The OECD says the pace of structural reform among governments has slowed over the past two years in subdued growth environment.

The OECD has backed the Australian government’s push to enhance investment in infrastructure to ensure the economy’s generally good economic performance can be sustained in the long run.

In a new report, the Organisation for Economic Cooperation and Development also calls for investment in skills to boost labour force participation.

On the eve of the Group of 20 finance ministers and central bankers meeting in Sydney, the Paris-based institution released its latest Going For Growth report that reviews the main challenges facing member and non-OECD economies.

Each year since 2005 it has made recommendations for structural changes, while taking stock of the progress made in the past two years.

“Governments have continued to make progress on many fronts despite the challenge of reforming in a subdued growth environment,” its latest report says.

“The pace of actions taken in areas covered by OECD policy recommendations has slowed somewhat over the past two years but remains overall well above the pace observed before the (global financial) crisis.”

On Australia, it notes that as the mining boom recedes, economic growth has eased and the economy is rebalancing away from the resources sector.

But productivity gains have also slowed in recent years to a level below that of leading OECD countries.

“Reforms to enhance investment in infrastructure and knowledge-based capital as well as to boost labour force participation would help to ensure that Australia’s good economic performance can be sustained in the long run,” it says.

The OECD’s previous recommendations for Australia include new measures to boost business research to enhance innovation and reduce the comparatively high company tax rate, while relying more on the GST.

It has also called for childcare support reforms to account for the high cost of pre-primary education and to encourage parents’ labour force participation.

However, it said the only notable reforms in these areas over the past two years was an extension of childcare education to all children of four years old to 15 hours a week.

OECD secretary-general Angel Gurria is releasing the report with Australian Treasurer Joe Hockey in Sydney.