OECD MINISTERIAL COUNCIL MEETING 2003

The OECD Ministerial Council Meeting in Paris provided the first opportunity

for Ministers to discuss the global economic outlook in the immediate aftermath

of the war in Iraq. The OECD sees a hesitant recovery in world economic growth,

with the upturn now delayed until later in 2003. Growth of only 1.9 per cent

is expected in 2003 for the OECD, but is expected to pick up to 3 per cent in

2004.

While recent discussions of the short-term economic outlook have been dominated

by geo-political uncertainties, at this meeting Ministers refocussed on the

need for structural reform to promote stronger long-term growth.

The discussion pointed to the clear divergence in economic performance between

OECD countries, with countries such as Australia enjoying the benefit of economic

reform and drawing away from countries that have not engaged in structural reform

to the same extent.

The OECD forecasts growth for Australia of 3.2 per cent in 2003 and 3.8 per

cent in 2004, underpinning the resilience of the Australian economy through

the world economic downturn.

The Ministerial Council Meeting also discussed the fiscal pressures posed by

the ageing of the population, again pointing to the need for structural reform

to support the growth needed to meet these pressures. In this regard, Australia

is well placed compared to most other OECD countries, however it is clear all

countries, including Australia, must have in place the policies to deal with

the challenges of an ageing population, particularly reform of health care and

pharmaceutical benefit schemes.

Ministers reaffirmed their commitment to the Doha Round WTO negotiations. Australia

encouraged OECD members to show leadership in building support for the Round,

with agriculture being of core importance to the objectives of the Doha Development

Agenda.

The OECD Forum provides business, labour and civil society the opportunity

to provide their input to government ministers.

The recent attention on the adequacy of corporate governance arrangements in

a number of OECD countries was a particular focus of these consultations. Corporate

governance reforms put in place by the Government have ensured Australia is

in the forefront of developments in this area.

In addition to the OECD meetings, the Treasurer also gave a speech to Australian

Business In Europe (ABIE).

Europe remains an important trading partner for Australia and a key source

of investment. Growing economic links to Asia makes Australia a potentially

attractive base for European countries seeking business in the Asia-Pacific

region.

In order for these opportunities to be maximised, all countries need to commit

to open markets and ongoing structural reform. Unfortunately in some areas of

policy, such as trade in agriculture, Europe has not yet been prepared to fully

make this commitment.

Paris, France

30 April 2003