The latest OECD Economic Outlook has sounded the alarm on a government that is distracted from managing the economy at a time it has never been more critical.
The OECD has forecast the second consecutive downgrade to Australia’s GDP growth forecast and predicts inflation will be higher for longer under Labor.
Under the OECD’s projections, Australia’s economy will grow at a slower rate than the EU, the United States, Brazil, Mexico and the G20 average.
Australia’s core inflation rate will lead the Euro Area, the United States and G20 advanced economies by 2024.
These forecasts come as Australia is already experiencing collapsing real wages, a GDP per capita recession, record slumps in consumer confidence, falling labour productivity and one of the highest core inflation rates amongst advanced economies.
Most alarmingly, the OECD’s policy recommendations stand at odds with the government’s agenda:
- More flexible labour markets, not more union red tape
- Stronger fiscal policy, not a one-and-done surplus
- Reducing the burden of state-owned enterprises, not creating new ones
Shadow Treasurer Angus Taylor said families are already facing higher mortgage rates, higher rents, higher energy bills and higher taxes under the Albanese Labor Government.
“For families expecting relief from the cost-of-living crisis, this is a bitter pill to swallow,” Mr Taylor said.
“This is a consequence of a government that has had its eye off the ball when it comes to the economy.
“This is a government that is distracted by its Canberra Voice and more interested in paying back its biggest donors than it is in managing the economy.
“With inflation already higher for longer under Labor, Australian families cannot afford another year of Labor on autopilot.”
Shadow Finance Minister Senator Jane Hume said the OECD's updated economic outlook has sounded the fiscal alarm bells.
“Labor inherited a budget benefitting from a booming commodity sector and record low unemployment following nine years of pro-growth, pro-jobs and productivity-enhancing economic management from the Coalition,” Senator Hume said.
“With the 2022-23 budget year inheriting the fiscal and economic settings from the Coalition, the test for Labor is: will it get better or worse from here?
“Labor must commit to restoring the fiscal guardrails, reining in spending to help bring down inflation and delivering the reforms the economy needs to get productivity moving to boost jobs, boost wages and boost economic growth.”