The OECD says the introduction of much-needed structural reform remains slow at a time when economic growth is yearning a pick-me-up
Australia must reform tax and education at a time of weak productivity and an economic growth slowdown.
That’s the view of the Organisation for Economic Cooperation and Development in a report urging other countries to get on with structural reform.
In its latest Going for Growth analysis, the OECD says Australia is being undermined by declining resource sector investment, weak commodity prices and ‘hesitant’ investment elsewhere in the economy.
Boosting productivity requires that a number of structural weaknesses are addressed, particularly in the areas of education, tax revenue and public infrastructure.
The OECD says the performance of Australian high school students in science and reading proficiency is only around the international average, with a high variation across students.
‘Improving all levels of education will be crucial to boosting the long-term productive and innovative capacity of the economy,’ the Paris-based institution says.
‘Reform should be geared towards increasing the supply and quality of early childhood education as well as towards improving outcomes at the primary and secondary levels.’
It says the introduction of much-needed structural reforms across the global economy remained at a slow pace during 2015, and at a time when economic growth is yearning a pick-me-up.
It found that on average across advanced economies, only 14% of previously recommended reforms were implemented last year.
Another 36% were in the process of implementation, the report launched at the G20 finance ministers and central bankers meeting in Shanghai on Friday says.
China is making structural reform a critical element of its G20 presidency this year.
‘A pick-up in global growth remains elusive, almost eight years after the financial crisis,’ OECD chief economist Catherine Mann says.
All countries contributing collectively to reform efforts to support demand improve the prospects for a return to higher productivity and growth both at home and in the global economy, Ms Mann says.
AAP
