With the overall agenda of 'output growth' touted as the primary focus of this weekend's G20 meeting, businesses around the world might expect, quite rightly, that the outcomes of the G20 are likely to impact on them directly.
But what is actually likely to come out of the G20 and is it realistically going to focus on the right areas so as to assist business and industry achieve a 2% growth target?
The B20, which leads engagement with G20 governments on behalf of the international business community, and the L20, which represents the interests of workers at the G20 level, wrote a joint letter to the Prime Minister of G20 host nation Austalia, Tony Abbott, ahead of the G20 Leaders Summit presenting what they felt should be discussed this weekend.
An exert from the letter read: ‘The B20’s and L20’s unequivocal message to the G20 Leaders meeting in Brisbane urges the G20 countries to adopt ambitious plans for growth and jobs and follow this up with firm commitments for action.’
The letter then listed the groups’ common priorities including:
- ensuring that growth is strong, sustainable and inclusive
- investing in infrastructure based on responsible investment and transparency principles
- encouraging productive private and long term investment by reducing uncertainty and better aligning risk and return
- ensuring that growth plans contribute to the creation of quality jobs, by:
- increasing skill levels and matching skills to employer needs, for example through quality apprenticeship systems that benefit workers
- bringing workers into the formal labour market and eradicating forced labour
- remuneration determined by the formal labour market and that meets or exceeds legal minimums
- raising women’s participation in the labour force to close the “gender gap” in reward for talent
- implementing the G20 Employment Ministers’ Safer Workplaces initiative
- Tax should be paid where profits are earned
When reviewing the G20’s agenda priorities (anti-corruption; development; employment; energy; financial regulation; growth strategies; investment and infrastructure; reforming global institutions; tax; trade), it would appear that many of the B20/L20 areas of focus could be roughly re-shaped to fit within the G20 agenda. But will it be more of a case of a square peg and a round hole?
The largest portion of B20/L20 requests focus around skills and workforce development. Yet the only overarching G20 agenda in which that roughly fits is employment. The G20’s unenviable goal (and many think unrealistic – I heard one economist exclaim that it would be more likely that we will have a colony on Mars in five years) is to raise the level of G20 output by at least 2% above the currently projected level in the next five years. With that in mind, is skills really what political leaders will be thinking about when it comes to employment, or will it just be jobs, jobs and more jobs?
Of course as many manufacturers in the UK and around the world know, it’s not that the jobs aren’t there. The problem lies in the lack of a big enough talent pool to fill them. So will leaders be able to find answers to complex and time consuming issues like the skills shortage over a single weekend? Probably not.
But not everyone is dismissive of the G20 and its potential to make important decisions for business.
Barry Thomas, Director Asia Pacific Cook Medical and Managing Director Cook Australia, which manufactures heart stents and a host of other medical devices, is hopeful of some positive outcomes from the G20, at least for Australia.
“It’s well recognised that tax regimes play a key role in the health of a countries manufacturing sector,” said Mr Thomas.
“The G20 focus on tax evasion and base erosion has the potential to encourage robust debate on what fair and practical tax measures can help to create a level playing field between our nations. I expect to see ‘patent box’ style measures discussed in detail with Ireland looking to implement the system and the UK and Germany currently in discussion around best practice for these sorts of tax incentives.
“My view is that Australia needs to introduce an evolution of the ‘patent box’ called the Australian Innovation and Manufacturing (AIM) Incentive program which is a policy recommendation that specifically targets commercialisation of patents in Australia. This policy would help grow innovation and thereby safeguard the future of manufacturing in Australia.”
“With the private sector flagged as a key contributor to the 2 per cent G20 growth target and the newly announced Competitiveness Agenda in Australia it’s clear that the Australian government is serious about economic growth. My hope is that the struggle to balance budgets does not inadvertently inhibit potentially innovative policies that can support manufacturing.”