Does the OECD know what it's talking about? You bet. It might be a committee of Paris-based outsiders, but it works out what to say by talking to Australian bureaucrats. Officials from the Treasury, the Department of Prime Minister and Cabinet and the Reserve Bank allow it to say in public what they are only allowed to whisper in private.
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The Australian Treasury posts an officer to Paris full time in order to influence the content of OECD reports. It gets a look at (but not the final say over) their wording.
The OECD is concerned that the proposed free market in university fees will not be free at all. If they compete on price it might work, but many of them might not find it in their interest to seem cheap and less attractive.
The OECD says the Abbott government's plan to pull young Australians off the (already modest) dole will have to be watched to make sure it doesn't significantly hurt low-income households. Its plan to increase pensions by only the consumer price index runs the risk of being unsustainable. Eventually the pension will have to be lifted, something not accounted for in the budget's 10-year projections.
Australia's superannuation tax concessions are monstrous (2 per cent of GDP) and pretty ineffective. They are directed to high-income Australians who were always going to save and to the compulsory component of super contributions which were always going to be collected.
And our GST is too low. If it was higher and income taxes were lower we'd put in more hours, something the Henry tax review would have told the last government had it not rigged its terms of reference to prevent it.
It's worth listening to what OECD says. The cone of silence imposed on Australian bureaucrats mean it is one of the few chances we get.
Peter Martin is economics editor of The Age.
Twitter: @1petermartin
