regime would continue to be less intrusive than in most other jurisdictions. as in our recent engagement with the industry on the potential impact of a point - of - sale switch outage, we will seek to identify relevant action points for the reserve bank and industry. but, consistent with our broader regulatory philosophy, we will avoid prescriptive solutions if possible. industry cooperation and rigorous self - assessment in the context of international standards is 3 / 5 bis central bankers'speeches preferable to regulatory intervention. the proposals are still subject to cabinet approval. the next step in the process would be to prepare new legislation. the reserve bank would issue an exposure draft for consultation around the end of q1 or early q2 next year. apart from the new regulatory framework for fmis, the ministry of business, innovation and employment ( mbie ) has recently released an issues paper on retail payment systems, their focus being on merchant service and interchange fees. this is an important efficiency and competition issue that many countries are grappling with. the reserve bank and the government share the common objective of a sound and efficient payments system and which facilitates innovation and open access. the government ’ s issues paper looks at features of the retail payments system that may also have broader social efficiency implications, for example arising from the allocation of costs associated with new payment services. i encourage you to consider and make submissions on the issues paper. replacement technology for esas and nzclear the reserve bank operates two important parts of the new zealand payments infrastructure : esas and nzclear. these systems, both of which are designated, need to remain reliable, efficient and fit for purpose. we also need to be responsive to changing customer demands and new technologies. the current esas and nzclear systems, introduced in 1998 and 1990, have served us well, but both now require upgrades. the replacement project underway aims to implement systems that meet modern standards of reliability and security while having sufficient capacity and agility to meet customers ’ performance expectations. at this point, these upgrades are expected to be completed by the end of 2018. closing in conclusion, i want to reinforce what i have said about the proposed new fmi oversight regime. we have sought your input to the regime over recent years and we believe we have listened. we do not envisage that the new framework will significantly change how the payments industry operates or how we engage with each other. we already have a very collaborative relationship with the industry, including payments nz. while some

i j macfarlane : australia's economic situation and implications to monetary policy opening statement by mr ian j macfarlane, governor of the reserve bank of australia, to the house of representatives standing committee on economics, finance and public administration, canberra, 17 february 2006. * * * it is a pleasure to be back here again in front of the committee, and to be having this hearing in canberra for the first time in a number of years. i note that the membership of the committee has changed again, particularly on the government side. that is something that has happened pretty well continuously in the nearly ten years i have been reporting to it under the current arrangements, but it has not interfered with the committee's effectiveness. as you know, we had our february board meeting last week and we issued our quarterly statement on monetary policy earlier this week. this document spelled out in detail how we see the current situation in the economy, and why the stance of monetary policy is where it is. this morning i would like to take the opportunity of looking at the broader trends in australia's economic situation and examining the implications they have for the stance of monetary policy going forward. i will take as a starting point australia's current economic expansion. for years i have made the point that progress in winding back economic slack is made not by high growth in any individual year, but by maintaining an expansion over a sustained period. australia's current expansion began in late 1991 and is now in its fifteenth year. this means that it is already significantly longer than its predecessors in the 1960s, 1970s and 1980s. the expansion has been marked by good growth in gdp, which has averaged 3¾ per cent per annum over this period, one of the best performances in the developed world. a consequence of the sustained expansion is that the economic slack generated in the last recession has been gradually used up. one indicator of this is the unemployment rate, which has trended down from a peak of 11 per cent in 1993 to be currently just over 5 per cent. other indicators of the economy's capacity utilisation are also at cyclically high levels. business surveys report that businesses are operating at close to their highest levels of capacity utilisation since the late 1980s. the surveys have also been reporting high levels of labour scarcity. for the past year or so, many businesses have been in the unusual position of reporting that scarcity of suitable labour was a bigger constraint on their activities than their traditional concerns about the adequa