Australian business leaders have called on international governments to boost their infrastructure spending and unlock $US57 trillion of funding over the next two decades, as finance ministers and central bankers descend in Sydney for the annual G20 meetings.
Telstra's chief executive David Thodey, who is co-chair of the infrastructure and investment taskforce of the B20 business advisory arm of the global economic body, said today there was "no lack of money" for global infrastructure investment if projects were well-planned and have regulatory certainty.
"If we want to take the opportunity, we've got to give [investors] the right environment to invest," Mr Thodey said at a media briefing.
The federal government has placed infrastructure at the centre of its local growth agenda, with Tony Abbott saying last year that he wanted to be the "infrastructure prime minister". Federal Treasurer Joe Hockey also pledged this week to bring the "NSW model" of new infrastructure development to the G20 forum this weekend.
About $US57 trillion is needed to fund infrastructure projects around the world until 2030 - about $US1 trillion a year, the B20 said, citing a McKinsey report last year.
About $US17 trillion could be invested in roads, $US5 trillion in rail, $US1 trillion in ports, $US2 trillion in airports, $US12 trillion in power, $US12 trillion in water and $US10 trillion in telecommunications, the report estimated.
The projects could boost the global GDP growth by 3 to 4 per cent and improve people's standards of living, Mr Thodey added.
Why the hold-up in infrastructure investment?
He said the key question for the taskforce was why money was not flowing into potential projects, and what international minimal standards could be drawn up to encourage cashed-up investors such as sovereign wealth funds to commit to developments.
"We are trying to get real clarity around those issues and come up with something that is really practical, and that governments can buy into and we can work on," Mr Thodey said.
Mr Thodey said one of the critical issues at stake was the difference between the length of an infrastructure project, which could extend beyond a decade, and the three-to-four-year demands of a political cycle.
"[It's about] how to get greater regulatory certainty outside the political cycle," he said.
Mr Thodey acknowledged the difficulties of coordinating infrastructure investment standards among 20 countries, but said that was no reason to "stand back from it" and the taskforce would seek to "move the ball forward just a little bit".
"I'm not saying there's a simple answer here for every country ... but we are committed to putting our best foot forward."
Fears of unilateral action replacing international co-operation
The push for a focus on growth and infrastructure development at the G20 came amid rising concerns that the international co-operation seen following the financial crisis was being replaced by unilateral actions.
The G20 was ramped up to a leaders' forum after the financial crisis sent shockwaves around the global economy.
While the forum of rich and developing nations has had significant successes since then, such as the establishment of the Financial Stability Board (FSB), "there's a feeling in recent years that it's wandered a bit", former federal treasurer Wayne Swan said on the sidelines of the International Finance conference.
"You really do need to consider what are the steps you need to take to lift global growth realistically and to get to the debate going about what we need to be doing," Mr Swan said.
"I don't think there's been enough concentration in that area, so I'm pleased to hear Mr Hockey say they are going to talk about a growth agenda."
Mr Swan said developed governments have been too reliant on their monetary policies in recent years.
"One problem as it was put to me was it was like a duck trying to fly with one wing. Fiscal policy has not been playing its role," Mr Swan said.
"And what the government was hopefully talking about ... was a new emphasis on those policies that would lift the capacity of the global economy to grow."