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Australia 2017 OECD Economic Survey Boosting Innovation

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Further structural reform is required to raise productivity growth through a better climate for business and stronger R&D outcomes.

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Australia 2017 OECD Economic Survey Boosting Innovation

  1. 1. OECD OECDEconomics 2017 OECD ECONOMIC SURVEY OF AUSTRALIA Paris, 2 March 2017 (3 March, Australian Eastern Time) Boosting innovation www.oecd.org/eco/surveys/economic-survey-australia.htm
  2. 2. • Macroeconomic and financial institutions and policies are broadly sound • Further structural reform is required to raise productivity growth through a better climate for business and stronger R&D outcomes • Widening income inequalities require continued attention 2 Key messages
  3. 3. Income continues to rise 3 GDP per capita Source: OECD National Accounts statistics.
  4. 4. Well-being is high 4 OECD Better Life Index Source: OECD.
  5. 5. But low commodity prices have slowed growth 5 Source: OECD Analytical database; Reserve Bank of Australia.
  6. 6. Productivity growth has also slowed 6 Labour productivity growth trend (per hour worked) Source: The Conference Board.
  7. 7. Inequality has risen 7 Real increase of household income and wealth, 2004-14 Source: Australian Bureau of Statistics.
  8. 8. Macroeconomic and financial institutions and policies are sound 8
  9. 9. House prices continue to rise 9  Maintain tight macro-prudential measures and facilitate housing supply Real house price developments Source: OECD Analytical House Price database.
  10. 10. The house-price-to-income ratio is rising 10 House price to income ratio Source: OECD Analytical House Price database.
  11. 11. Public debt remains comparatively low 11 Gross public debt Source: OECD Analytical database.
  12. 12. Other recommendations on macroeconomic policy  Rely more heavily on fiscal policy if downside risks materialise  Consider a spending ceiling, target debt in the long term and make greater use of stabilisation funds 12
  13. 13. Boosting productivity growth through a better climate for business 13
  14. 14. Pro-growth tax reform is needed 14  Further shift from corporate income tax taxes and inefficient taxes  Raise the Goods and Services Tax and land taxes Standard rates of Value Added Tax/Goods and Services Tax, 2016 Source: OECD.
  15. 15. There is room to improve telecoms 15 Average fixed broadband speed Source: Akamai (2016), State of the Internet report.  Facilitate entry of a fourth operator in mobile telephony
  16. 16. Skills have deteriorated 16  Broaden the scope of subsidies for innovation-related subjects PISA results Source: OECD PISA database.
  17. 17. Further recommendations on boosting the climate for business  Improve competition law, notably by strengthening the definition of abuse of dominant position  Adjust insolvency legislation  Increase labour mobility, for instance by lowering inter-state differences in education and training programmes  Encourage market entry by innovative businesses. Use competition policy tools to combat resistance by incumbents and adjust sectoral regulation quickly as new firms and industries emerge  Encourage more innovation in public services by opening up procurement to more bidders and further development of digital government services 17
  18. 18. Boosting productivity growth through stronger R&D outcomes 18
  19. 19. R&D spending is middle-ranking 19 R&D spending as a share of GDP, 2014 or latest Source: OECD MSTI database.
  20. 20. Research quality compares well 20 Quality measures of Australian research publications, 2015 Source: Australian Department of Industry, Innovation and Science.
  21. 21. Commercialisation outcomes are lagging behind 21 Number of start-up companies formed by research institutions per USD 1bn research expenditure, 2014 Source: Australian Department of Industry, Innovation and Science.
  22. 22. Business-research collaboration is limited 22 Firms collaborating on innovation with higher education or research institutions, latest available year Source: OECD Science, Technology and Industry Scoreboard 2015.
  23. 23. Recommendations on boosting R&D outcomes  Put a greater weight, as envisaged, on collaboration in university funding  Develop a more coordinated approach to industry placements for research students  Assess research outcomes and impacts in the same way across public-sector research organisations  Develop a more integrated, “whole-of-government” approach to science, research and innovation and consolidate innovation support programmes  Make the R&D Tax Incentive more effective 23
  24. 24. Widening income inequalities 24
  25. 25. Inequality has risen 25 GINI coefficient (disposable income, post taxes and transfers) Source: OECD Science, Technology and Industry Scoreboard 2015.
  26. 26. Socio-economic gaps for indigenous Australians remain large 26 Source: Australian Department of the Prime Minister and Cabinet; Australian Bureau of Statistics.
  27. 27. Recommendations on social and environmental goals 27  Avoid freezing welfare pay outs  Continue developing an investment approach to welfare policy that focuses on vulnerable groups  Strengthen the recently introduced safeguard mechanism that accompanies the Emissions Reduction Fund
  28. 28. 28 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. Visit the OECD Economics department website to download this presentation; an overview of the 2017 Economic Survey of Australia and more www.oecd.org/eco/surveys/economic-survey-australia.htm OECD OECD Economics follow us on Twitter https://oecdecoscope.wordpress.com/ Keep up with the latest ideas with the OECD Economics department Blog

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