OECD calls on Australia to raise GST and increase affordable housing amid budget deficit
The OECD has called on the government to broaden the GST, do more to reduce greenhouse emissions and adopt ambitious social housing targets as part of its annual economic survey of Australia.Ahead of Jim Chalmers’ fifth federal budget in May, the Organisation for Economic Co-operation and Development said Australia’s economy was “now normalising”, after struggling through a lengthy period of weak growth following the pandemic.Interest rate cuts and a rebound in households’ real disposable incomes would drive average economic growth up to “a little more than 2% over the coming years”, it said in the report.Sign up: AU Breaking News email“But longstanding challenges of slower productivity growth, high housing costs and high carbon emissions need to be addressed.”The OECD called out the damage from Australia’s increasingly unaffordable housing market and backed federal and state-level efforts to boost home supply by easing land restrictions and increasing density.
“Housing shortages lead to overcrowding and financial strain, reduce labour mobility, worsen intergenerational equity and increase congestion as people travel large distances to work,” the report said,The organisation also advocated in the report for replacing state-based property stamp duties with a land tax, raising the target for social housing and increasing public funding,“Social housing accounts for about 4% of the housing stock in Australia, down from 6% in 1990 and only about half the OECD average,” it said,The Paris-based organisation, sometimes referred to as the “club of rich nations”, is a bastion of economic orthodoxy and is led by Australia’s former finance minister, former Liberal senator Mathias Cormann,December’s mid-year budget update confirmed that the nation’s finances remain mired in deficits over the coming decade.
In its report, the OECD urged the Albanese government to do more to put the budget on a more sustainable footing, calling for “expenditure restraint and revenue enhancing tax reforms”.Among those tax reform measures were a longstanding recommendation to broaden the GST and to consider lifting the rate above 10%, with the proceeds used to reduce Australia’s overreliance on personal income tax.The OECD estimated that this tax reform would add 1.6% to the size of the economy in a decade’s time.It also said Australia was “broadly on track” to meet its 2030 emissions reduction ambitions, but that “further efforts will be needed to reduce transport emissions, manage a higher share of renewables in transport and tackle agricultural emissions”.
“Australia was for many years an international laggard on climate action and still has among the highest per capita carbon emissions of any country in the world and among the lowest implicit prices of carbon,” the report said,“In recent years, however, Australia has made relatively rapid progress on the energy transition, with a growing proportion of climate policy instruments adopted in most areas,”The report advocated for a “gradual” lift in petrol taxes, which it said were “well below European levels”, which was “contributing to the low take-up of low emission vehicles”,
Gwyn Jones obituary
My friend Gwyn Jones, who has died aged 75, lived and breathed revolutionary politics, and was always restless for change.Any news of an uprising somewhere in the world sent him into raptures, and he would be itching to become involved in any way he could. He went to live in Spain in the mid-1970s after the end of the Franco regime, supporting socialist causes there, and spent a number of years in post-Soviet Romania and Hungary on a similar mission.Though his efforts were often unsuccessful, he developed around him a small band of people who felt the same way that he did. He was a sweet man and a flawed genius, but definitely a genius: he could gain complete mastery of any topic he chose to delve into, and his understanding of history and Marxism was a wonder to behold
People in Newark: share your views on Robert Jenrick defecting to Reform UK
After months of denials, Robert Jenrick finally defected to Reform UK last week.Nigel Farage called it the “latest Christmas present I’ve ever had”, while Conservative MPs called him a “coward” and a “traitor”.In Jenrick’s Newark constituency, his former Tory colleagues were aghast. Sam Smith, a local councillor, said the defection was “a betrayal to the voters of Newark”, who voted for conservative policies and values as well as “a betrayal to his friends who have helped him get re-elected.” But what do Jenrick’s constituents make of Jenrick’s defection?We would like to speak to people who live in Newark about what they think
Keir Starmer to visit China with British business leaders next week, say reports
Keir Starmer will reportedly visit China next week after controversial plans for Beijing to build a vast embassy in London were approved by his government.The UK prime minster will lead a delegation of blue-chip British companies, according to Reuters. The same firms, which include BP, HSBC, Intercontinental Hotels Group, Jaguar Land Rover and Rolls-Royce were also said to be among those who will join a revamped “UK-China CEO council”.There was no comment from Downing Street early on Wednesday. However, Jonathan Powell, the national security adviser, went to Beijing in November for talks with China’s top diplomat, Wang Yi, before an anticipated trip by Starmer
Starmer should resist calls to match Trump ‘tweet-for-tweet’, says Miliband
Britain would be in a “much worse” position if Keir Starmer had done what others were calling on him to do by matching Donald Trump “tweet-for-tweet”, a UK cabinet minister has said.Defending the prime minister’s handling of the deepening diplomatic crisis over Greenland and the US president’s threat of levying tariffs on the UK and other Nato allies, the energy secretary, Ed Miliband, declined to say if Britain would respond in kind.Speaking before Trump’s arrival at the World Economic Forum in Davos, Miliband, a former Labour leader, also told the BBC that Starmer was not travelling to the summit because there were “all kinds of other things that he’s doing”.“The bigger picture here is that the prime minister is, I think, navigating a really difficult international situation with great skill and in our national interest,” he told BBC Radio 4’s Today programme.“I know some people will want to say: ‘Why hasn’t the prime minister been matching Donald Trump tweet-for-tweet?’ All of that
Nigel Farage apologises for 17 breaches of MPs’ code of conduct
Nigel Farage has apologised for 17 breaches of the MPs’ code of conduct after failing to declare £380,000 of income on time, saying he is an “oddball” who does not do computers.The Reform UK leader and MP for Clacton said he had relied on a senior member of staff to submit his income to the register of interests and had been let down, but he took full responsibility for the error.He blamed “severe growing pains” as Reform UK had been overwhelmed by administration and emails since growing in size and gaining MPs at the 2024 election. The interests included his work as a broadcaster for GB News and payments for social media output on Google and X.Farage, who is the highest-earning MP, has previously admitted breaching parliamentary rules by failing to register a trip to Florida to appear at a fundraising event for Donald Trump
Love, actually? Starmer’s ‘keep calm’ approach to Trump comes under strain
In his account of Tony Blair’s years in power, The New Machiavelli, Jonathan Powell sets out two opposing strategies for any British prime minister in dealing with their counterpart in the White House.The first, he says, is “cutting a bella figura” – parading for show – by openly criticising the US president, for which he gives the example of the French. The other, and the approach preferred by Powell, is to do diplomacy in private and build a close relationship, in the hope of having greater influence.These days, Powell is Keir Starmer’s national security adviser and his closest, most influential lieutenant on world affairs. That his prescription for the UK’s strategy towards Donald Trump is so close to the prime minister’s natural instincts goes some way to explaining that
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