remain to be managed.”
    
3. To significantly raise global growth, the ministers pledged to develop policies to lift our collective GDP by more than 2 per cent above current policies over the coming 5 years. To achieve across the G20, the ministers plan to increase investment, lift employment and participation, enhance trade and promote competition, in addition to macroeconomic policies.

On the tax front, the ministers are committed to a global response to Base Erosion and Profit Shifting (BEPS) based on sound tax policy principles. This includes the principle that profits should be taxed where economic activities deriving the profits are performed and where value is created.

Expect further cross-border tax reporting as well based on an automatic exchange of tax information on a reciprocal basis. Working in tandem with financial institutions, they expect to begin to exchange information automatically on tax matters among G20 members by the end of 2015.

In 2014 the focus is on building resilient financial institutions and greater certainty in the regulatory environment to promote an integrated global financial system; ending too-big-to-fail scenarios and addressing shadow banking risks.