OECD “GROWTH PROJECT” ENDORSES AUSTRALIAN ECONOMIC PERFORMANCE

The first report of the OECD Growth Project “Is There a New Economy?”

has singled out Australia as one of six countries as the fast-growth new

economies of the 1990s. The OECD report highlights the key role for both

macroeconomic and structural policies in enhancing growth performance.

The first report of the OECD Growth Project has been released in advance

of the Ministerial Council Meeting which will be held in Paris from 25-27

June. I have been elected to chair this meeting.

The Growth Project by the OECD is investigating why only a handful of

OECD economies – the United States, Australia, Denmark, Ireland, The Netherlands

and Norway – have achieved a far better performance than other OECD

members. In doing so, it is exploring whether features of a “new

economy” can be observed: namely, stronger non-inflationary growth

linked to a rising influence of information and communications technology.

The reports preliminary findings – which will be a key topic discussed

at the Ministerial Council Meeting  note that while some of the

features of a new economy are evident, old economy relationships remain

important in shaping growth everywhere.

In identifying the keys to strong growth, the OECD report endorses the

priority the Australian Government has given to pursuing sound macroeconomic

policies and a comprehensive structural reform agenda.

The OECD notes that countries which improved growth over the 1990s, not

only pursued sound structural policies but generally experienced buoyant

cyclical conditions, low inflation and improving public budgets. This

typifies the experience of the Australian economy, especially in the latter

half of the 90s.

The reports findings also endorsed a priority the Government has placed

on taxation reform, noting that excessive or strongly distortive taxation

is detrimental to entrepreneurship.

Furthermore, the OECD highlights the importance of open and competitive

markets in facilitating the use of innovations in information and communications

technology.

25 June 2000

Paris