Following the conclusion of its 2017 Article IV Consultation with Australia, the International Monetary Fund has released the Country Report No. 18/44, ‘Australia: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Australia’, as well as a ‘Selected Issues’ paper on Australia (Country Report No. 18/45).

In their assessment, Executive Directors commended Australia’s robust economic performance during the rebalancing of the economy in the wake of the mining investment boom of the 2000s; helped by a resilient economy and strong policy frameworks. Directors noted that a more robust global outlook, employment growth, and infrastructure investment should help accelerate economic expansion. Nonetheless, while near‑term risks to growth have become more balanced, negative external risks could interact with domestic financial vulnerabilities and pose a threat to the recovery. Directors urged the authorities to maintain prudent policies, continue to address financial vulnerabilities, and raise long‑term productivity.

On the fiscal policy arena, the assessment finds that continued macroeconomic policy support is needed to secure employment and inflation objectives, and welcomes the more supportive fiscal policy stance due to infrastructure investment. Directors concurred that the Commonwealth budget repair strategy remains appropriately anchored by medium‑term budget balance targets, and noted that in the case of a more gradual recovery, Australia has the fiscal space to absorb this risk and protect spending for macrostructural reforms.

The Executive Board noted that the housing policy package could be complemented by tax reform, including a gradual shift to more efficient property taxation through the introduction of a systematic land tax regime, where strong supply‑side policies will remain critical. Directors highlighted that increased infrastructure investment should provide a welcome lift to productivity and longer‑term growth, and that sustained structural policy efforts in promoting innovation and competition, upgrading labor force skills and reducing gender gaps, and advancing broad tax reform would complement these positive effects.

(Source: IMF Press Release No. 18/60).


Comments are closed.