OECD ECONOMIC SURVEY OF
AUSTRALIA
Achieving sustainable economic growth 26 OCTOBER 2023 oe.cd/AUSTRALIA
@OECDeconomy @OECD
The economy is slowing after a rapid recovery Real GDP growth (year-on-year)
% 12 10 8 6 4 2 0 -2 -4 -6 -8 Mar-19
Dec-19
Source: OECD Economic Outlook Database.
Sep-20
Jun-21
Mar-22
Dec-22
Sep-23
Jun-24
Mar-25
Dec-25
Inflation has peaked but remains high %
Headline inflation (year-on-year)
12 Australia
10
United States
Euro area
OECD
8 6 4 2 0 -2
2015
2016
2017
Source: Australian Bureau of Statistics, OECD Statistics Database.
2018
2019
2020
2021
2022
2023
A restrictive monetary policy stance remains appropriate Official policy rates
% 7
Australia
6
United States
Euro area
5 4 3 2 1 0
2022
2022
Source: Reserve Bank of Australia.
2022
2022
2022
2022
2023
2023
2023
2023
2023
Growth is projected to slow further, bringing inflation back down 2022
2023
2024
2025
Real GDP growth, %
3.7
1.8
1.3
1.8
Consumer price index, % change
6.6
5.5
3.3
2.8
Core inflation, %
5.9
5.9
3.3
2.8
Annual growth rates
Source: OECD.
Addressing fiscal challenges
Continue efforts to narrow the fiscal deficit given significant future cost pressures Federal government fiscal balance
% of GDP 1 0 -1 -2 -3 -4 -5 -6 -7 -8
2013
2015
Source: Commonwealth of Australia.
2017
2019
2021
2023
2025
2027
2029
2031
2033
There is scope to broaden the base of the Goods and Services Tax Ratio of Goods and Services Tax collected to revenue if it was applied to all consumption at standard rate
Ratio 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2
Note: Data are for 2020 in all countries other than Türkiye (2019). Source: OECD Consumption Tax Trends database.
TUR
COL
MEX
GRC
ITA
ESP
GBR
CRI
IRL
BEL
ISL
CAN
PRT
FRA
SVK
POL
AUS
LTU
SVN
OECD
DEU
FIN
NLD
AUT
HUN
CZE
SWE
LVA
CHL
ISR
DNK
CHE
KOR
JPN
EST
LUX
0.0
NZL
0.1
Greater emphasis on preventive care would reduce high hospitalisation rates Preventive care expenditure as a share of current health expenditure
% 14 12 10 8 6 4
Note: Data are for 2022 or latest available year. Source: OECD Health Expenditure and Financing Dataset.
ISR
CRI
SVK
COL
POL
NOR
CHE
MEX
BEL
PRT
AUS
JPN
ISL
CHL
ESP
GRC
LUX
FIN
USA
SWE
DNK
LVA
SVN
FRA
LTU
IRL
CAN
DEU
ITA
HUN
KOR
CZE
EST
NLD
AUT
0
GBR
2
Raising productivity
GDP per capita growth should be revived GDP per capita growth, average rate
% 3.0
Australia
OECD
2.5 2.0 1.5 1.0 0.5 0.0
1996-2000
2001-2005
Source: OECD Growth in GDP per capita, productivity and ULC Dataset.
2006-2010
2011-2015
2016-2021
School reforms would boost economic prospects Score in the Programme for International Student Assessment, by competency
Mean score 550 540 530 520 510 500 490 480 470 460
Australia science
OECD top 5 science
Australia mathematics
OECD top 5 mathematics
Australia reading
OECD top 5 reading
2000
2003
Source: OECD Growth in GDP per capita, productivity and ULC Dataset.
2006
2009
2012
2015
2018
Reforms to licensing and regulatory systems would improve the business environment Product Market Regulation Indicators
Index 3.0
Australia
OECD
OECD - Top 5
2.5 2.0
Increasing regulatory burden
1.5 1.0 0.5 0.0
Assessment of impact on competition
Interaction with interest groups
Complexity of regulatory procedures
Simplification and evaluation of regulations Note: Data are for the most recent vintage in 2018. Source: OECD.
Admin. requirements for limited liability companies and personally-owned enterprises
Licenses and permits
Administrative burden on start-ups
Improving gender equality
The gender gap in labour income has declined but remains significant Decomposition of gender gap (men-women) in labour income
% 60
Employment gap
Hours gap
Hourly wage gap
50
40
30
20
10
0
2001
2003
2005
2007
2009
Source: Household Income and Labour Dynamics in Australia Survey, OECD calculations.
2011
2013
2015
2017
2019
2021
Slower benefit withdrawal would reduce work disincentives for some women Effective tax rate on increasing working hours
% 80 70
Australia
60
OECD
50 40 30 20 10 0
Second earner parent
Second earner non-parent
Minimum wage
Single parent
Second earner parent
Second earner non-parent
Single parent
67% of average wage
Second earner parent
Second earner non-parent
Single parent
Average wage
Note: Tax rates are for different wage rates and an individual with two children increasing work hours from 50% to 100%. For the couple, the partner is assumed to earn the average wage. The calculations include social assistance benefits and housing benefits. This calculation does not include childcare costs. Data are for 2022. Source: OECD Tax and Benefits Model.
Better access to affordable childcare would lower barriers to work Per cent of earnings lost to higher taxes, lower benefits and childcare costs when entering employment and using centre-based childcare after receiving minimum income benefits
% 120 100 80 60 40
EST
BGR
ITA
KOR
LVA
SWE
ESP
FIN
GRC
HRV
NOR
JPN
POL
PRT
LUX
AUT
DEU
HUN
SVK
OECD
NLD
FRA
LTU
ISL
ROU
BEL
CHE
CAN
IRL
SVN
AUS
GBR
CZE
USA
NZL
0
DNK
20
Note: This indicator measures the percentage of earnings lost when a parent takes up full-time employment at 67% of the average wage and uses centre-based childcare. Calculations refer to a couple with two children aged 2 and 3 where the other parent works full-time at 67% of the average wage and the family claims social assistance and/or Guaranteed Minimum Income (GMI) benefits but not unemployment benefits. Data are for 2021 or latest available year. Source: OECD.
More paternity leave paid at a higher rate would encourage men to take on caring roles Paternity leave for fathers (left axis)
Payment rate (right axis)
Note: The indicator incorporates paid paternity leave and paid father-specific parental and home care leave provided by the government. Data are for 2022. Source: OECD.
USA
ISR
NZL
CHL
MEX
TUR
HUN
LVA
CRI
COL
CZE
CHE
ITA
GBR
AUS
DNK
POL
ISL
BEL
PRT
SVK
LUX
FRA
JPN
KOR
LTU
0
EST
0
SVN
20
CAN
10
NLD
40
IRL
20
DEU
60
FIN
30
GRC
80
AUT
40
SWE
100
NOR
50
ESP
60
% of average earnings 120
Weeks
Better training programmes and work experience would reduce gender segregation %
Share of women studying and working in science, technology, engineering and mathematics fields
40 2020
35
2015
30 25 20 15 10 5 0
University completions in the fields
Working in the fields with university qualifications
Source: Department of Education, Skills and Employment.
Vocational education and training completions in the fields
Working in the fields with vocational and education and training qualifications
Achieving the climate transition
Emissions are projected to fall but further policies are required to achieve targets Mt CO2-e
Historical and projected greenhouse gas emissions
800 700 600 500 400 Historical emissions Trajectory to 2030 and 2050 targets Projected emissions
300 200 100 0
1990
1995
2000
2005
2010
Note: Including land-use, land-use change and forestry (LULUCF). Source: Department of Climate Change, Energy, the Environment and Water.
2015
2020
2025
2030
2035
2040
2045
2050
Further increasing renewable electricity generation would support decarbonisation TWh 90
Electricity generation by source Hydro
80
Solar
70
Wind
60 50
Biogas Solid biomass Renewable share (right scale)
40
35 30 25 20 15
30
10
20
5
10 0
%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: IEA World Energy Statistics.
0
Increased energy RD&D funding would spur green innovation and adoption % of GDP
Public expenditure on energy research, development and demonstration
0.12 0.10 0.08 0.06 0.04 0.02 0.00
NOR FRA JPN FIN AUT ESP CAN NLD BEL GBR DEU SWE CHE HUN KOR USA DNK PRT ITA EST POL SVK AUS CZE LTU NZL IRL TUR CHL MEX Note: RD&D stands for research, development and demonstration. Data are for 2023 or latest available year. Source: IEA.
Stringent federal fuel economy standards would help reduce transport emissions Passenger transport energy intensity
Passenger energy intensity (MJ/pkm)
3.0 2.5 2.0 1.5 1.0
Australia
France
Germany
Japan
United Kingdom
United States
0.5 0.0
2005 Source: IEA.
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Reduction needed to achieve global net zero emissions target
2025
2030
Exposure to climate change risks should be considered in land use planning decisions % 45
Percentage of population exposed to very high or extreme wildfire danger
40 35 30 25 20 15 10
0
AUS CRI CHL PRT COL MEX USA OECD SWE DEU POL FRA CAN ITA TUR SVK NLD SVN NZL KOR ESP LVA LTU GRC EST CZE FIN AUT BEL DNK HUN ISL IRL ISR JPN LUX NOR CHE GBR
5
Note: Data are an annual average over 2017-2021. Source: IEA/OECD Climate-related hazards: Wildfire, Environment Statistics database.
Strengthened training schemes could help workers during the green transition % of GDP 0.50
Public expenditure on training-related labour market programmes
0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00
AUT FIN FRA DNK PRT BEL DEU LUX ITA CHE EST CRI OECD IRL NLD ESP KOR NOR SWE CAN NZL ISR SVN LVA LTU USA AUS CHL JPN Note: Data are for 2023 or latest available year. Source: OECD.
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