Australia’s economy has enjoyed considerable success in recent decades, gross domestic product per capita is high and the country generally ranks favourably in well-being
This review particularly recommends shifting away from income taxation to indirect taxation, for instance by raising more revenue from the Goods and Services Tax.
The government’s current review of the federal system, focusing on both spending and tax responsibilities, is welcome, as is the “whole of government” approach to the process.
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This country note from Going for Growth 2015 for Australia identifies and assesses progress made on key reforms to boost long-term growth, improve competitiveness and productivity and create jobs.
Australia has recently seen a slowdown in growth, with declining resource-sector investment, weak commodity prices and hesitant investment elsewhere in the economy, although the exchange-rate depreciation is helping the economy to adjust.
Australia has weathered the global economic crisis relatively well and enjoyed robust growth in per capita income, fostered by favourable terms of trade and high employment rates. However, productivity gains have slowed in recent years and the level remains below that of leading OECD countries.
Australia’s productivity growth has decelerated markedly around the turn of the century. Part of the decline is probably temporary, but raising multifactor productivity is key to ensure that living standards continue to grow strongly, especially if the currently strong terms of trade weaken over time.
The Australian economy is robust and faces a solid short-term outlook, but it must continue adapting to ensure that its privileged place in the Asia-Pacific region contributes to long-term sustainable growth, according to the OECD’s latest Economic Survey of Australia.
Country Notes from OECD Economic Policy Reforms: Going for growth 2011 presenting OECD recommendations for structural reform priorities for individual countries.
Australia faces the mutually reinforced challenges of boosting labour supply and promoting social inclusion. Labour underutilisation is especially prevalent among groups such as lone parents, people with disability, and Indigenous Australians.