G20 action needed, not just planning: Swan

EDS: Not for use before 0001 AEST on Tuesday, November 6.

By Colin Brinsden, AAP Economics Correspondent

CANBERRA, Nov 6 AAP - Treasurer Wayne Swan says the Group of 20 major economies have spent too much time on discussing crisis management and not enough on action to lift growth four years on from the depths of the global financial crisis.

In an address to the G20 Finance Ministers' meeting in Mexico City on Monday, Mr Swan said actions by central banks have helped to stabilise markets and opened the window for governments to undertake decisive reforms to reduce the risk of falling back into crisis.

"But without political action, the markets will slam it closed, as we have all seen too many times before," Mr Swan said, according to a copy of his speech obtained by AAP.

He said it was disappointing that the group was still crisis managing.

"The few of us still here who sat around the G20 in the darkest days of 2008 could not have predicted that more than four years later we would be here still talking about stability mechanisms and further unconventional action by central banks," he said.

"We have spent far too much time in the subsequent four years discussing how to deal with the risks to growth and not enough time taking action to lift growth."

He said whoever won this week's US presidential election must deal urgently with the so-called "fiscal cliff" - the end of tax cuts and the adoption of severe spending cuts at the turn of the year - or risk seeing the US economy plunge back into recession.

He said it was also important that China's new leadership after this week's 18th national congress continued to deliver reforms to shift the Chinese economy towards consumption-led growth.

Mr Swan noted European policymakers were constrained by having to address significant levels of debt over the medium to long term, so they need to develop credible and effective fiscal pathways.

The US and Japan also needed credible long-term fiscal plans to address their very high debt levels, he said.

"To maintain market confidence and to support jobs growth, you need to demonstrate policies are in place which will deal with long-term fiscal pressures," he said.

"You don't need to slash and burn now to deliver sound fiscal outcomes in the medium term. Structural saves start small but grow over time, helping to deliver credible and sustainable fiscal policy."

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