Economic Policy Reforms 2023

Australia

See more data for Australia on the related dashboard.

Product and labour markets functioning

Performance gaps

• There are signs of reduced competitive intensity in product markets, as well as falling labour mobility. Productivity growth has also slowed down. Moreover, about one fifth of Australian workers require a license to perform their work, which raises economic costs, including by slowing resource reallocation.

Recommendations

• Legislate automatic mutual recognition of occupational licenses in all states.

• Improve data collection on occupational license regimes across the country and consider avenues for further harmonisation.

Digital transition

Performance gaps

• Access to fast broadband is low compared with other developed countries, while increasing connectivity is key to developing Australia’s digital economy.

• The take-up of digital technologies by Australian businesses can also be improved.

Recommendations

• Continue expanding access to fast broadband, including through further investment in the National Broadband Network.

• Expand the Consumer Data Right system to more sectors.

Inclusiveness, social protection, and ageing

Performance gaps

• Unemployment benefits replacement rates remain among the lowest in the OECD and below the relative poverty line.

• Gaps in economic and wellbeing between Indigenous and non-Indigenous Australians remain large.

Recommendations

• Consider further increasing the unemployment benefit replacement rates.

• Embed the Productivity Commission Indigenous Evaluation Strategy in the policy design and evaluation process of all Australian Government agencies.

Climate transition

Performance gaps

• Australia has pledged to reduce carbon emissions by 43% by 2030 from 2005 levels and to net zero by 2050. National carbon emissions need to decline on a much steeper trajectory if this goal is to be met.

Recommendations

• Develop a national, integrated Long-term Emissions Reduction Strategy with clear goals and corresponding policy settings to achieve climate targets.

• Consider expanding the Safeguard Mechanism, which limits industrial net emissions, to a broader set of economic sectors.

Overall performance