I have this comment piece in The Australian today, in response to the OECD’s predictable survey of Australia, produced every other year.
Does anyone care what the OECD thinks about the Australian economy and its predictable recommendations for reform? There are certainly some people who think that we should take notice of this ‘respected’ and ‘independent’ international organisation. Personally speaking, I have my doubts.
The OECD’s survey ofAustralia is published every other year. According to the blurb, “the survey is published on the responsibility of the Economic and Development Review Committee of the OECD”. (This is just one example of bad grammar which is littered throughout the report.)
A draft report is first completed, in part based on highly selective interviews made by the principal authors when they visitAustralia. This draft report is then revised “in light of discussions.”
The reality is the draft document is heavily vetted and amended to suit the political leaders of the countries being surveyed. To be sure, there is often something of a wish-list of policies, often emanating from the country’s Treasury or equivalent, outlined in these reports. But by putting these reforms in a medium term context, the politicians need not worry too much with an immediate response.
This is not the entire explanation for OECD’s mushy, simplistic and occasionally impenetrable survey of the Australian economy. In recent times, the organisation itself has veered deep-green, putting out an appallingly inaccurate report on fossil fuel subsidies in its member countries.
This explains its gushy endorsement of “the carbon price, together with accompanying measures.” It comes as no surprise that the report finds that “recent progress to promote more sustainable growth based on efficient environmental policy is welcome and should continue.”
Most of the report is pretty straightforward. The Australian economy has fared relatively well; monetary policy has been helpful; net public debt is low;Chinahas helped; unemployment is at an acceptable level; productivity growth needs to be boosted.
Of some slight controversy is the idea that the government should not be throwing taxpayer funds at declining industries, but we know this government won’t be taking any notice of that. The report strangely recommends the establishment of a stabilisation fund in which to park the proceeds of mining boom. Memo to OECD: the mining boom is over. And, according to the OECD, don’t worry too much about a budget surplus – she’ll be apples in the medium term.
The report puts a plug in for taxation reform, including lowering the company tax rate, expanding coverage of the resource rent tax (another memo to OECD: it would not raise any additional revenue, so why bother), removing the GST exemptions; and making state taxes more efficient. My response to this: we know how to reform taxation, so thanks for the advice. It just won’t be happening anytime soon.
There are a few lame ideas about improving productivity, including making sure that students finish their vocational training and investing in infrastructure. There is no mention of the regulatory overload that is crippling businesses but I guess pointing that out could be a bit embarrassing to the Australian government.
And when it comes to the regulation of industrial relations, the OECD thinks our system is just fine and that businesses wouldn’t want further changes anyway. The dead hand of those commenting on the draft is very clear to see in this section of the report.
Take this clanger, “The structural labour market indicators do not point to significant imbalances in the organisation of labour relations in favour of employees since the introduction of the FW Act.” What does this even mean? There are no indicators offered in the report one way or another.
And I love this homily based on zero analysis. “It thus seems desirable to avoid further major reforms of [industrial relations] institutions in absence of obvious need.” Tell that to the SME business owners whose opinions are of course not sought when the researchers make their quick as lightning visits to our fair shores.
And then there is this clanger on steroids. “A more co-operative climate to deal with the efficiency/fairness dilemma opposing social partners would benefit both employers and employee and favour employment-driven innovation”. Only a European-based organisation could produce this drivel.