result has been that the stock of banknotes on issue has increased from $ 83 billion in february to $ 94 billion today. we have met this extra demand despite our main storage vault being located in one of the coronavirus hotspots in melbourne. i would like to close with some general comments about the economic policy response to the pandemic. while monetary policy has played an important role, it has been fiscal policy that has provided much of the support to the australian economy. this is quite a change from how things have worked over recent decades and it is being accompanied by a significant increase in public borrowing as governments work to limit the hit to people ’ s incomes. this shift in fiscal policy is quite a shock for a country that has got used to low budget deficits and low levels of public debt. in that context, it is worth pointing out that : by borrowing today to support the economy we are avoiding an even bigger loss of output and jobs that would damage our economy and society for years to come, which would put ongoing strain on the budget. australia ’ s public finances are in strong shape and public debt here is much lower than in most other countries. the overall national balance sheet is also in a strong position after decades of good economic performance. government ’ s financing costs have never been lower, with interest rates being the lowest since federation. this all means that the expected increase in public debt is entirely manageable and is affordable. it is the right thing to do to borrow today to help people, keep them in jobs and boost public investment at a time when private investment is very weak. there will always be debates about the precise nature of programs and about how much support should be provided, but the general strategy that we have is the right one. looking forward, an important priority will be to boost jobs. based on the forecast i discussed earlier, high unemployment is likely to be with us for some time, which should be a concern for us all. the reserve bank will do what it can with its policy instruments to support the journey back to full employment. beyond that, government policies that support people ’ s incomes, that add to aggregate demand through direct government spending and that make it easier for firms to hire people all have important roles to play. we need to make sure that australia is a great place for businesses to expand, invest, innovate and employ people. 4 / 5 bis central bankers'speeches thank you. my colleagues and i are here to answer your questions.

turning now to the australian labour market, the unemployment rate, at 5. 2 per cent, is a little higher than when we met six months ago. this is despite employment growth having been stronger than we had expected. what has happened is that increased demand for labour has been met with more labour supply, especially by women and older australians. reflecting this, a higher share of the australian adult population is participating in the labour market than ever before. this is good news. but one side - effect of this flexibility of labour supply is that it is harder to generate a tight labour market and so, in turn, it is harder to generate a material lift in aggregate wages growth. looking forward, while some slowing in employment growth is expected, the central scenario is for the unemployment rate to move lower to reach 5 per cent again in 2021. if things evolve in line 1 / 4 bis central bankers'speeches with this central scenario, it is probable that we will still have spare capacity in the labour market for a while yet, especially taking into account underemployment. this means that the upward pressure on wages growth over the next couple of years is likely to be only quite modest, and less than we were earlier expecting. caps on wages growth in public sectors right across the country are another factor contributing to the subdued wage outcomes. at the aggregate level, my view is that a further pick - up in wages growth is both affordable and desirable. turning now to inflation, the june quarter outcome was broadly in line with expectations, after a run of lower - than - expected numbers in earlier quarters. over the year to june, inflation was 1. 6 per cent, in both headline and underlying terms, extending the period over which inflation has been below the 2 – 3 per cent medium - term target range. the reserve bank board remains committed to having inflation return to this range, but it is taking longer than earlier expected. there are a few factors that i would highlight as contributing to the low inflation outcome over the past year. these are : the slow growth in wages ; the ongoing spare capacity in the economy ; various government initiatives to address cost - of - living pressures on households ; and the adjustment in the housing market, which has contributed to unusually low increases in rents and declines in the price of building a new home in some cities. working in the other direction, the drought and the depreciation of the exchange rate have been pushing some prices up. looking ahead, inflation is still expected to pick