5 x 5 will help families thrive AUSTRALIAN workers transfer $4.5 billion annually to help family members who live in developing countries across Asia and the Pacific. These remittances are a critical source of income in places where food is scarce, lighting a luxury and access to good healthcare and education limited by poverty. But too much of the money sent by Australians is not reaching the people in need because it is unfairly diminished by high fees. This needs to be addressed under Australia's leadership during next year's G20 summit in Brisbane. In Australia, the market for remittances is dominated by large, well-entrenched providers, such as money transfer operators Western Union and MoneyGram and major commercial banks, which generally charge 10 per cent or more for international money transactions. This exceeds the cost of remittances in other regions such as Southeast and Central Asia and is double the target endorsed by the G20. Remittance costs in Australia have halved across the past six years. As much as a quarter of every Australian dollar used to be lost in transmission costs. Several important initiatives have been launched and are progressing with the support of aid agencies in Australia and New Zealand, as well as the World Bank. Changes in regulations, regulatory practices and attitudes across the Pacific have led to cheaper products from the major banks, and costs have been reduced further thanks to the entry of competitive online suppliers. Transparency about costs has improved thanks to the introduction of a website - sendmoneypacific.org - and a Facebook page comparing the various services offered by remittance providers. But charges of 10 per cent and more are still unacceptable. In 2009, the G8 established a worldwide goal of reducing the average cost of remitting money to 5 per cent in the following five years, a goal that became known as "the 5 x 5 objective." The G20, with its broader representation, added that task to its agenda in 2011. Australia assumes the G20 presidency in the final year before the 5 x 5 objective's targeted completion date and working towards the 5 x 5 goal should be a top priority for its G20 agenda. Let's be clear: remittances are as important as, in some cases more important than, aid money in the Asia-Pacific region. In the Pacific alone, at least $500 million a year is sent to people whose family members are working in Australia, New Zealand and the US. It's a sum that is at least as important as the direct government aid channelled into the Pacific from those countries. In small countries such as Samoa and Tonga, remittances constitute as much as 25 per cent to 35 per cent of gross domestic product. The flow of remittances allows families in developing countries to live with a degree of self-sufficiency rather than face a lifetime of uncertainty and struggle. The extra money can help people gain access to basic services such as electricity, healthcare and education that dramatically improve their lives. Most often, though, money from remittances is needed simply to help put food on the table in countries where families are large and money is scarce. By championing the completion of the 5 x 5 agenda, Australia has the opportunity to use its stature in the G20 presidency to strengthen neighbouring economies while making sure migrant Australians' hard-earned money is spent supporting extended family rather than on needlessly high fees. Australia needs to lead the way by ensuring that competition in the remittance market is open, vigorous and innovative. We must remember that each dollar of reductions in the cost of remitting translates directly into a dollar in the hands of families who are seeking nothing more than to look after themselves and live with dignity. Don Abel is a senior adviser to the World Bank Group and a former assistant governor of the Reserve Bank of New Zealand.