The OECD Ministerial Council Meeting in Paris provided the first opportunity for Ministers to discuss the global economic outlook in the immediate aftermath of the war in Iraq. The OECD sees a hesitant recovery in world economic growth, with the upturn now delayed until later in 2003. Growth of only 1.9 per cent is expected in 2003 for the OECD, but is expected to pick up to 3 per cent in 2004.
While recent discussions of the short-term economic outlook have been dominated by geo-political uncertainties, at this meeting Ministers refocussed on the need for structural reform to promote stronger long-term growth.
The discussion pointed to the clear divergence in economic performance between OECD countries, with countries such as Australia enjoying the benefit of economic reform and drawing away from countries that have not engaged in structural reform to the same extent.
The OECD forecasts growth for Australia of 3.2 per cent in 2003 and 3.8 per cent in 2004, underpinning the resilience of the Australian economy through the world economic downturn.
The Ministerial Council Meeting also discussed the fiscal pressures posed by the ageing of the population, again pointing to the need for structural reform to support the growth needed to meet these pressures. In this regard, Australia is well placed compared to most other OECD countries, however it is clear all countries, including Australia, must have in place the policies to deal with the challenges of an ageing population, particularly reform of health care and pharmaceutical benefit schemes.
Ministers reaffirmed their commitment to the Doha Round WTO negotiations. Australia encouraged OECD members to show leadership in building support for the Round, with agriculture being of core importance to the objectives of the Doha Development Agenda.
The OECD Forum provides business, labour and civil society the opportunity to provide their input to government ministers.
The recent attention on the adequacy of corporate governance arrangements in a number of OECD countries was a particular focus of these consultations. Corporate governance reforms put in place by the Government have ensured Australia is in the forefront of developments in this area.
In addition to the OECD meetings, the Treasurer also gave a speech to Australian Business In Europe (ABIE).
Europe remains an important trading partner for Australia and a key source of investment. Growing economic links to Asia makes Australia a potentially attractive base for European countries seeking business in the Asia-Pacific region.
In order for these opportunities to be maximised, all countries need to commit to open markets and ongoing structural reform. Unfortunately in some areas of policy, such as trade in agriculture, Europe has not yet been prepared to fully make this commitment.