2021 Owen Harries Lecture - Mathias Cormann

2021 Owen Harries Lecture by Hon. Mathias Cormann, Secretary-General of the OECD

Thank you to the Lowy Institute for your invitation to deliver this year's Owen Harries Lecture on 'Levelling the playing field - an agenda for growth, climate, and a rules-based international order'. Owen Harries - and Michael just touched on it very warmly - he was an intellectual giant. A prolific and insightful writer, a diplomat, an adviser, who is credited as one of the architects of Australia's modern foreign policy. And as founder and editor of The National Interest and in his numerous contributions to foreign policy debates, he challenged governments, policymakers, academics and citizens to think critically about the future. Which is observed as 'something which has still to be made'.

In this spirit, I think it is fair to say that Owen would have been among friends here at the OECD. Our members and partners come together to collaborate, to learn from each other, and to exchange and develop best practices that empower them to thrive in an increasingly uncertain future. For the past 60 years, the OECD has unequivocally been a force for good in the world. And it has been a force for good in Australia, which this year celebrates its 50th year as a member. The OECD was set up as an organisation to facilitate cooperation among its like-minded members to achieve the highest sustainable economic growth. Our core purpose and our Convention is the preservation of individual liberty, and to increase economic and social well-being. We aim to help drive the further expansion of global trade. And across international organisations we have a unique expertise and a proven working methodology providing comparative data and policy analysis, promoting policy best-practice, and setting standards to facilitate greater cooperation and interoperability.

Our members work together to defend and promote shared values and principles: a commitment to democracy, human rights, the rule of law, market-based economic principles, and a rules-based international trading system. We help our member countries - and interested countries all around the world - to deliver better policies for better lives, building on those values. Indeed, we engage with other international organisations and fora and with non-member countries, especially developing and emerging economies, to broaden and to advance the beneficial impact of our policy values and principles. This was also envisaged in the OECD's Convention, which recognizes the importance of collaboration with, and support for, countries beyond the OECD membership. The issues and specific policy challenges that the world faces necessarily evolve over time. And the OECD continues to adapt in response. But our capacity to help find solutions and better ways forward together remains. Because our shared values and principles have guided us through good and more challenging moments throughout our history. But they have stood the test of time. And they are now also underpinning the OECD's efforts to help the world rebuild after the COVID-19 crisis. Our best-practice standards - covering taxes, investment, corporate governance, anti-corruption and integrity, small and medium-sized enterprises financing, state-owned enterprises, responsible business conduct, consumer policy, digitalization, development finance - to name but a few - are one of the major tools which our shared values are given meaning and promoted around the world. They provide the founding pillars of the rules-based international system, and they help level the global playing field.

And they chart the course to tackle major emerging challenges and advance key global priorities such as quality infrastructure in developing countries. They support international exchange, and they do support the sustainable expansion of global trade and investment. They formalize agreed best practices, ensure coordination, shared responsibility, and improve collective outcomes where multilateral action is required. They frame our cooperation with other organisations seeking to level the global playing field, including the World Trade Organisation with which we work closely on many issues central to a rules-based trading system. From subsidies and resilient supply chains, to excess capacity and digital trade. Crucially - very importantly - the OECD has also developed mechanisms to hold countries to account against our standards, and to ensure they follow through with timely implementation of their commitments. But it is not only our standards that matter when it comes to ensuring all countries play by the rules. The five billion data points and supporting analysis that the OECD delivers every year on many issues - education, health, productivity, pensions, many others - is shining the spotlight on areas where individual countries are leading by example, and where others can be challenged to do better. The OECD data and analysis provides example after example of policies that work and just as importantly, those that don't. The OECD's work then is an impetus for action and a guiding light for reform.

Our work to measure government support in agriculture, fossil fuels, fisheries and industrial sectors is a case in point. This work holds up a mirror that shows governments and their citizens the nature and scale of support and what needs to be done about it. And the results of this work can be quite stark. We've shown that global support - global public support that is, government support to agriculture in 2018 to 2020 reached $720 billion US annually, with all of the distortions that come with that. We've revealed the nature and scale of government support in the aluminium and semiconductors sectors. We've highlighted that support for below-market finance is prevalent in 13 key industrial sectors across the globe, including those affected by excess capacity. And we've confirmed the need to redouble our efforts on competitive neutrality by showing that firms with more than 25% government ownership receive more government support, distorting market outcomes skewing private investment decisions, and consequently reducing growth opportunities. This transparency is the critical first step to reform to make global trade and investment free and fairer.

In the coming years, we must continue to protect, promote and advance the OECD's work as we confront the economic and social scars of the COVID-19 pandemic. This means focusing on both the immediate, and the medium to long-term priorities. Let me highlight five key areas.

The first: we are working with member governments and stakeholders around the world to help optimize the strength and the quality of the recovery from COVID-19. Global economic growth has picked up this year and the outlook continues to improve - though, the recent emergence of a significant fourth wave across parts of Europe shows that serious downside risks remain. Strong fiscal and monetary policy responses, the ongoing vaccination rollout, the gradual resumption of economic activities as restrictions are eased, and the accelerating digital transformation of our economies have all helped - with the OECD now projecting global GDP growth to reach 5.7% in 2021, and 4.5% in 2022. The economic outlook is also improving in the Asia-Pacific, where we expect growth of 7.4% across ASEAN, China and India in 2021. And though, with vaccination coverage lagging in some areas. That hampers growth prospects. Growth prospects are also hampered by restrictions and disruptions to trade and mobility. Such developments risk causing longer-term scarring for workers and companies. Across the world, new outbreaks of the virus remain our biggest risk. We need to continue to pursue an all-out effort to reach the entire world population with vaccines as quickly as possible. And it's great to see that after a somewhat slower start against the backdrop of very low infection rates in Australia, Australia is now doing exceptionally well on this front. As a result of the massive ramping up of vaccination over the last few months, more than 84% of eligible Australians are now fully vaccinated, which is highly competitive at a global scale. But no country will be appropriately protected until every country is appropriately protected. In the meantime, policy support should remain flexible, adjusted to the evolving health and economic situation. Though the composition of that support must be better targeted to those in genuine need and towards future-focused investment, particularly into our green and digital transitions and into infrastructure. Open markets, a strong competitive framework, a system which rewards the most productive and innovative business ideas and encourages investment in future growth and success will lead to quality job creation and the lifting of living standards. All OECD members, in fact all export-oriented trading nations, including and in particular Australia, have an interest in strengthening the rules-based multilateral trading system with the WTO at its centre. We also must redouble our efforts to promote equality of opportunities and to foster genuine social mobility, including by restoring and boosting opportunities for women and youth who are particularly severely impacted by the pandemic, those with low skills, those caring for children or the elderly, and those who are sick.

Second, we do need to continue to drive and promote global leadership and ambitious and effective action on climate change. While emissions across OECD member countries peaked in 2007, there is much more work to be done. Earlier this month, I was at COP26 where the need to accelerate global policy action to match climate commitments was obviously very stark. And it's great that more and more countries including Australia have committed to a net zero emissions target by 2050. However, ultimately, it will be real outcomes and not commitments that matter. And to be truly effective in helping to reduce global emissions, climate action needs to be globally coherent and better coordinated. To better inform the necessary decisions along the way, we need better data on comparative cost effectiveness and impact of different policy approaches. This is why the OECD established our new International Programme for Action on Climate (IPAC), which I committed to operationalize in my first 100 days in office, which we have been able to achieve. IPAC is complementing the work of the UN Framework Convention on Climate Change by helping participating countries track and assess their progress against commitments and improve their climate action plans through targeted policy advice, and comparable indicators. Importantly, this is also why we have proposed to replicate the successful OECD/G20 Inclusive Framework approach, to help achieve our mission of global net-zero emissions in a way that is globally effective and fair. Effective, in that ambitious efforts in individual jurisdictions actually help reduce global emissions instead of simply shifting emissions to other parts of the world. And fair, in that every country around the world carries an appropriate and proportionate share of the burden. The challenge is to ensure the level of ambition and effort in individual jurisdictions can be lifted to the level required while maintaining a global level playing field, avoiding counterproductive trade distortions, and carbon leakage. An appropriately comprehensive multilateral process could help facilitate, over time, an appropriately ambitious multilaterally-agreed, internationally more coherent and globally better coordinated approach to the pricing of emissions. If OECD data and analysis of policy effectiveness has taught us anything, it is that differing economic circumstances often call for different policy approaches. Our aim should therefore be to create an objectively comparable basis to assess and report on the equivalency of mitigation efforts using different policy levers to reduce emissions, taking into account both explicit and implicit carbon pricing efforts around the world. We need much better data tracking of the cost and outcomes achieved through various measures, to help better inform judgments about a globally more coherent approach to climate action. Regular transparent reporting of effort, cost and impact using different policy approaches from explicit to implicit carbon pricing will help inform better decisions and over time, I believe, an internationally more coherent approach. This is an approach which would complement, not substitute, for other initiatives to address the risk of trade distortions and carbon leakage from the lifting of ambition in individual jurisdictions. I believe it can and should be pursued in parallel with other relevant measures that are designed to address the same negative spill-over risks. It's also important to remember that securing the transition to net-zero emissions is not a job for climate policies alone. We need a carefully sequenced and coordinated fiscal, financial and structural reform package with the whole spectrum of public policy kicking in the same direction.

The third priority area relates to the digital transformation of our economies. We need to seize the opportunities of the digital transformation of our economies while better managing the risks, challenges and disruptions associated with it. The pandemic has further accelerated what was already a rapid pace of digital transformation. For example, business surveys worldwide tell us that up to 70% of small and medium-sized businesses have intensified their use of digital technologies due to the pandemic. And of course, there's been a massive ramp-up in teleworking, and indeed e-commerce. The OECD's latest broadband data shows that more than 21 million new fixed broadband connections were added in the year to end December 2020. The digital transformation brings immense benefits to economies and to societies. Yet such benefits come, inevitably, with new and evolving and growing challenges. Today, large gaps remain across and within countries - by region, by firm size, by gender, and between many socio-economic groups. We must ensure appropriate and equitable access to digital infrastructure. We must invest in skills development, and plan for the future of work to ensure that people, firms and places are not left behind. That all have the best possible opportunity to participate and benefit from the digital transformation of our economies. We must also effectively address competition issues and advance work on cybersecurity, privacy, cross-border data free-flow with trust, tax policy implications, as well as setting values-based standards, for example on the use of artificial intelligence, ensuring it is human-centric.

Related to this, but as a fourth point: we need to swiftly and effectively implement the recent historic agreement to make our international tax system fairer and work better in a digitalized and globalized world economy. Tax is one of the most high-profile recent examples of the OECD's efforts and impact to level the global playing field. 137 members of the OECD/G20 Inclusive Framework on international tax - representing more than 90 percent of global GDP - have agreed a landmark deal to firstly, reallocate more than $125 billion worth of profits from around 100 of the world's largest and most profitable multinationals to the markets where they operate and generate profits. And secondly, establish for the first time a globally agreed minimum corporate tax rate of 15 percent, which will help generate about $150 billion dollars US per year in additional revenues. These rules will ensure that large multinationals pay a fair share of tax, and update the international tax rules for the 21st century. Importantly, the agreement also paves the way for a pause and rollback of digital services taxes and other similar measures, which had been the source of trade tensions - counterproductive trade tensions. We now focus on implementation and on ensuring that all 137 countries and jurisdictions are ready to meet the ambitious deadlines we've set for ourselves, to help bring these rules into effect from 2023 onwards. Twenty members of the OECD/G20 Inclusive Framework are from the Asia Pacific, and the OECD's multilateral tax centres in China and in Korea are providing capacity-building support to help officials across the region implement this two-pillar agreement.

Finally, we need to continue to disseminate and promote - advance - OECD values, principles and standards across the world, particularly across the Asia-Pacific and Africa. The purpose of the OECD's global engagement is to facilitate policy dialogue and knowledge exchange and to contribute multilateral solutions to the global challenges of our time. At the OECD's ministerial council meeting last month, we took an important step forward to strengthen our global reach, relevance and impact through our new OECD global relations strategy. Our strategy will enhance our engagement with partner countries through our regional and country programs, as well as our key partnerships with five large, emerging economies: Brazil, China, India, Indonesia and South Africa. Complementing this, we have deployed a new strategic framework to guide our cooperation with China guided by the OECD's core values, which we're building on to shape our engagement with other countries and regions. The OECD also serves as a trusted partner to the G20, G7 and APEC. Through our close partnerships with these fora, the OECD is informing the global economic agenda in areas requiring international cooperation. And not only by strengthening the global tax rules, which I mentioned earlier, but also by promoting the anti-bribery convention, addressing overcapacity and market-distorting practices, and advancing global discussions on gender equality and women's empowerment among other critical issues. Our engagement has also led to breakthroughs in the dissemination of OECD standards. For example, all G20 countries have signed on to the G20 Artificial Intelligence principles, which are drawn directly from the OECD. We are also leveraging the collective influence of the G20 to encourage emerging and developing countries to move closer to key instruments, such as the anti-bribery convention and the OECD codes of liberalisation of capital movements. We are working closely with Indonesia ahead of its 2022 G20 presidency, and with Thailand as the 2022 APEC host, to support their respective agendas and bring Southeast Asia and the Asia-Pacific more broadly, closer to the OECD.

Michael, let me finish on the issue of OECD enlargement. In pursuit of a more level global playing field, it's in the interests of OECD members to have more countries commit as fulsomely as possible to our OECD values, principles and standards. We continue to encourage and promote the adoption of our standards by non-member countries. But OECD membership is ultimately the most direct and the most effective way for us to ensure the most comprehensive application of our shared values, principles and standards across the larger part of the world, which of course, is critically important to help level the global playing field. Accession to the OECD has been positively transformative for those who have joined over the past decades, and it has increased our global reach and impact for the benefit of our collective membership. As such, I believe that any market-based democracy, which shares our values, is prepared to commit to our high standards and submits a genuine expression of interest to join the OECD should have the opportunity to make its case. The OECD is currently considering applications from six countries - in alphabetical order: Argentina, Brazil, Bulgaria, Croatia, Peru and Romania. To open accession discussions, the roadmap to potential membership, and the ultimate decision on membership are all matters for OECD member countries to decide in-council. However, over coming months, I hope to be able to facilitate a process that will get the technical assessment process of those applications underway. This will of course, also then be the opportunity to provide advice to those applicant countries on where they need to further lift their standards and their performance in order to be able to join our organisation at the end of the process.

Michael, distinguished guests, all of these priorities are crucial to level the global playing field. We're covering a lot of ground. We've covered a lot of ground today, and I could keep going. But now it's over to you. Let me close by returning to Owen's sage observation: "The future is something which is still to be made, and how it is made, and what it will become, will depend on people like you, here and throughout the world." You can count on the OECD's continued support as we strive to chart the course for a better future together. It has been my absolute honour and privilege to deliver today's Owen Harries Lecture. Thank you again to the Lowy Institute for this opportunity. Thank you.

In Conversation: Mathias Cormann speaks with Michael Fullilove

MICHAEL FULLILOVE: Mathias Cormann, thank you for a very interesting Harries Lecture. You're right, you covered a lot of ground, I want to go over some of that ground in the questions, but also cover some different ground if I can. Let me start with a reflective question, if I can. You had a very successful career in national politics, and now you've moved into international politics. So I guess a lot in your life has changed. I'm sure the commute from your apartment to OECD headquarters is a lot simpler and quicker than your commute from Perth to Canberra, for example. But what are the similarities and differences that you reflect on between national and international politics? To what extent is the skillset of an Australian parliamentarian relevant to being the Secretary-General of the OECD?

MATHIAS CORMANN: Well, firstly, yes, my commute to the office now is four minutes instead of four hours. That certainly helps. Look, as a member of an executive government, you're focused every day on making the best possible decisions to set your country up for the strongest, best possible future. And, the work that you do in national politics, well, the work that I've done in national politics has been an incredibly useful preparation for the work I'm doing now. I mean, I'm now engaging with governments around the world understanding very well some of the challenges that they're facing, understanding very well some of the constraints they face in the way they need to make their decisions. But I've got, I guess, I've got the luxury now of being able to think more freely, without having to be too directly concerned about the immediate political execution.  I guess I can think more freely about what would be the ideal way forwards, then engaging with member governments and respecting the fact that member governments, elected governments of the day, have to make judgments on the realistic political timetable within which necessary and important reforms can be pursued. So look, I see it really as a continuum. In Australia - I've given my absolute best every single day. But, you know, obviously, you learn a lot by doing what you're doing. And it was incredibly good preparation for what I'm doing now.

MICHAEL FULLILOVE: There was a lot of politics, obviously, for you to be elected Secretary-General of the OECD. It was a contested election, it was a difficult election, you were not the favourite to win. You always had a reputation for being good on detail, and pretty good at doing the numbers. But tell us about the experience of running for that kind of election, which is different from a national election, where you're going to capitals, and you're trying to make an argument to them. Tell us about that experience?

MATHIAS CORMANN: Well, look - at the time, there were 37 member countries, 26 of them in Europe, 22 of which were European Union countries, 11 outside Europe. So when you're nominated by a non-European country - if you just look objectively at the numbers of you know, where we are, the votes, so to speak, are, then I can understand why people take that view. But , you know, in the end, you know, the way I experienced the process is that governments around the OECD, were very focused on choosing on merit the best person for the job. And the truth is there were 10 high quality candidates who all had a very strong track record of performance in their respective fields. But, you know, in the end, I think that what I was able to bring to the table compared to others, was one, substantial domestic policy experience. But also, I guess, the combined background and experiences of somebody who was born in Europe, grew up in Europe, educated in Europe, but then pursued a professional career, a political career, in Australia and across the Asia-Pacific. And I think there was a view that in all of the circumstances that - in the end, the decision was made that I best matched what members were looking for. And of course, I'm very grateful for that.

MICHAEL FULLILOVE: Alright, let me ask you about some of your priorities as Secretary-General. You charted these big five themes, and I'll come back to some of those. We asked our audience to submit questions, and I have one question from Judy Schneider. Judy asks, what changes would you like to make to the OECD so that it can better perform its mission? Now, you mentioned enlargement, so the membership of the OECD. But you're a restive mind - you've been with the organisation now for some months. Have you noticed some things about the OECD that you would like to change so that it can fulfill its mission of better policies for better lives?

MATHIAS CORMANN: Well, people often ask me the question what do you want to change at the OECD? And I've got to say, I think the OECD is an amazing organisation - both in terms of the values and principles that we are custodian of, as well as its core working methodology has really stood the test of time. I'm a great believer in the power of freedom and free enterprise and open markets, improving economic and social well-being on the basis of open markets, market-based economic principles, but also facilitating social mobility and equal opportunity. And these are all things that the OECD stands for, and that we focus on. In terms of the methodology, we are a platform for cooperation. We have a fantastic convening power bringing countries and stakeholders together to think through issues and find the best possible ways forward. And of course, we have this capacity where we provide this comparative data and policy analysis, best practice advice, and we set standards. Now in terms of all of those fundamentals, I think that these are values and tools that we have to preserve. Now, the challenges and opportunities evolve over time. And right now, our challenges are how we can optimize the strength and the quality of the recovery post-COVID, how we can lead an effective response to climate change, how we can best manage the digital transformation, how we can ensure that we have well functioning global markets in the context of pressures on our trading system before the pandemic but still now, and how we can engage better with even more areas of the world. Now, that means that in terms of your organizational line-up, you've got to ensure that you've got the skills and the capabilities that best enable you to meet those objectives and to deliver on those priorities. But I don't see a need for substantial wholesale change. In fact, often I think it's as important to be very mindful of all of the things that you need to preserve and not change, as it is to think about the things that might need adjusting. I mean, to the extent that there is adjustment, I think it is evolutionary, and at the margins, not sort of fundamental reshaping.

MICHAEL FULLILOVE: Alright, Mathias, you mentioned that more than 130 countries have signed up to a global minimum tax rate for big business. I'm sure there are armies of tax lawyers around the world that are licking their lips at the work that they have in front of them. How confident are you of implementing that policy?

MATHIAS CORMANN: Well, look, I'm quite confident. The difficult part of this process was to get 137 countries to agree. And indeed, you know, we ended up with 137 countries representing more than 90 percent of world GDP, but also every G20 economy from the US, across Europe, to China, India, Russia, South Africa, Saudi Arabia, and indeed every European Union country on board. Importantly, this is not about eliminating tax competition. There is, of course, an important space for tax competition, but it puts a multilaterally agreed limitation on it. And, we do believe it will make the global tax system fairer and work better. Given that, you know, increasingly because of digitalization and globalization, too many of the largest, most successful companies were able to restructure their affairs such to pay very little or no tax on the profits that they've generated in markets around the world. So there was a real inequity, there were some real distortions that had to be addressed. And our deal addresses them. And you see, if a particular country doesn't implement this deal, they're just harming themselves. Because other countries now have the right and the power to raise revenue of up to at least 15% on relevant profits generated. So if you don't give yourselves a tool to do that yourself out of your own country, you leave money on the table for other countries. So I do believe it will be effective. And I do believe that there is an interest, a self-interest for countries around the world to implement this consistently.

MICHAEL FULLILOVE: Mathias, let me ask you - the OECD is an organisation of market-based democracies, largely like-minded countries. I know that the OECD itself probably doesn't have a direct role in meeting the challenge posed by a rising China. But you are mixing with officials and elected officials from like-minded countries all the time. Do you detect in those meetings, a focusing of the mind on China? Do you detect a change in the way European countries are thinking about China, for example, from thinking of China really as a market opportunity, to thinking of China in a more 3-D way as a strategic actor and potentially a threat?

MATHIAS CORMANN: Well, look. Firstly, China is, of course, a significant market. It's now the world's second biggest economy. It's the biggest trading partner to a growing number of countries around the world. And so of course, you know, countries around the world have an interest in having the best possible relationship with China. And there are also issues, you know, whether it's climate change or international tax, or a series of other issues that can only be effectively addressed by having all of the major and minor players around the table. And an issue like climate change will only be able to be addressed effectively if the US, China, India and others are around the table. So there's a whole range of areas where it is very clear that we must find ways to effectively cooperate. Now, having said all of that - yes, the OECD is an organisation that brings together market-based democracies that share a commitment to democracy, human rights, rule of law, market-based economic principles. And the political and economic system in China is different. And inevitably, there will be pressure points from time to time. Now, the key is going to be, to work through those in as positive and constructive a way as possible. But also to be very clear on, you know, where it is important to stand up for our interest and to draw lines in the sand. And well I think that that's going to require appropriate balancing, you know, for some time to come. I mean, ideally, we will end up with an appropriate, sustainable accommodation in the context of an international rules-based order, where we can continue to live together harmoniously, peacefully and pursuing the further expansion of global trade to mutual benefit.

MICHAEL FULLILOVE: Mathias, you spoke a lot about climate change. Let me ask you about Australia, if I can. As you mentioned, Australia has now committed to net-zero emissions by 2050. But we still don't have a particularly ambitious 2030 target. Would you have liked to have seen countries like Australia take more ambitious targets to Glasgow?

MATHIAS CORMANN: Well, look, the key is to move the world to global net zero by 2050. And we do need to have credible and realistic transitions there. But you know, we also got to recognize that different parts of the world face, and have different starting positions and face different circumstances and find themselves in a different economic context. And I think it is very significant that Australia has committed to a net-zero emissions target by 2050. And there is a transition pathway now underway. I mean, Australia historically has a track record of not just meeting but exceeding its emissions reduction targets. It's met and exceeded its Kyoto targets. You know, as I understand it, Australia is on track to meet its 2030 emissions reduction targets, which on a per capita basis, is one of the steepest targets around the world. But look, I mean, you know, I think it's always important to be more ambitious, but it's even more important to be able to deliver the outcomes. And the outcome that we need the world to deliver is global net-zero by 2050. And in that sense, we've got to continue to make decisions that help reduce the global problem. That don't just shift the problem from one jurisdiction to other jurisdictions around the world. And I mean, Australia, compared to Europe is a comparatively small domestic economy, it's export-oriented, a trading nation, but it's also an export-exposed trading nation, surrounded by comparatively lower costs, higher emissions-intensity manufacturing competitors. And, you know, these are all things that you need to consider when you make your policy decisions as Europe is now of course, considering the risk of the competitiveness implications and carbon leakage risks in the context of its discussion on the carbon border adjustment mechanism. I mean, we need Australia to reduce emissions in a way that helps reduce emissions for the world. We don't need Australia to reduce emissions in a way that shifts those emissions along with activity and jobs into the neighbourhood where, for the same level of output, emissions would be higher. The worst thing in terms of our overall objective would be if Australia were to make decisions that shift activity, jobs and emissions into other parts of the world where emissions are going to be higher and the global emissions outcome would be worse. I mean, that's been my consistent argument, incidentally. And that is why I'm very much, from this position, trying to help drive a globally more coherent, globally better coordinated approach to the pricing of emissions. Because that is the only way you ultimately can use that tool to help drive effective emissions reductions globally.

MICHAEL FULLILOVE: Alright, Mathias, let me ask you about COVID. Vaccine take up is very strong in countries like France, and you mentioned Australia, but of course there are huge parts of the developed world where vaccination is not going to take place for a very long time. As you sort of intimated, I think, in your lecture, none of us really safe until all of us are safe. Shouldn't OECD members be doing a lot more to vaccinate the developing world?

MATHIAS CORMANN: Well, I mean, OECD member countries are doing a lot. But it is true. I mean, the challenge is, you know, a logistics and distribution challenge, which should shouldn't be beyond us to resolve. I mean, you're right. There's a particular challenge in developing economies. But there's also - perhaps not as well known - a pretty significant challenge across a large part of Europe. I mean, yes, France, Belgium, Germany, you know, countries in Western Europe have got relatively high vaccination rates. But if you look at Bulgaria, Romania, some of the Central European countries, vaccination rates are quite low. And the fourth wave that is going across everything east of Germany at the moment, it's pretty significant. Now, look, yes. I mean, the short answer to your question is yes: developed economies have a responsibility to do more. It's not just charity, either. It's - it's self interest, because we won't have sustained health protection until such time as we've got a properly comprehensive global coverage of vaccinations. And, we want I mean, the economic recovery will remain at risk until such time as we've got appropriate coverage, global coverage of vaccinations. And in the end, our biggest risk continues to be further waves of infection.

MICHAEL FULLILOVE: Let me ask you about Australia's approach to the pandemic, the 'Fortress Australia' approach certainly kept Australians safe. But there were significant downsides to that. We more or less locked off the country for the better part of a year and a half. I think the effects of the policy were felt very much by immigrants to Australia, who weren't able to visit family overseas; expats, members of the Australian diaspora of which you are now a member. How do you feel about the approach that Australia has taken to dealing with the pandemic?

MATHIAS CORMANN: Look, I mean, I don't think that given my history, and given my current position that I should be a commentator on domestic politics in Australia. I mean, let me just say that countries around the world, governments around the world, were faced with an external shock for which there was no rulebook on how to deal with it. Governments around the world made the best possible decisions by way of crisis response. I think that Australia performed very well in that context. In the end, I mean, these are judgments for democratically-elected governments to make, and I guess, as a citizen, the observation I would make is that, you know, the governments that have been subjected to democratic scrutiny at an election since the pandemic, and since the sort of response has been, you know, rolled out in Australia have all done very well. So it appears to me that the population in Australia - in the broad - is supporting the government's responses in the broad. Now, I mean, moving forward, of course, I mean, we want to move into a world where we can live with the virus, where we can manage the risk of the virus, while returning to as close as possible in a COVID safe way. And that's where a high vaccination rate is so important. I mean, Australia now has a vaccination rate approaching 85 percent of the eligible population, which is tremendous. And that will be the key to help, I guess, return life back to normal. I mean, having the east coast now open for returned travellers without quarantine, for returned vaccinated travellers without quarantine, obviously shows what is possible when you have appropriately high vaccination rates. And I do hope that Australia can remain comparatively COVID safe.

MICHAEL FULLILOVE: Now Mathias, I know you don't want to get into Australian politics, but I do want to ask you about immigration, if I can. And it's a question actually from my chairman, Sir Frank Lowy. He's a believer in immigration. And I know you've had a remarkable immigrant life really, immigrating to Australia in your mid 20s, playing a significant role in our national politics, and then going overseas to represent Australia, as it were, as the head of an international organisation. It's a testimony to you but also, of course, to the Australian society that is open to immigrants in that way. The question I have for you from Sir Frank Lowy is this: during the pandemic, immigration to Australia essentially stopped. Do you think that Australia should now boost its immigration intake to make up for the immigration pause we've just experienced?

MATHIAS CORMANN: Well look, you know.... Firstly, I'm a great believer in, you know, the beneficial impact of migration. I mean, Australia is an incredibly successful multicultural society, which has been able to successfully integrate successive waves of migrants from all corners of the world. And my message to migrants, in my first speech, in the Senate, in the Australian Senate was that Australia is a country where if you put your shoulder to the wheel, and if you come with the right attitude and have a go, you know, there's really no limit to what you can achieve. And it's genuinely true, because I mean, Australians are very open-minded, very welcoming. And really - just look at what you do and not at where you come from, or what your background is - a very, very open and welcoming society. Look, the specific decisions in terms of level of migration - these are going to be judgments for the Australian Government to make, but as a principle, of course, I mean, I'm very supportive of strong levels of migration. I think that migration has served Australia very, very well. I mean, in terms of the economic and social development of our country.

MICHAEL FULLILOVE: Can I ask you Mathias - you're a rare Australian, in running an international organisation. And your election reminded me that there haven't been that many Australians running for, and winning top international jobs. Why do you think that is?

MATHIAS CORMANN: I don't know. I mean ... the Prime Minister asked me whether I was prepared to put my hand up for this vacant position at the OECD. After some thought I said yes. And, you know, we worked as a team, there was a Team Australia effort to try and secure the position. And I was very grateful for that support. And as a team, we were ultimately successful. Now, I mean, I think it's really a case by case proposition. I mean, I think that Australia, and Australians have a lot to offer. And it really just depends on the opportunity, and making sure that when it arises that you give it your best possible shot.

MICHAEL FULLILOVE: All right, final question, Mathias. I've mentioned this - the journey you've had in your life. Moving from the heart of Europe to Perth, and now traveling back to the heart of Europe at the OECD. And you mentioned that in your, in your campaign, you were running as an Australian, of course, but someone who'd grown up with Europe, someone with a European heritage. Do you find now that you look at Europe through Australian eyes?

MATHIAS CORMANN: I've got to say - so I left Europe in the early 90s. So, shortly after the fall of the Berlin Wall. Shortly after, I guess, you know, Central and Eastern European countries opened up. And to come back 27 years after I first went to Australia, and to sort of see how those parts of Europe which were behind, on the other side of the Iron Curtain have developed and gone in leaps and bounds forward. It's just really heart-warming. I mean, it just shows - it's such a case study, again, long term case study - which shows that market-based economic principles work - in lifting living standards and quality of life. Political choices matter. Democratic governance matters. And indeed, market economic principles work. I mean, I was in Warsaw yesterday, to mark the 25th anniversary of their membership of the OECD. And over the last 30 years since Poland regained its freedom and opted for democracy, they've just really gone in leaps and bounds forward. I mean, their GDP per capita has quadrupled over 25 years. And, it's - to see the transformational power and the impact on the quality of life of real people all across Europe and across the world of the values and principles that we as an organisation stand for is just, it's just really heart-warming.

MICHAEL FULLILOVE: Mathias Cormann, thank you for joining us from Paris today, for delivering the Harries Lecture, and for taking my questions. You have an exceptionally interesting job and we wish you well.

MATHIAS CORMANN: Thank you very much, Michael.