G20 leaders will endorse a strategy to boost global growth and tackle tax avoidance, but climate change and geopolitical tensions threaten to dominate the summit.
Prime Minister Tony Abbott will release on Sunday a set of plans drawn up by each G20 member country which in total will boost global growth by 2.1 per cent to 2018 – exceeding the initial target set by the Australian G20 presidency.
With Europe’s economic recovery faltering, the plans – which will face domestic political challenges – could inject $US2.1 trillion ($A2.3 trillion) into world growth and create millions of jobs.
The leaders will also endorse initiatives to strengthen the banking system, make the derivatives markets safer and address systemic risks arising from banks considered too big to fail.
The OECD’s plans to deal with base erosion and profit shifting by multi-national corporations by the end of 2015 will also be backed, as will greater transparency to crack down on tax cheats.
However, last-minute doubt remains over changes to certain intellectual property regimes, or “patent boxes”, to ensure that they are not inappropriately used for tax avoidance.
A global hub to swap information on how best to drive investment in infrastructure will be supported.
However, the economic message was swamped on the opening day of the Brisbane summit by the issues of climate change, China-US relations and concern over Russia’s Ukraine campaign.
European Council President Herman Van Rompuy said tensions on borders in Europe’s east were “hampering a regain of confidence”.
“Russia must stop the inflow of weapons and troops from its territory into Ukraine and Russia must withdraw those already present,” he said, adding more trade sanctions could be imposed if swift action was not taken.
Russian President Vladimir Putin faces questioning from his EU colleagues about his country’s support for separatists, as the crisis in Ukraine continues to escalate.
US President Barack Obama, who delivered a speech on America’s leadership in the Pacific, labelled the Ukraine tensions a “threat to the world” and empathised with Australia, which lost 38 people in the MH17 disaster.
“We share the determination with your nation for justice and accountability,” Mr Obama said.
The American leader also used his speech to unveil a $A3.25 billion contribution to the United Nations’ Green Climate Fund – putting pressure on other G20 members such as Australia to also act.
UN Secretary-General Ban Ki-moon said the “quality” of economic growth to be pursued by the G20, including its fairness and impact on the climate, was just as important as the quantity of jobs and wealth created.
“We must pursue an agenda that advances sustainability, addresses inequalities and generates decent jobs, especially for young people,” he said.
The US President also took a veiled swipe at China, saying the US remained a Pacific power and would not tolerate “coercion or intimidation … where big nations bully the small, but on alliances for mutual security”.
Mr Obama, Japanese Prime Minister Shinzo Abe and Mr Abbott will meet for trilateral talks on boosting defence ties and trade on Sunday.