The OECD has called on the Albanese Government to broaden the GST, do more to reduce greenhouse emissions and adopt ambitious social housing targets as part of its annual economic survey of Australia. Source: The Guardian.
Ahead of Treasurer Jim Chalmers’ fifth federal Budget in May, the Organisation for Economic Co-operation and Development said Australia’s economy was “now normalising”, after struggling through a lengthy period of weak growth following the pandemic.
Interest rate cuts and a rebound in households’ real disposable incomes would drive average economic growth up to “a little more than 2% over the coming years”, it said in the report.
“But longstanding challenges of slower productivity growth, high housing costs and high carbon emissions need to be addressed.”
The OECD called out the damage from Australia’s increasingly unaffordable housing market and backed federal and state-level efforts to boost home supply by easing land restrictions and increasing density.
“Housing shortages lead to overcrowding and financial strain, reduce labour mobility, worsen intergenerational equity and increase congestion as people travel large distances to work,” the report said.
The organisation also advocated in the report for replacing state-based property stamp duties with a land tax, raising the target for social housing and increasing public funding.
“Social housing accounts for about 4 per cent of the housing stock in Australia, down from 6 per cent in 1990 and only about half the OECD average,” it said.
The Paris-based organisation, sometimes referred to as the “club of rich nations”, is a bastion of economic orthodoxy and is led by Australia’s former finance minister Mathias Cormann.
In its report, the OECD urged the Albanese Government to do more to put the budget on a more sustainable footing, calling for “expenditure restraint and revenue-enhancing tax reforms”.
Among those tax reform measures were a longstanding recommendation to broaden the GST and to consider lifting the rate above 10 pr cent, with the proceeds used to reduce Australia’s overreliance on personal income tax.
It also said Australia was “broadly on track” to meet its 2030 emissions reduction ambitions, but that “further efforts will be needed to reduce transport emissions, manage a higher share of renewables in transport and tackle agricultural emissions”.
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OECD calls on Australia to raise GST and increase affordable housing amid budget deficit (By Patrick Commins, The Guardian)
