NO.079

12TH APEC FINANCE MINISTERS’ MEETING

The twelfth APEC Finance Ministers’ Meeting in Jeju, Korea, on 8-9 September

2005 provided an important opportunity for Finance Ministers to discuss issues

affecting the region’s economies.

At the meeting, Finance Ministers reviewed international macroeconomic developments

and concluded that global economic growth is likely to remain robust, although

high and volatile oil prices pose a more serious risk. Noting this risk, Australia

called for such steps as possible to be taken to boost production and ease the

pressure of today’s extremely high price levels. Minister’s also

agreed on the need for action in APEC economies to sustain growth and make it

more balanced between economies.

Looking to the upcoming WTO Ministerial Conference in Hong Kong SAR in December,

Ministers stressed the need for a comprehensive and substantial result in the

current Doha Development Round of the WTO.

Finance Ministers discussed the importance of capital flows for member economies

and the challenges posed by population ageing for economic growth and fiscal

sustainability. Australia’s initiatives of the Inter-Generational Report

and the establishment of the Future Fund were noted during the meeting. Ministers

emphasised the need for medium and long-term fiscal sustainability and the role

of domestic reform of markets and regulatory systems to ensure that each economy

has the flexibility to deal with the ageing challenge. International cooperation

among member economies through the sharing of knowledge and technical assistance

is essential to ensure that all economies can share in sustained prosperity.

Australia’s commitment to supporting APEC’s priorities is reflected

in our leadership of a number of initiatives. A policy dialogue will be held

in December this year as part of Australia’s initiative to raise awareness

and exchange views on key frameworks for insolvency reform. Australia is co-chairing

two new initiatives on which policy dialogues will be held in 2006: an initiative

with Indonesia to discuss how APEC members have been implementing reforms to

the financial sector; and an initiative with Indonesia and Vietnam on the management

of fiscal risks.

A Ministerial Retreat was again held at the meeting in Jeju. The retreat encouraged

interactive and broad discussion between ministers and representatives of the

business community on the risks to growth posed by high oil prices, increasing

housing prices and the ageing of the population.

Australia joined other APEC economies in congratulating the Republic of Korea

in its successful hosting of APEC this year, and looks forward to Vietnam’s

hosting in 2006.

SOUTH KOREA

9 September 2005

Contact: Amanda Kennedy

03 9650 0244