OECD: Australian future viability crashes

From the OECD:


In the past two years, Australia’s viability for the future has dramatically decreased and its need for reform with regards to economic, social and ecological sustainability has increased enormously.

This of one of our findings in this year’s Sustainable Governance Indicators (SGI) by the German Bertelsmann Stiftung. It’s an international monitoring tool which sheds light on the future viability of all 41 countries of the OECD and European Union. On the basis of 136 indicators we assess government actions and reforms. More than 100 international experts are involved in our study.

In comparison with the other developed industrialized nations, Australia is now ranked just 25th in future viability, dropping ten places in comparison with our 2014 survey. It is now 13 places behind neighboring New Zealand and on a similar level to Poland. Thus with regards to the need for reform in important economic, social, and ecological policy fields, Australia is one of the biggest losers in our study this year.

We found major reform needs in many policy areas, including research and development, social inclusion, and environmental policy. Australia must improve considerably here if it wants to secure its future viability in the long term.

However, when assessing the steering and reform capacity of the political system Australia receives above-average scores in our study, ranking 11th out of 41 nations.

Overall, the Scandinavian countries achieved the best results, with Sweden ranking first, followed by Switzerland and Germany. Of the largest national economies, only two G7 nations (Germany and the United Kingdom) are among the top ten. The U.S. moved up one rank, but is still below average. Greece continues to come in last in the comparison among countries.

With the end of the commodity boom, a growing need for reform

In our Policy Performance Index, sharp contrasts were revealed between excellent scores for integration policy and massive deficits in the areas of research and development, social inclusion, and the environment.

One reason Australia scored so well in integration policy is that job opportunities for immigrants are approximately as good as those for native-born Australians. No other OECD country – with the exception of Hungary – does so well in this regard. Our study praises the effectiveness of Australian integration policy, but we also found weaknesses and challenges, including the country’s uncompromising treatment of asylum seekers who try to reach the country by boat from Southeast Asia.

Australia’s increasing need for reform is mainly due to the end of the commodity boom, which has led to stagnation in living standards and a rise in unemployment rates since 2011. We found that with the end of the boom, Australia must develop new growth industries. Manufacturing, tourism, and education services appear unable to fill the gap.

In research and development, Australia ranks just 26th out of 41 countries in our study. Although it provides significant public financial support for research and development, the results are quite disappointing. For example, Australia registers just 77 patents per million inhabitants per year, compared with 335 in top-ranked Japan.

Australia is generally in need of significant public investment to bring its infrastructure to a level comparable to other advanced economies. The price for Australia’s low level of public debt has been inadequate roads, ports, and railroads. Yet the structural fiscal deficit impedes large new spending programs for infrastructure.

Lagging in social inclusion and environmental protection

In social inclusion, too, Australia ranks no higher than the lower mid-table range. The poverty level in the population is 13.8 percent. By contrast, in the Czech Republic or Finland just 5 percent of the population have to manage on less than 50 percent of the median income.

We found that the situation for indigenous Australians in particular continues to be the most serious social failure of the country’s policymakers. There have been numerous policy initiatives over recent decades seeking to address the appalling outcomes experienced by indigenous people, but there is little evidence of substantive progress. Remedying this must remain a priority over the coming years.

Australia also has a lot of catching up to do when it comes to its environmental policy. In the past, the country has addressed environmental challenges haphazardly. Considering the country’s climate, there is much room for the development of sustainable policies on energy and the environment. Transport could be made much greener, for instance by using higher excise duties on fuel to improve too often inadequate public transport systems.

With regard to the governmental system’s general reform and steering capacity, however, our study comes to a positive conclusion: Australia achieves 11th place in our Governance Index. Only the Nordic countries plus New Zealand, Luxembourg, the U.S., the United Kingdom, Canada, and Germany rank higher.

Among the strengths of the Australian governmental system, we found the efficient coordination between ministries as well as the parliament’s role in helping to shape policy and its supervisory competence.

Thus, there are reasons to be confident that Australia will be able to overcome the challenges outlined above. But the country’s performance in our international assessment of policy-making and governance should be a wake-up call.

In short, the corruption of Australia has been noted. Full report.

Houses and Holes
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  1. “We found that with the end of the boom, Australia must develop new growth industries. Manufacturing, tourism, and education services appear unable to fill the gap.

    In research and development, Australia ranks just 26th out of 41 countries in our study. Although it provides significant public financial support for research and development, the results are quite disappointing.”

    Australia is only one of two OECD nations NOT to have an official space program….even though there is a huge space race developing right now across the globe.

    And it just purposefully deep sixed the only industry able to transition to a viable aerospace manufacturing sector…..or indeed anything to do with that other pesky little industry developing, renewable energy.

    The Lucky Country indeed.

    • Jumping jack flash

      Yes, very interesting.

      I remember a while ago there was some talk about starting an Australian space programme, or perhaps it was a comment about the lack of one. I only caught the end of it on the radio on the way to work.

      I believe that if India is launching rockets to the Moon and China is going to Mars then we could at least launch satellites into orbit here.

    • ErmingtonPlumbingMEMBER

      “even though there is a huge space race developing right now across the globe.”

      Yes, and a Space industry allows us to develop a cheaper and far greater “deterrence” than a bunch of sitting duck, diesel electric subs.

  2. Social inclusion, environmental concerns, indigenous issues.

    Seriously? Not one of these is going to hold us back. Our problems are economic: the deficit, the debt and the burden on future taxpayers. The transition to industries/technologies of the future also one to watch. Thank god we’ve got dirt.

    Who writes that OECD stuff, Basketweavers United?

    • Typical obfuscation from the resident astroturfer.

      This is how you do it.

      1. immediately draw attention to the minor aspects of the report that will get the howls up most among the empty vessels out there, usually picking on social justice or racist issues…

      2. then draw attention away to sledgehammer problems that are as evident as the nose on your face, but will make any debate lacking nuance or discussion about complex solutions thereof, and/or conflating a problem with a non-problem (i.e a stock and a flow)

      3. Provide a saviour, a solution already at hand – “thank god (sic) for dirt”

      4. Finally, put a nail in the coffin of the seriousness of the report by going to absurd extremes and slandering the report writers by association.

      Well done Xo.

      I do wonder how you sleep at night, but I’m sure those cheques from the Mineral Council help.

      • So you don’t think our monstrous foreign debt and the fact we have already sold most of our basic industries to foreigners of major concern?

      • Nope didnt say that and you’re playing into his game – the monstrous foreign debt is a sledgehammer problem – obvious, big, and something to hit on, again again and again.
        Selling, supporting and structuring the economy solely around resources will not solve and has worsened the foreign debt problem, because it means nobody gives a shit about developing long term industries where the country can export actual value added things which don’t require selling the farm to finance.

        And because he conflates the small amount of public debt with the ever widening yearly deficit – both of which are not a problem in the short term – public financing of any kind of solution is immediately taken off the table and his industry gets to keep the rent seeking it no longer deserves.

      • Not sure that is quite what xo said or says. Thank God we’ve got dirt….xo comes from a position where everyone reckoned mining was all bad a criticised the participant. In fact Aus would have been totally screwed post GFC without it. Mining is NOT the cause of our woes in regard to other industries. The cause of our woes is our requirement for cheap consumer goods financed by foreign borrowings that are underwritten by the sale of our assets including mining.

  3. Sweden and Germany seem like shining stars according to this report, and yet they are both suffering major social disruption due to the massive influx of third world invaders triggered by Angela Merkel’s lunatic policies.

    A good example of what’s going on may be found here : http://www.independent.co.uk/news/world/europe/sweden-refugee-centre-attacked-rape-disabled-woman-gotland-claims-a7355186.html and there’s lots more like that.

    Ethnic and religious no-go zones, riots, rape and other violent crime, the rise of Trumpist right wing parties in return etc etc.

    Even with all the economic bullshit that goes on in this country, I think I’d still prefer to live here rather than Visby Sweden or Cologne Germany right now.

  4. Examples like the car industry loss are visible, however for anyone who remembers way back in into the 1970’s, the change in the innovation and “making things” culture is even more stark. There was a real sense of optimism that doing useful things was a way to a better future. People valued skills. In 1969 the moon landing was such a marvel that the high school principal send the whole school home to watch it – and that was an ordinary state school in Wynnum, Brisbane.

    Unfortunately, the shift in culture is so extreme that it is unlikely anything will change in less than a generation. It’s not just the housing mess or the population ponzi. The cultural bias towards making stuff has been systematically erased by decades of consumerism and financialization. Since we only seem to get politicians who come from the ranks of lawyers, they don’t even see this. Back in uni days it was like this as well – there were the engineers and the science students, and on the other side there were the law students. No common ground. Well, the law students got to set the agenda of our future.

    • @DM yea it’s interesting to look at these other cultures and see just how many politicians trained as Engineers vs Lawyers, In China there was a period, not so long ago, when most of the elite were trained as Engineers, same goes for Germany lot’s of Engineers at all levels of government. I’m not sure this gives us better policy, as I see it it is more about the stupidest policies getting starved for oxygen because they make absolutely no sense (for the Engineers mind set).

      • I’m not sure if it’s the case in Germany, but in many European countries an economics degree formally entitles one an Engineer.

      • It’s more precise to say that in those countries, engineering training is recognised by a degree with “economics” in the title on the testamur.

    • On top of that is the concerted anti-intellectual and anti-teacher campaign over the last few decades.

      Learning, maintaining and distributing knowledge, in and of itself, have become past-times that are considered, at best, a waste of time.

      Plenty of posters here exhibit the same “those who can, do, those who can’t, teach” mindset. Ie: if you can’t make a quick buck off it, what’s the point ? This relates back to your point about consumerism and financialisation of everything (after all, if something does not have a price, how can it have value).

      • @drsmithy I don’t know much about the anti teaching side of things but wrt general business you definitely dont want anyone knowing that you’re in any way smarter than the average Aussie and never ever let anyone know that you’ve got more than a Bachelors degree, maybe an MBA is OK in some circles but nothing else….better if they dont know that the bachelors is in Engineering or Math or anything like that.
        This is totally different from business in Germany where your intro is more or less where you post-doc’ed and who you’ve worked with…if it aint impressive ..it aint impressive.

        China is bit of a weird mix, little like Japan, in that everyone there has already researched who you are and has a fair idea where you stand on each issue…the job of the junior is to present their proposal so that the most senior eng/scientist can study your reactions and modify what they really meant. ,,,I couldn’t ever imagine this happening in Australia.

        From my limited experience Aussie business is more like Trump’s locker room banter.

      • rob barrattMEMBER

        As I blogged previously, I worked for Bertelsmann (co-author of the report) in the 80s. They were bloody hard working, well organised & (maybe with the exception of me) didn’t hire anyone less than bloody good. They would eclipse anything here.

    • “On top of that is the concerted anti-intellectual and anti-teacher campaign over the last few decades.”

      Well said Dr Smithy, and I used to be one of those “cant do/teach” etc, and I was wrong….

      In fact I’m thinking of becoming a teacher myself in the near future, in all seriousness! (and no, not finance, something more fulfilling like science or maths)

      • Gee CB. I would think long and hard about teaching as a satisfying career, even in maths or science. The crazies are taking over the universities where school education policies are generated. ‘Trigger points’ and ‘safe places’ are the antithesis of what universities are about. That these ideas are not laughed out of court tell you something of the way the future of education is going.

    • Good points DM.
      Anyone else think we ought to demand a degree of scientific literacy from our elected representatives? Perhaps they should pass a science exam before they can get to vote and pick up a pay cheque!

  5. I can´t comment on all the measures but the environmental ones are a wee bit dubious. Not saying that it invalidates the report overall but anybody who claims that the UK or Germany score higher on this measure than France or Italy is at best not measuring what they claim.

  6. lmmao…. lament the results of marginalist economics and flail about wrt dirt and crapification of labour to burnish equities for mates…. huge sigh…..