“In addition, further investment in the social safety net is needed, not least to complement reforms that promote business and labour market dynamism. For example, the unemployment benefit rate should be raised further.”
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The OECD noted the Morrison government had raised jobseeker by $50 a fortnight, but said at 29% of the average wage the benefit for a single person “is still very low by OECD standards”. The government should consider indexing jobseeker to wage inflation, it said.
The OECD said Australia showed a “decline in environmental innovation over the past decade” and called for “stronger incentives for innovation and adoption of new low emission technologies”.
It said a national carbon price “would be the most efficient means of achieving this” but due to “political considerations” Australia may need to scale up other market-based instruments, including the safeguard mechanism, a carbon offset system for large emitters.
“This should be accompanied by policies that support the transition of workers out of fossil fuel generating industries.”
The OECD report noted that imposition of carbon border adjustments – which are being considered by the European Union – could place “a carbon price on imports from less climate-ambitious countries” and have “significant impacts” on Australia’s trade-exposed sectors.
It listed a decline in fossil fuel demand as a shock that would have “a large impact on the mining sector and related industries” particularly thermal coal exports to China, Japan and South Korea, which are all aiming for net zero emissions.
Cormann was elected head of the OECD in March despite grave concerns voiced by environmental groups over his record on climate change.
In campaigning for the job, Cormann talked up the importance of a “collective green recovery” despite being part of the Abbott government that abolished Australia’s carbon price – incorrectly characterised as a tax – in 2014.
Scott Morrison wants to achieve net zero emissions by 2050 or sooner if possible, but is yet to persuade the junior Coalition partner, the Nationals, to make this government policy and allow him to take it to Cop26 climate talks in Glasgow in November.
Chalmers said Australia’s economy would “be much stronger if it wasn’t shedding billions of dollars a week as a consequence of the Morrison government’s inability to get vaccines and quarantine right”. “That’s the price Australians are paying for Scott Morrison’s mistakes.”
Frydenberg noted the OECD survey found a “substantial quickening in the pace of the vaccine rollout”.
“With more than 43% of Australians fully vaccinated, progress towards our nationally agreed targets of 70 to 80% is accelerating,” Frydenberg said in a statement.
As the survey notes, once we reach these targets, “the reopening of international borders will support the economic recovery through enabling foreign student arrivals, bilateral tourism and population growth stemming from net immigration”.