Why is Canada leaving the OECD?
AUSTRALIA will leave the OECD in 2019, the World Economic Forum has announced.
The move, announced today, follows the release of the first of several reports by the organisation this year, which found that the country’s economic performance in the years since 2008 has been “unacceptable”.
The OECD, which has a global membership, said that in 2016-17 the economic performance of the 28-nation organisation “fell short” of its objectives, and the organisation has pledged to “continue to work towards bettering this performance”.
The move comes as the country is preparing to introduce a new national income tax.
It follows an earlier decision by Prime Minister Malcolm Turnbull to delay the introduction of the GST until 2019, amid concerns that the tax would increase household debt.
The announcement comes as an analysis of Australia’s economic future by the OECD, published earlier this year.
It said that Australia’s economy is currently “at least two-thirds behind its global peers”.
“In a world where the productivity gap between rich and poor is narrowing and inequality is increasing, the future of our economy is now increasingly uncertain,” the report said.
“Our economic performance has not improved significantly since 2008 and is not sustainable.”
Read more: Australia’s GDP is currently two-third behind its international peers, the report found.
“Australia’s economy has not moved towards the high growth and employment that we have been promised,” the study added.
The OECD’s report, released today, said Australia’s growth had stagnated over the past three years, with the economy shrinking by about 0.4 per cent per annum, compared with growth of 1.1 per cent for the US, 0.9 per cent in the UK and 1.6 per cent globally.
The report found that, while growth in gross domestic product (GDP) for Australia had grown faster than for the rest of the world, the country was still in a long-term slump.
The growth in GDP was driven largely by lower population growth, which had reduced population size.
The decline in population growth meant Australia was in the midst of a “recession” in population numbers, the OECD report found, and that its labour force participation rate was only 61.4.
It also noted that the number of people aged 65 and over in the labour force fell from 13.6 million in 2012 to 10.5 million in 2016, while the population aged 15 to 64 increased from 16.6 to 22.5million.
The labour force declined for the first time in 25 years, the study found.
It noted that this could have a significant impact on future growth.
“The low labour force growth, along with the low productivity growth and falling employment rate, has reduced our prospects for further growth in economic growth, employment, and income growth,” the OECD said.