Why not? People could say anything to each-other in private - shouldn't the authorities have a way of finding out what was said, when needed? How does the medium of communication change things?
No, the name of the G7 document is "Combating the use of the internet for terrorist and violent extremist purposes". Scanning the PDF, there doesn't appear to be any discussion about microphones placed in vehicles or residences.
Encryption keeps communication private, talking to someone directly keeps communication private. The analogy is extremely simple, it seems like you are intentionally trying to ignore it.
Do you think the government should be able to listen and see all of your communication?