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2018 OECD Economic Surveys: Australia 2018

image of OECD Economic Surveys: Australia 2018

Australia's long span of positive output growth continues, demonstrating the economy's resilience. In the absence of negative shocks, policy rates should start to rise soon, as wage growth and price-inflation pick up. Fiscal discipline will nevertheless still be required to bring balances to surplus. Despite countervailing measures, the housing market and related debt pose macroeconomic risks. Furthermore, as flagged in previous Surveys, there is room to improve the tax system, notably through greater use of value-added tax and less use of inefficient and distorting taxes, such as real-estate transactions tax.  

 

Levels of well-being are generally high but climate-change policy still lacks clarity and stability and there are socio-economic challenges. Some groups are at high risk of being disrupted by globalisation and technological change and this is the theme of this Survey’s in-depth chapter. Further reforms to education, including efforts to improve PISA scores and vocational education, and better target disadvantaged students, are important. So too is activation policy where there is scope to improve employment services, support for displaced workers and measures helping parents combine work and family life. Australia’s highly urbanised population means that good metropolitan transport, planning and housing policy can importantly boost labour-market flexibility, as well as living standards.

SPECIAL FEATURE: COPING WITH GLOBALISATION AND TECHNOLOGICAL CHANGE

 

 

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Benefitting from globalisation and technological change

Australia has seen large rises in living standards over the last decades across the whole of the income distribution. Technological change and international trade have contributed to this success, but have also brought structural change. Some industries have declined, while others flourished. Furthermore, new technologies and structural change create new skills and new tasks, boosting demand for some jobs, while making others disappear.Although technology and globalisation have not decreased overall employment, certain people, groups, and communities have undergone disruptive change and experienced falling living standards. Some groups face a higher risk of poverty and laid-off workers can have difficulty finding a new job. Well-informed and well-targeted policy is therefore needed to ensure that the benefits of technology and globalisation are widely shared.This chapter focuses on policies to ensure that everyone in Australia has the opportunity to benefit from technological change and globalisation. The chapter assesses policies relating to three issues: i) labour markets and active labour market policies; ii) education and skills; to ensure adequate skills for accessing good quality jobs; and iii) urban environments, ensuring that Australia's highly urbanised population can adapt to change.

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