Check against delivery.
Thank you, to your President, Mark Birrell for that very kind introduction.
I also acknowledge your CEO Andrew McKellar,
It’s great to be back in Melbourne and it’s great to see so many familiar faces in the room – too many of you to mention you all individually –
But please let me warmly welcome and acknowledge my good friend and former OECD Council colleague Whitney Baird, who now provides important and significant leadership as the President of the US Council for International Business.
Distinguished guests, friends all,
Thank you for the invitation to join you today at this Australian Chamber of Commerce and Industry General Council Meeting,
To share the view from the OECD on the current economic and geopolitical landscape and what it means for Australia.
This Chamber has been a consistent, strong and highly valued voice for Australian business – here in Australia and internationally.
Indeed, internationally, ACCI has been actively engaged in OECD work for more than half a century through Business at OECD, bringing unique insights and supporting our global engagement, in particular across Southeast Asia.
After a period of remarkable global economic resilience despite a series of major shocks, your General Council meeting today is taking place against the backdrop of a more challenging global economic outlook.
Indeed, despite a series of external shocks, from COVID to the impacts of Russia’s war of aggression against Ukraine, the energy crisis and the period of high inflation that followed, rising geopolitical tensions and more, the global economy to the end of 2024 continued to grow at a comparatively healthy rate of above three percent.
And while we started this year more strongly than anticipated the global economic outlook has become significantly more challenging in recent months.
High policy uncertainty, geopolitical tensions, increased barriers to trade causing increases in costs, tighter financial conditions, weakening business and consumer confidence, are all weighing on global investment and growth prospects.
Our latest Economic Outlook published in June projects global growth of 2.9% for both 2025 and 2026.
This is a downward revision of 0.4 percentage points for both years – compared to our Economic Outlook back in December 2024.
For Australia as a globally focussed export-oriented trading economy, what happens in the global economy matters.
This works both ways. Australia has benefited from the strong growth, in particular across Southeast Asia in recent decades, but current headwinds in the global economy also have an inevitable impact.
So for Australia, we project GDP to grow by 1.8% this year and by 2.2% next year, slightly below our December 2024 projections [of 1.9% in 2025 and 2.5% in 2026],
Mainly due to slowing export demand, falling commodity prices and growing trade uncertainty.1
We also expect inflation in OECD and G20 economies over this year and next to decline more slowly and remain higher for longer than previously anticipated.
And all of that against the background of continued structural challenges and transformations:
- Low productivity growth,
- The economic, social and fiscal impacts of population ageing,
- The need to tackle the challenges and opportunities associated with climate change in a globally more coherent and effective way,
- The need to seize all the many exciting benefits of the digital transformation and AI, while better managing some of the associated risks and disruptions,
- And the need to make our global rules-based trading system fairer and function better – to tackle unfair trade practices and boost economic security and supply chain resilience in a way that helps us preserve the well-established economic benefits of open markets and rules based global trade.
Open, results-focussed dialogue and improved international co-operation, with a commitment to restore increased levels of policy certainty and stability will be key to addressing many of these challenges and unlocking stronger, more resilient growth.
This includes fostering open markets and rules based global trade, which has been a powerful driver of growth, employment and higher incomes and living standards.
However there has been a loss of faith in the ability of our global trading system to discipline or prevent the increased incidence over recent decades of non-market driven trade distortions.
These distortions – and their economic and social impacts – are reshaping the global economy and draining public support for open markets.
This is also one of the developments driving alternative policy approaches to global trade – which if they ultimately prevail and persist over time, will put at risk some of the well-established economic benefits of open markets and rules-based trade, namely increased competition, innovation, productivity growth, efficiency – and the stronger growth, jobs, higher incomes, lower costs and ultimately higher living standards they helps generate.
Indeed, all other things being equal, well-functioning open global markets mean better living standards.
The challenge for all economies is to rebuild trust in open markets and rules-based trade.
Which means that we need to return to the mission of building a fairer global trading system built on the principle of a level playing field.
Our strong advice to all Governments, in particular market-based democracies, is to work together, bilaterally and multilaterally, to find the best possible ways to make our international trading arrangements fairer and function better, in a way that preserves the economic benefits of open markets and rules based global trade.
Australia is a powerful example of these benefits.
With close to a quarter of its GDP depending on exports2 , trade has been an important channel to turn Australia’s natural resources and enterprise into greater prosperity and higher living standards for Australians.
One of the few silver linings of the current global debate on tariffs is the increased recognition that tariffs impose most costs on the nation that introduces or raises them.
In this respect, Australia has set a fine example to others by eliminating tariffs not raising them. The Australian Government abolished around 500 tariffs last year, and just last week announced plans to abolish around 500 more.
These moves are good for Australian consumers, business and the economy more generally. They also send a powerful signal to the rest of the world on Australia’s continued support for open markets and rules-based trade.
The OECD provides unique evidence and data to help preserve these benefits and enable a better coordinated response to concerns about trading distortions and resilience.
Indeed, promoting the sustainable expansion of global trade on a multilateral, non-discriminatory basis and in accordance with international obligations is a core principle enshrined in our Founding Convention.
For example, our OECD Manufacturing Groups and Industrial Corporations (MAGIC) database helps to improve transparency and inform an evidence-based response to trade distortions by providing data on subsidies for 482 large manufacturing firms operating in 14 different sectors, including aluminium, steel and semiconductors from 2005-2022.
That is the first independent and global scale effort to measure the impact of market distorting subsidies in the manufacturing sector.
To date, the MAGIC database has identified two unmistakable trends.
First, China is the largest and most pervasive provider of industrial subsidies in the world.
The data shows that about 80% of large manufacturing and industrial firms, which have received large subsidies – that is large manufacturing or industrial firms which have received subsidies representing more than 15% of their revenue – are based in China.
This includes firms across the semiconductor, aluminium, glass and cement industries.
Separate OECD work has shown that steel firms in China, on average, receive ten times the level of support provided to their OECD competitors.
Second, the data shows that these subsidies have enabled Chinese firms to make significant gains in global market share at the expense of OECD-based firms, especially in solar photovoltaic cells, semiconductors, shipbuilding and steel.
The impacts of this loss of market share have been felt around the world, including in Australia.
There is no easy solution to these market distortions, but the essential first step is to understand the scale of the problem and to engage in data driven, evidence-based conversations in support of reforms to help deliver a better, fairer rules based global trading environment.
We also provide evidence on product market regulation, services trade restrictiveness, trade facilitation practices, and much more to identify ways to lift counterproductive barriers to trade which impose costs on consumers and businesses, and ultimately hold back growth and innovation.
Beyond trade, the OECD’s core mission is to foster international co-operation across the full range of economic, social and environmental policy, helping governments to advance their reform agendas on the foundation of evidence-based international best practice and peer learning.
In the context of current global economic challenges, it is even more important for trade exposed economies, like Australia, to ensure that domestic policy settings facilitate optimal international competitiveness and resilience.
Some of our key priorities of particular relevance to Australia include:
First, on reviving productivity growth.
Productivity is all about improving people’s living standards:
For workers, higher productivity means higher real wages;
For businesses, it means increased outputs and stronger growth;
And for consumers, it means more, better and more competitively priced goods and services.
Yet, productivity growth has been declining for decades across the OECD and here in Australia.
In fact, labour productivity growth in Australia has been below the comparatively low OECD average for more than a decade.
In Australia, productivity growth in the decade before the pandemic averaged 1.1% per year – about half the rate of the 1990s and the slowest in the past 60 years.3
While growth has been slow, the actual level of labour productivity in Australia (at USD 68 per hour) remains slightly above the OECD average (at USD 62 per hour) but well below the levels of the United States (at USD 84 per hour) and below the Euro area and the UK (at USD 73 and USD 72 per hour).
And Australia’s labour productivity at USD 68 per hour has not shifted much over this past decade or so.
So let me focus on some policy areas which would help to reinvigorate productivity growth in Australia.
First, domestic policy measures to boost business dynamism and competition.
Cutting red tape, reducing regulatory fragmentation and streamlining regulation at all levels of government is key.
The OECD Product Market Regulation Indicators show that the administrative burden imposed on businesses in Australia is higher than in most OECD countries.
It could be streamlined through simpler licensing systems, for instance in regulated occupations where increased labour mobility across Australia could help boost productivity.4
The potential gains from regulatory reform are large. For example, our data shows that productivity is 50% higher in those countries with the most competition-friendly regulatory settings, compared to those with the least competition-friendly regulatory arrangements.
Australia’s overall ranking in terms of Product Market Regulation indicators is 24th out of 43 countries whose data we capture – so in the lower middle range.
However, the same indicators also show that the administrative burden imposed on business in Australia is higher than in most OECD countries. Australia ranks 37th out of 43 countries covered on Administrative and Regulatory Burden and 39th out of 43 in relation to the competition-friendliness of licensing and permitting arrangements – indicating that there is considerable room for productivity-growth enhancing simplification.
What is the potential economic dividend of this kind of reform? Based on our data, reducing regulatory barriers to competition – including for foreign investment – in services, energy, transport and e-communication sectors to the levels in the five top-performing OECD countries would increase per capita GDP in G20 advanced economies by 0.8% over five years.
Our specific assessment for Australia on the basis of our OECD Long-Term Model suggests that significant reforms to simplify and streamline relevant administrative processes and licensing and permit arrangements in line with international best practice, could lead to Australia’s GDP being 1.4% higher by 2035.
Complementary to these kinds of broader regulatory reforms is the need to do more to further revitalise Australia’s National Competition Policy settings.
This work, some of which is already underway, includes enhancing the interoperability across state and territory level regulations.
There are also opportunities to harmonise domestic regulations with international standards and to further strengthen competition laws against anticompetitive practices.
Competition policy reform should also focus on enhancing the allocation of resources by promoting skills and labour mobility, including by reforming occupational licenses and easing housing and planning bottlenecks.
Aside from competition policy, there also are other policy measures that could improve economic dynamism, including encouraging increased investment through a more growth-friendly and internationally competitive tax system, and pursuing policy reforms to boost workforce participation, in particular of older workers.
Next, no economy can afford to ignore the fact that productivity growth is set to be shaped by new advances in AI, particularly generative AI, that offers promising avenues to boost innovation.
Our latest evidence shows that AI adoption by G7 countries can increase aggregate labour productivity growth by between 0.4 and 1.3 percentage points annually in countries with favourable conditions for adoption such as the US and the UK.
We are working to expand these estimates to other countries later this year, including for Australia.
And while it is true that productivity gains can differ across economies – reflecting both the pace of AI adoption and differences in economic composition – even in economies with lower shares of AI adoption and larger manufacturing industries which are less impacted by AI, productivity growth could rise between 0.2 and 0.8 percentage points annually.5
Australian businesses are already embracing this transformation, with 40% of businesses reporting using AI last year. However, the same proportion – 40% – have yet to consider AI adoption at all.6
Australia needs to further boost adoption by encouraging competitive AI ecosystems that offer quality services at affordable prices.
And we need more investment in skills and human capital to empower workers through training, improved AI literacy, and support for lifelong learning – to ensure all can have the best possible opportunity to participate and benefit from the opportunities the accelerating digital transformation and AI can offer.
Importantly, Australia needs to take steps to protect competition in the context of rapidly developing digital markets and AI. The EU, the UK and other OECD countries have introduced laws aimed at addressing some of the risks to effective competition in digital markets, something Australia still has to tackle.
The five-year in-depth analysis completed by the Australian Competition and Consumer Commission provides some solid recommendations for targeted regulation of digital platform services designed to protect and enhance competition and innovation while protecting consumers in digital markets.
Second, Australia and like-minded economies around the world need to seize the opportunities, as countries around the world look to boost the resilience in mineral supply chains.
As we scale up the digital and green transformation of our economies, we also become more dependent on supplies of critical raw materials.
Global supplies of these minerals are highly concentrated: in 2022, the top three producing countries accounted for between 65% and 92% of global production of several minerals such as nickel [65%], cobalt [78%], rare earth elements [90%], and lithium [92%].7
And export restrictions on critical raw materials are on the rise, having increased more than fivefold since 2009.8
In parallel, global demand for these minerals is set to quadruple over the next two decades.9
Australia will play an important role in meeting this demand, and there are a range of new opportunities to be seized, including further developing midstream refining and processing capacity, which is relatively concentrated in global supply chains, by:10
- Unlocking new infrastructure investment to better connect production hubs to domestic and global markets;11
- Investing in upskilling and training to enable specialisation and foster new employment opportunities; and12
- Strengthening engagement and partnership with mining communities, including Aboriginal communities, to ensure everyone has the best possible opportunity to benefit from new investments.
Third, we need to continue to advance global tax co-operation,
This provides businesses right across the OECD and beyond with the policy certainty they need to invest and compete,
It also helps ensure stability, by addressing the tax challenges that arise from cross-border business and digitalisation, while alleviating the need for counterproductive unilateral measures,
And it prevents double taxation as well as wasteful administrative costs for businesses and governments.
The OECD has a long history of advancing effective international tax co-operation.13
And Australia has been actively engaged in this work, helping lead initiatives on sharing information on tax evasion and fraud14 and supporting a number of capacity building programmes in developing countries.
Most recently, there has been important progress on the Two Pillar Solution, including the Global Minimum Tax, with 67 jurisdictions around the world having already enacted or taken concrete steps towards enacting implementing legislation.
I know we will be discussing this further after my remarks, but I will just highlight that, in June, G7 countries adopted a proposal on the way forward for the operation of global minimum tax arrangements between the United States’ global minimum tax arrangements [the GILTI framework – or Global Intangible Low-Taxed Income] framework and the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, for consideration by all Inclusive Framework Members.
The OECD Secretariat will continue supporting Inclusive Framework Members in these discussionsto build a fair and sustainable consensus, to preserve the gains that have been made and ultimately to secure certainty and stability on a lasting, mutually beneficial deal which will be good for growth and opportunity around the world moving forward.
Fourth, we need to continue to broaden the reach of shared standards and platforms for dialogue.
The OECD has a comprehensive global relations strategy to promote the adoption of OECD standards and best practices globally, for instance, through our regional programme for Southeast Asia that Australia co-chaired [with Viet Nam] in the past three years.
There also continues to be strong interest from key countries around the world to join the OECD and hence to commit themselves to alignment with our standards and best practices.
Last year, the OECD Council made the historic decision to commence accession discussions with Indonesia and Thailand.
This means the biggest and second biggest economies in Southeast Asia, the most dynamic growth region of the world, are now engaged in a process of alignment with OECD standards and best practices as a means to anchor their reform agenda towards becoming advanced economies.
Indonesia and Thailand are joining Argentina, Brazil and Peru from Latin America and Bulgaria, Croatia and Romania as European Union countries as current accession candidate countries.
Once admitted, these countries will add an extra $US 5.5 trillion in economic weight to the OECD family.
These efforts bring important benefits for businesses through improved regulatory environments, new opportunities for trade and investment, and stronger standards from responsible business conduct to anti-bribery and competition.
In closing,
We are navigating a challenging environment of lower global growth and greater policy uncertainty,
But at the OECD, we continue to see a very strong commitment among countries to coming together, discussing issues, and identifying productive ways forward.
We will continue to provide the evidence base and the platforms for dialogue needed to make this happen – and indeed business inputs and perspectives are an important part of this, so we encourage you to continue engaging actively through this Chamber and Business at OECD.
Policymakers have the tools to reinvigorate economic growth, and make progress on our shared challenges, from making trade work better, to adapting to population aging, to optimising the green and digital transformations of our economies and societies.
Our purpose at the OECD is to help design and implement these tools, and ultimately support better policies for better lives.
I look forward to the discussion today.
Thank you.
1 The export price index (measuring changes in prices of Australia’s exports) fell by 4.5% in Q2 2025 and 3.3% through the year, driven by metalliferous ores and metal scrap (-9.0%) due to international trade uncertainty and ongoing weakness in the Chinese property sector. Source: ABS July 2025: International Trade Price Indexes, Australia, June 2025 | Australian Bureau of Statistics
2 Exports of goods and services accounted for 24.7% of Australia’s GDP in 2024 (up from 20.1% in 2015 and 18.2% in 2005). Source: Exports of goods and services (% of GDP) - Australia | Data
3 Productivity Commission, 5-year Productivity Inquiry: Advancing Prosperity, vol 1, February 2023, p.1, available here.
4 Australia ranks 37 out of 43 countries covered on Administrative and Regulatory Burden and 39 out of 43 on less competition friendly regulations for licenses and permits. Source: Australia_PMR country note.pdf and the 2023 OECD Economic Survey of Australia. In May 2025, the Productivity Commission announced that it will study potential reforms on occupational licenses, including harmonizing regulated standards across Australia. See: Call for submissions - National Competition Policy analysis 2025.
5 Ibid. These figures are for Japan and Italy.
6 Data for Q4 of 2024 based on a survey of 400 Australian SMEs. This is a new survey that started in Q3 of 2024. 40% of surveyed SMEs report adopting AI (5% more than in Q3). Source: AI adoption in Australian businesses for 2024 Q4 | Department of Industry Science and Resources
7 For instance, for nickel: India, Philippines, Russia. For cobalt: Democratic Republic of Congo, India and Russia. For rare earths: China, USA, and Australia. For lithium: Australia, Chile, Turkiye. Source: OECD Supply Chain Resilience Review (EN)
8 OECD (2023) Raw Materials Critical for the Green Transition: Production, International Trade and Export Restrictions and IEA (2021), The Role of Critical Minerals in Clean Energy Transitions
9 OECD (2023) Raw Materials Critical for the Green Transition: Production, International Trade and Export Restrictions and IEA (2021), The Role of Critical Minerals in Clean Energy Transitions
10 CSIRO, From minerals to materials: Assessment of Australia’s critical mineral mid-stream processing capabilities, May 2024, From minerals to materials: an assessment of Australia's critical minerals mid-stream processing capabilities - CSIRO. Parliament of Australia, Critical Minerals in Australia, 15 July 2025.
11 Australia Critical Mineral Strategy 2023-2030: Critical Minerals Strategy 2023–2030.
12 Ibid.
13 For example, over the past decade, the OECD has advanced initiatives on automatic exchange of information for tax purposes that have effectively put an end to bank secrecy. We have also modernised the international tax architecture under the Base Erosion and Profit Shifting initiative to address tax avoidance strategies that exploit gaps and mismatches in tax rules.
14 Australian Taxation Office (ATO) leads the OECD Forum on Tax Administration’s Joint International Taskforce for Shared Intelligence and Cooperation (JITSIC).
Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world.