ANTHONY ALBANESE SPEECH BRISBANE
Prime Minister Scott Morrison has rejected international calls for the GST to be broadened to drive economic growth.
The OECD in its latest global economic outlook called on the Australian government to boost infrastructure spending because the economy was "growing well below its potential", and there was scope for more debt to be taken on.
More controversially, the report also called for "growth-enhancing tax reforms".
"These include shifting the tax mix away from direct taxes and inefficient taxes like real-estate stamp duty to the goods and services tax and land taxation," the economy body said.
Mr Morrison, who this week released a $3.8 billion plan to fast-track spending on road and rail projects, said his government was acting to help the economy but would not go down the track of changing the GST.
"Australia is facing economic challenges. We've never walked away from that. I acknowledge that openly," Mr Morrison told 3AW radio.
"That's why we put the tax relief in place. That's why we've brought forward the infrastructure spending.
"The OECD and other international agencies have been telling us we should put up the GST. Well, I don't agree with them; we're not going to do that."
The agency expected Australia's economic growth to firm to about 2.25 per cent in 2020/21.
Labor leader Anthony Albanese used a speech in Brisbane on Friday to outline his view that more spending on infrastructure and improvements to productivity are needed.
Despite what he sees as an accumulation of poor economic indicators that "should be jolting us out of complacency", Mr Albanese says he is optimistic about Australia's future provided the settings are right.
He warned living standards would drop if productivity didn't get moving soon.
"With productivity missing in action, that old anchor chain of class and destiny threatens to make a comeback," he told the Per Capita think tank.
"Wages will remain flat and living standards will deteriorate.
"For parents trying to put a bit of money away for the annual beach holiday this Christmas, it is simply getting too hard after paying electricity and childcare bills."
He called for a "productivity renewal project" involving further investment in infrastructure, a tax system that gives better incentives for businesses to invest in themselves, and addressing skills shortages by training more people.
Meanwhile, October's monthly financial statements show further improvement in the budget bottom line, with the deficit nearly half a billion dollars smaller than predicted in April's budget and a $306 million improvement on September's figures.