OECD urges Australia to increase unemployment benefits
The Australian government has been urged to ramp up its unemployment benefits, review the Reserve Bank and increase the goods and services tax (GST) to help pay down massive debt from COVID-19 relief measures, said the OECD in its latest review of the country’s economy.
It predicted that the economy would expand by 4% in 2021, and by 3.3% next year, a downgrade from its May forecast.
It also added that the strict lockdowns in New South Wales and Victoria state are likely to see the national economy shrink over the September quarter. “The current strict lockdowns in these states will result in GDP declining in the third quarter of 2021,” the OECD said.
“In an environment of higher community transmission of COVID-19 and lingering uncertainty, the eventual recovery will remain gradual even when restrictions are eased,” it added.
So far, the government has no intention of increasing the GST. Australian Treasurer Josh Frydenberg told Sky News that “what we do have plans for is, obviously, to cut taxes at every opportunity that we find. And we’ve done that on income tax, we’ve done it on company tax for businesses with a turnover of less than $50 million”.