OECD Economic Surveys : Australia, 1996-1997.

219 Pages·1.019 MB·English

by  OECD

OECD
D
ECONOMIC
SURVEYS
C
E
AUSTRALIA
O
1997
OECD
ECONOMIC
SURVEYS
1996-1997
AUSTRALIA
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
(cid:211) OECD, 1996.
(cid:211) Software: 1987-1996, Acrobat is a trademark of ADOBE.
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ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,
and which came into force on 30th September 1961, the Organisation for Economic
Co-operation and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising
standard of living in Member countries, while maintaining financial stability, and
thus to contribute to the development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member
countries in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory
basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada,
Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the
United Kingdom and the United States. The following countries became Members subse-
quently through accession at the dates indicated hereafter: Japan (28th April 1964),
Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973),
Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary
(7th May 1996) and Poland (22nd November 1996). The Commission of the European
Communities takes part in the work of the OECD (Article 13 of the OECD Convention).
Publie´ e´galement en franc¸ais.
(cid:211) OECD 1996
Applications for permission to reproduce or translate all or part of this
publication should be made to:
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2, rue Andre´-Pascal, 75775 PARIS CEDEX 16, France.
Table of contents
Assessment and recommendations 1
I. Recent trends and short-term prospects 16
Solid economic growth 16
Employment growth slows 23
A temporary surge in inflation 26
Some narrowing of the current external deficit 29
The outlook to 1998 33
II. Economic policy 37
Monetary policy 37
Fiscal policy 51
III. Implementing the OECD Jobs Strategy 67
Introduction 67
Labour market and employment performance 69
Policy requirements 76
Recent policy actions 111
Assessment and scope for further action 124
IV. Education and training 130
Introduction 130
Traditional features of the education and training system 131
Meeting the challenge 133
Education, training and earnings 151
Outstanding issues 155
iii
List of acronyms 158
Notes 159
Bibliography 175
Annexes
I. Active labour market policies (ALMPs) and case management 181
II. Institutional arrangements in the education and training sector 184
III. Government funding and provision of formal education 188
IV. Calendar of main economic events 191
Statistical annex and structural indicators 197
Boxes
1. The OECD Jobs Study: synopsis of recommendations for Australia 77
2. Elements of the 1995 national competition policy package 122
Tables
Text
1. Demand and output 18
2. The labour market 24
3. Costs and prices 27
4. Trade in goods and services 32
5. Current account trends 32
6. Short-term prospects 35
7. Commonwealth budget over economic cycles 55
8. Commonwealth budget developments 57
9. Budget measures and forecasts 59
10. Indicators of the structural rate of unemployment 69
11. Overall tax wedges, single APW, 1978-94 89
12. Unemployment benefit replacement rates by duration categories
and family circumstances, 1994 92
iv
13. Replacement rates for single-earner households, 1994 94
14. Incidence and causes of high marginal effective tax rates 97
15. Commencements into selected labour market programmes 103
16. Outcomes of selected active labour market programmes:
three and twelve months after participation 104
17. The incentive to work part-time for an unemployed person
with two children 116
18. Educational participation rates of 17-19 year-olds 132
19. Schools: Age-participation rates 134
20. Upper secondary graduation rates 135
21. Monitoring the Finn targets for 19 year-olds 136
22. Wage and salary earners in training 138
23. School enrolments by type of school 151
24. Earnings by level of education 152
Statistical annex and structural indicators
A. Selected background statistics 198
B. Gross domestic product 199
C. Income and expenditure of households (including unincorporated
enterprises) 200
D. Prices and wages 201
E. Balance of payments 202
F. Foreign trade by commodity 203
G. Foreign trade by area 204
H. Production structure and performance indicators 205
I. Labour market indicators 206
J. The public sector 207
Figures
Text
1. The current expansion compared 17
2. Housing affordability 19
3. Potential output and the output gap 21
4. Contribution to GDP growth 22
v
5. Output and employment 25
6. Labour cost and productivity 28
7. International comparison of consumer prices 28
8. Competitiveness and trade 31
9. The changed inflation environment 38
10. The performance of monetary policy 39
11. Interest rates 41
12. Exchange rates 42
13. Credit to the private sector 44
14. International comparison of long-term interest rates 46
15. National saving and investment 53
16. Net lending 54
17. Commonwealth revenue 56
18. General government revenues and underlying outlays 60
19. General government net debt 63
20. Key features of the labour market 68
21. Labour force trends 70
22. Share of part-time workers in total employment 72
23. Patterns of employment 73
24. Structure of unemployment 74
25. The Beveridge curve 75
26. Real wage, productivity and labour shares: business sector 84
27. Trends in earnings dispersion 86
28. Average and marginal tax wedges in early 1990s 90
29. Summary measures of benefit entitlements, 1961-95 91
30. Apprenticeships: commencements and participation rates 93
31. Net enrolment rates in tertiary education, 1994 137
Annexes
A1. Australian education system 185
A2. Public and private expenditure levels by level of education, 1993 189
A3. Expenditure shares of public and private educational institutions 190
vi
BASIC STATISTICS OF AUSTRALIA
THE LAND
Area (1 000 sq.km) 7 682.3 Population of major cities, 1995 (1 000):
Agricultural area, 1986-87, per cent of total 61 Sydney 3 773
Urban population, 1991, per cent of total 85 Melbourne 3 218
Brisbane 1 489
Perth 1 263
Adelaide 1 081
THE PEOPLE
Population, June 1995 (1 000) 18 054 Civilian employment, 1995 (1 000) 8 217
Number of inhabitants per sq.km 2.4 of which: Agriculture 411
Natural increase, 1995 (1 000) 132 Industry1 1 885
Net Migration, 1995 (1 000) 84 Other activities 5 921
PARLIAMENT AND GOVERNMENT
Composition of Parliament following latest elections:
House of
Party Senate
Representatives
Australian Democrats 7 –
Australian Labor Party 29 49
Independent 1 5
Greens 2 –
Liberal Party of Australia 31 75
National Party of Australia 5 18
Country Liberal Party 1 1
Total 76 148
Present government: Liberal/National Party coalition
Next general elections for House of Representatives: March 1999
PRODUCTION
Gross domestic product, 1995 Gross fixed capital formation, 1995
(A$ million) 470 390 Percentage of GDP 20.4
GENERAL GOVERNMENT SECTOR, PER CENT OF GDP, 1995
Current disbursement 36.2 Current revenue 34.7
Current transfers 14.7 of which: Direct taxes 17.4
FOREIGN TRADE
Main exports, 1994, per cent of total: Main imports, 1994, per cent of total:
Food, beverages and tobacco 21.5 Food, beverages and tobacco 4.5
Raw materials 20.5 Raw materials 2.7
Fuels 16.6 Fuels 4.8
Machinery and transport equipment 11.7 Machinery and transport equipment 46.2
Other manufactured products 29.7 Other manufactured products 41.8
THE CURRENCY
Monetary unit: Australian dollar Currency unit per US dollar, average of daily
figures:
Year 1995 1.3496
October 1996 1.2620
1. Including mining, electricity, gas and water, and construction.
Note: An international comparison of certain basic statistics is given in an annex table.
This Survey is based on the Secretariat’s study
prepared for the annual review of Australia by the
Economic and Development Review Committee
on 28 October 1996.
•
After revisions in the light of discussions during the
review, final approval of the Survey for publication was
given by the Committee on 18 November 1996.
•
The previous Survey of Australia was issued in
May 1995.