The world is watching

What will the government make of the recommendations contained within the OECD’s 2021 Australian economic survey, the first since former finance minister Mathias Cormann took the reins? The OECD says Australia’s economy has done well through the pandemic, but warns it could face a slow recovery – something Treasurer Josh Frydenberg did not emphasise in his rush to talk up the good bits. The recommendation that the Reserve Bank should face an independent review – which has not occurred since Australia had $1 notes – has been tentatively endorsed by the treasurer, though it wouldn’t happen until after the federal election, according to the AFR. The government reportedly has no plans to address the recommendation to increase the GST to 12.5 per cent, or to include the entire value of the family home in the aged pension assets test, things the OECD says would help ease debt. It’s unlikely, too, that the government will be willing to increase the JobSeeker rate, which despite a recent increase of $50 per fortnight is still “very low by international standards”, with the organisation suggesting it could be indexed to wage inflation. And what of the calls for Australia to take climate change more seriously, amid warnings that we must massively accelerate our decarbonisation or pay the price? In information that is hardly news to anyone, the OECD warns that declining fossil fuel demand could create shocks for Australian industries, and notes that the nation is “uniquely placed to benefit” from decarbonisation, if it were only willing to take advantage of its natural assets. The report repeatedly laments the lack of a carbon price, “the least cost approach” to reducing emissions, while acknowledging the political difficulties of introducing one here – a bitter pill to swallow for anyone who this week watched SBS’s Strong Female Lead, with its stark reminder of what happened when Julia Gillard did try to implement one. What a shame that Cormann himself once referred to it as a “job-destroying carbon tax”, before voting very strongly to repeal it.

The OECD isn’t the only one heaping pressure on Australia this week. US President Joe Biden is planning to put even more on Prime Minister Scott Morrison when they meet at the first ever summit of the “Quad”– comprising Australia, the US, Japan and India – next week, with the White House to make the climate crisis a key agenda item. (It will no doubt also come up in the leaders’ first ever one-on-one talk.) The Australian speculates that Morrison will bring emissions announcements to the table, something the AFR’s Phil Coorey says is unlikely, adding that the government’s focus is much more on the Glasgow climate summit in November.

That’s the summit where Australia is expected to be “the villain”, at least according to a CNN headline, with a Dutch member of the European Parliament noting that Australia has “the poorest standing on climate” of all the developed countries. This week has also seen a stark new Climate Council report, warning of increased security risks and decreased geopolitical influence for Australia if it does not reduce its emissions, while the defence department’s former head of preparedness Cheryl Durrant has warned that the nation has its “head in the sand” regarding the national security implications, calling for Australia to follow the United States in spelling out the risks. Doctors are urging the federal government to commit to more ambitious emissions-reductions targets, warning that the health of Australians is being put at risk, while farmers want stronger action too.

The warnings are no doubt only going to ramp up ahead of Glasgow, though there is nothing necessarily new contained within them. These sentiments have been aired since back when Secretary-General Cormann was in a position to actually do something about them. It’s become increasingly clear that Morrison is going to have to bring something firm to the table within just a few short weeks, after seven months of talking up net-zero carbon emissions “as soon as possible, preferably by 2050”. On Monday, Nationals leader Barnaby Joyce indicated that “certain ideas have evolved” when it comes to striking a deal on net zero, though he refused to give any details about what those ideas might be. What the Liberal Party plans to trade away to finally be able to commit to that lacklustre target remains to be seen. The OECD survey, unfortunately, was silent on such recommendations.

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