The Hon Josh Frydenberg MP
10 December 2018
OECD REITERATES PROJECTION OF “ROBUST” GROWTH
For the second time in less than a month, the Organisation for Economic Co-operation and Development (OECD) has recognised the strength of the Australian economy, describing it as “in upswing, with growth above potential”.
In its first Economic Survey of Australia since March 2017, the OECD projects “continued robust output growth of around three per cent”, well above the OECD average.
The Survey notes, “With 27 years of positive economic growth, Australia has demonstrated a remarkable capacity to sustain steady increases in material living standards and absorb economic shocks.”
Unemployment is down to five per cent and more than one million additional people are in work than when the Government came to office five years ago. The Survey describes this as a “large boost in employment” and, importantly, notes, “Economy-wide wage data shows signs of pick up.”
The Government’s strong and disciplined budget management, which has seen the deficit drop to its lowest level in a decade, is acknowledged by the OECD. It notes, “Completion of ‘budget repair’ is on the horizon”, highlighting the Government’s “concerted policy effort” to achieve such.
The Survey also welcomes the Government’s focus on tax reform including our tax relief for low and middle income earners and small and medium-sized businesses as well as our “concerted campaign to reduce tax avoidance and evasion”, observing that it “is bringing advances on several fronts”.
The OECD notes house prices have gradually cooled, stating “the current trajectory would suggest a soft landing”, but warns, “A large drop in house prices could cut household consumption, prompt collapse in the construction sector, increase mortgage defaults and freeze back lending to businesses.”
Labor’s housing tax policies will do just this. They will damage Australia’s housing market and destroy the equity that people hold in their homes, increasing the risk of financial instability and lower economic growth.
The OECD’s Economic Survey follows their Economic Outlook last month and builds on recent findings from global credit rating agencies, Standard & Poor’s and Fitch, which reaffirmed Australia’s AAA credit rating and the International Monetary Fund which recognised our budget management and strong economic growth.
The Liberal National Government’s economic plan is delivering a stronger economy and helping us deliver the essential services Australians rely on.
As the OECD says, “Australia faces economic challenges that, if not handled well, could see an end to its strong track record.” Australia cannot risk a return to Labor’s high tax and reckless spend approach.