As a number of people have noted recently, this needs to be high on our national agenda. Monetary Policy I would now like to talk about the concept of normal as it applies to four issues related to monetary policy. The first of these is inflation. The key point here is that low inflation has become normal in Australia (Graph 7).
Most consumers and businesses now view it as usual, typical or expected that inflation will average 2 point something over time. Australians, and those doing business here, can make their investment and spending decisions without having to worry about the possibility of rapid and unexpected increases in the general level of prices. This is quite different from the 1970s and 1980s.