The RBA is seeking to achieve the lowest rate of unemployment that can be sustained without inflation becoming an issue. In doing this, one of the questions we face is what constitutes full employment in a modern economy where work arrangements are much more flexible than they were in the past. I will return to this issue in a moment.
The labour market is, of course, also central to the third objective in our mandate – our collective welfare. It is stating the obvious to say that for many Australians, having a good job at a decent rate of pay is central to their economic prosperity.