The IMF has endorsed Australias economic management and applauded the Governments plan to reform the tax system.
The endorsements are contained in the summary of the IMFs latest review of the Australian economy, issued today (attached). The Executive Board of the IMF is strongly supportive of the Governments economic policies and structural reforms, including what the IMF describes as a landmark tax reform package and more recent business tax reforms.
In particular, the IMF Executive Directors have highlighted the Australian economys extended period of strong non-inflationary growth, and the remarkable resilience of the economy in the face of the Asian crisis. They also noted that this performance reflected the sustained commitment to sound macroeconomic policies and ongoing structural reforms.
Looking ahead, the IMF Board considers that the economic outlook remains very favourable with continued robust economic growth, inflation remaining under control and a narrowing of the current account deficit.
The IMF Board welcomed the extensive tax reform that is under way, described by the Fund as a landmark tax reform package, noting that it will improve the integrity and fairness of the tax system and reduce its complexity.
The IMF Executive Directors also highlighted the contribution that progress in structural reform had made to the pick-up in productivity growth. Analysis by IMF staff suggests that structural reforms have raised Australias sustainable productivity growth, thereby enhancing the growth potential of the economy. The Board considered that sustained implementation of the structural reform agenda is necessary to build on this performance.
The Government welcomes the IMFs endorsement of its policy settings. The Government recognises that maintaining Australias recent strong economic performance will require continued adherence to sound macroeconomic and structural policies.
Under Article IV of the IMFs Articles of Agreement, the IMF reviews each members economic developments and policies. This review is normally conducted every year. The Public Information Notice issued by the IMF today summarises the main features of the IMF Executive Boards discussion of the Australian economy on 28 January 2000.