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Australian Treasurer Wayne Swan said Monday that the global recovery remains patchy and uncertain, and the challenge facing policymakers is how to promote sustainable growth in all economies, not just shift it between countries.

Currency reform is an "important element" on the global agenda, although not the only issue, Swan said in an address at the New York Stock Exchange following weekend meetings of the International Monetary Fund and World Bank in Washington.

Australia, one of few developed economies to side-step a recession last year because of emerging economy demand for its vast natural resources, has taken a relaxed approach to the currency battles roiling markets, even as the Australian dollar tests fresh post-float highs above 99 U.S. cents.

Policymakers argue the Australian dollar's recent strength is a reflection of the country's strong economic position, in stark contrast to other developed nations still grappling with close to double-digit unemployment, high sovereign debt and an anemic private sector recovery.

The U.S., European nations and a number of emerging-market countries, meanwhile, complain that China is deliberately undervaluing its currency to aid its exporters. To compete, South Korea, Brazil and other Asian and Latin American nations have taken measures to beat down the value of their currencies, leading to fears that these efforts may presage a trade war.

"Our challenge here must be to lift growth, not just shift growth. That's why we need to work together within the Group of 20 to deliver comprehensive global economic reforms to achieve strong, sustainable and balanced growth," Swan said.

His remarks come as Chinese central bank officials at the weekend rejected calls for an international or regional currency accord and ahead of a meeting of leaders of the G-20 group of nations next month in Seoul.

Noting that the underlying global imbalances that caused the recent financial crisis still remain, the Australian treasurer called on the U.S. to abandon its role as the "consumer of last resort for the global economy".

If the global recovery is to be balanced, and sustained, developing nations need to increase their rate of growth in domestic demand, while developed countries need to increase domestic savings, Swan said.

Describing the economic re-emergence of Asia as "arguably the most significant global economic transformation" since the emergence of the U.S. as a major global economic power, Swan said Asia's rise should not be feared, or seen as supplanting Europe and the U.S., "but rather adding another engine of global economic growth".

The comments are a sign Australia's recently-returned minority Labor government is eager to shrug off some of the thorny political spats with Asia, notably China, that plagued its first term in office. Under previous Prime Minister Kevin Rudd, who was ousted in a June intraparty coup, Australia locked horns with China over foreign investment, trade and human rights issues.

"Australia's engagement with Asia has been to our advantage," said Swan, who as Treasurer also has oversight over Australia's foreign investment approvals, adding: "We're a capital-hungry country with a big investment pipeline."

China recently surpassed Japan as Australia's biggest two-way trade partner, and Chinese state-owned firms have shown a growing appetite for investment in Australia's resources sector, although the U.S. remains the number one foreign investor and third-largest trade partner.

Turning to a controversial Australian government plan to levy a new 30% tax on mining company profits, which some smaller miners in particular fear will stifle investment, Swan said this is "not borne out in the data," which show a "very strong pipeline of investment about to get underway".

The tax proposal was vigorously opposed by industry before a deal was brokered by the big three miners, BHP Billiton Ltd. (BHP.AU), Rio Tinto PLC (RIO.AU) and Xstrata PLC (XTA.LN) in early July, lowering the headline rate from 40% and excluding all minerals except iron ore and coal.

It still faces a tough battle to be passed into law ahead of its proposed July 2012 start date, however, with the minority center-left Labor government relying on independent and minor party lawmakers in both the lower and upper houses of Parliament to pass any new laws.

-By Rachel Pannett, Dow Jones Newswires; 61-2-6208-0901; rachel.pannett@dowjones.com

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