Presentation of the 2018 OECD economic survey of Australia

1. OECD
OECDEconomics
2018 OECD ECONOMIC
SURVEY OF AUSTRALIA
Paris, 10 December 2018
Ensuring further success
www.oecd.org/eco/surveys/economic-survey-australia.htm

2. 2
27 years of robust economic growth
100
150
200
250
300
350
400
100
150
200
250
300
350
400
1975 1980 1985 1990 1995 2000 2005 2010 2015
Index 1975 = 100Index 1975 = 100
Annual GDP last
dipped in 1991
Source: OECD Analytical Database.
Gross Domestic Product (real)

3. 3
Incomes continue to rise
90
95
100
105
110
115
2005 2008 2011 2014 2017
Real GDP per capita
AUS EA OECD USA
Index 2005 = 100
Source: OECD Analytical Database.

4. 4
Unemployment is falling
3
4
5
6
7
2005 2007 2009 2011 2013 2015 2017 2019
Source: Thomson Reuters.
Rate of unemployment (unemployed persons as % of labour force)

5. 5
The quality of life is good
31
23
12 11 11 10
7 7
5
1 1
Work & life
balance
Personal
security
Jobs &
earnings
Education &
skills
Income Housing Subjective
well-being
Social
connections
Environmental
quality
Civic
engagement
& governance
Health status
Country rankings (1 to 35)
Indicators of well-being
20% top performers 60% middle performers 20% bottom performers Australia
Source: OECD Better Life Index 2017 database.

6. Monetary policy, housing market and
financial regulation
6

7. Housing markets are beginning to cool
7
75
100
125
150
175
200
225
250
275
2005 2007 2009 2011 2013 2015 2017
House prices in major cities
Sydney Melbourne Brisbane
Adelaide Perth
Index 2005Q1 = 100
Source: Thomson Reuters.

8. Household debt remains high
8
100
110
120
130
140
150
160
170
180
190
200
2005 2007 2009 2011 2013 2015 2017
AUS USA ESP CAN
Household liabilities as a % of net household disposable
income
Source: OECD Analytical Database.

9. Recommendations on monetary policy,
housing market and financial regulation
• In the absence of a downturn, gradually increase
interest rates
• Be prepared for a possible significant correction
in the housing market, including bail-in plans in
the case of bank insolvency
• Assure strong accountability, transparency and
competition in the financial sector including an
appropriate response to the banking Royal
Commission
9

10. Fiscal policy, tax and spending reform
10

11. The federal budget position has
improved
11
Federal budget balance, % of GDP
-5
-4
-3
-2
-1
0
1
2
2006-07 2008-09 2010-11 2012-13 2014-15 2016-17 2018-19 2020-21
Notes: The balance shown is the “underlying cash balance”, which a main reference balance in federal-government budgeting. It
is equal to receipts less payments, less net Future Fund earnings. The dotted line indicates the federal government’s balance
projections.
Source: Commonwealth (federal) Budget 2018-19.

12. Australia’s goods and services tax
remains low
12
Standard rates of Value Added Tax/Goods and Services Tax, 2018
0
3
6
9
12
15
18
21
24
27
0
3
6
9
12
15
18
21
24
27
CAN
JPN
CHE
AUS
KOR
NZL
MEX
ISR
LUX
TUR
CHL
DEU
OECD
AUT
EST
FRA
SVK
GBR
BEL
CZE
LVA
NLD
ESP
ITA
SVN
IRL
POL
PRT
FIN
GRC
ISL
DNK
NOR
SWE
HUN
%%
Source: OECD Tax Database.

13. Recommendations on fiscal policy, tax
and spending reform
• Ensure fiscal balances remain on track to reach
surplus (“budget repair”)
• Further shift the tax mix from direct taxes
(corporate and personal) and inefficient taxes
(including real-estate stamp duty) and towards
the Goods and Services Tax and land taxes
• Make public services more effective, notably
those in health care and long-term care that
were flagged by the Productivity Commission
13

14. Deepening skills to take advantage of
globalisation and technological change
14

15. There are more jobs for the high skilled
15
-6
-4
-2
0
2
4
6
8
Low skill Medium skill High skill
Changes in employment share, 2001 to 2016, percentage points
Source: HILDA database and OECD calculations (see Sila and Dugain, 2018a).

16. Many tasks are being automated
16
0
5
10
15
20
25
30
35
40
45
50
0
5
10
15
20
25
30
35
40
45
50
KOR
FIN
EST
ISR
BEL
JPN
FRA
SWE
CHL
IRL
TUR
AUS
DNK
CAN
NOR
ESP
USA
OECD
GBR
NZL
NLD
POL
SVN
GRC
AUT
DEU
ITA
CZE
High risk of automation (>70%) Risk of significant change (50-70%)
Notes: Jobs are at high risk of automation if the likelihood of their job being automated is at least 70%. Jobs at risk of
significant change are those with the likelihood of their job being automated estimated at between 50 and 70%.
Source: OECD calculations based on the Survey of Adult Skills (PIAAC) 2012, 2015; and Arntz, M., T. Gregory and U.
Zierahn (2016), “The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis”, OECD Social, Employment
and Migration Working Papers, No. 189.
Share of jobs at risk of automation, %

17. Student performance needs to be
improved
17
(8)
(9)
(9)
(12)
(18)
485
500
515
530
2003 2006 2009 2012 2015
Average mathematics scores from the OECD’s Programme for
International Student Assessment (PISA)
OECD AUS
Notes: The number in parentheses indicates Australia’s ranking among OECD countries
Source: OECD Program for International Student Assessment (PISA), 2000, 2003, 2006, 2009, 2012, and 2015.

18. Recommendations on deepening skills
• Continue focus on disadvantaged students in early
childhood education and schools
• Improve basic-skills provision in VET education and
reducing policy bias in favour of university education
• Provide better information for education choices
including through a single information platform
18

19. Increasing inclusiveness to avoid groups
being left behind
19

20. Employment among women can be
boosted
20
50
55
60
65
70
75
80
85
GRC
ITA
ESP
IRL
AUS
USA
OECD
GBR
DEU
BEL
FRA
CAN
FIN
NLD
AUT
PRT
DNK
% Employment rates for women (25-54 years old)
with at least one child aged 0-14 years
Year 2014
Source: OECD Family Database.

21. The indigenous population remains
significantly disadvantaged
21
0
10
20
30
40
50
60
70
80
90
15-64 year-olds Male Female
Employment rate Life expectancy
Continuing gaps
for the indigenous population
Indigenous Non-Indigenous
Source: Closing the gap: Prime Minister’s report 2018.
(%) (Years)

22. Recommendations on increasing
inclusiveness
• Incentivise jobactive providers to achieve longer job
retention, provide better quality training and on-the-
job support
• Focus further on lone-parents in terms of childcare
availability and affordability, and career guidance
and training
• Give indigenous communities a greater role in policy
design and implementation
22

23. Urban environments matter
23

24. Australia is highly urbanised
24
0
10
20
30
40
50
60
70
80
Queensland New South Wales Victoria South Australia Western Australia
%
Share of population in greater capital city areas
% of state population
Year 2016
Source: Australian Bureau of Statistics.

25. Metropolitan populations are growing
rapidly
25
0
5
10
15
20
25
30
35
40
Greater Sydney Greater Melbourne Greater Brisbane Greater Adelaide Greater Perth Australia
% growth in population over the period
Recent and upcoming population growth
2006-2016 2016-2026

26. Congestion is lengthening commutes
26
50
55
60
65
70
75
80
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: VicRoads: traffic monitor.
Average travel speed on Melbourne’s freeways
during the afternoon peak, km/h

27. Government investment is being
ramped up
27
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2000 2002 2004 2006 2008 2010 2012 2014 2016
% of GDP Total government investment spending
Source: OECD Analytical Database.

28. Recommendations on urban
environments
• Improve infrastructure project selection by raising
the prominence of cost-benefit analysis and
economic returns
• Improve road charging, including distance charging
and urban congestion charging
• Strengthen urban-area governance through greater
leadership from federal and state initiatives and the
amalgamation of small local authorities
28

29. Improving environmental policy
29

30. 30
A sizeable challenge to reduce
greenhouse gas emissions
300
350
400
450
500
550
600
650
700
300
350
400
450
500
550
600
650
700
1990 1993 2000 2005 2010 2015 2020 2025 2030
MtCO2-equivalentMtCO2-equivalent
Greenhouse gas emissions
2017 projections Trajectory to minus 28% target
Target is for 26 - 28 %
reduction in 2005 level by 2030
MtCO2-equivalent: millions of tonnes of carbon-dioxide and equivalent emissions
Source: Department of the Environment and Energy.

31. Recommendations on
environmental policy
• Stabilise and strengthen climate-change policy.
Develop and implement a national, integrated
energy and climate policy framework for 2030
• Strengthen priority on biodiversity in project
approval and land use
31

32. 32
For more information…..
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without
prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers
and boundaries and to the name of any territory, city or area.
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