OECD urges Australia to expand GST, cut emissions, and boost social housing ahead of budget
January 22, 2026
The OECD has urged Australia to broaden its GST, cut greenhouse gas emissions, and set stronger social housing goals. This advice comes before the federal budget in May by Finance Minister Jim Chalmers. According to the OECD's annual survey, Australia's economy is "now normalising" after slow post-pandemic growth. Lower interest rates and rising household incomes are expected to boost growth to just over 2% in coming years. However, persistent issues like slow productivity, high housing costs, and high emissions need action. The OECD highlighted the housing crisis, saying it causes overcrowding, financial strain, and longer commutes. They support easing land restrictions and increasing housing density to improve supply. They also recommend replacing state property stamp duties with a land tax and increasing social housing funding, noting social housing now forms about 4% of Australia's housing, down from 6% in 1990 and below the OECD average. Led by former Australian finance minister Mathias Cormann, the OECD called for "expenditure restraint and revenue enhancing tax reforms". It suggested expanding the GST base and possibly raising the rate above 10%, which could grow the economy by 1.6% over ten years and reduce reliance on personal income tax. On emissions, the OECD said Australia is "broadly on track" for its 2030 climate goals but must do more to cut transport and agricultural emissions. They noted Australia’s past lag on climate action and high per capita emissions but recognized recent progress in energy transition policies. The report recommended a gradual increase in petrol taxes, currently well below European levels, to encourage low emission vehicle use.
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Tags:
Oecd
Australia Economy
Gst
Greenhouse Emissions
Social Housing
Tax reform
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