is, 1981 : q3, 1990 : q2, 2000 : q3, 2008 : q3 and 2023 : q2 ). * * bars with transparency, and the lighter line represent august 2024 smp forecasts. sources : abs ; rba. but those assumptions could be wrong. what if unemployment rises more rapidly, as it has for example in canada, sweden and new zealand ( graph 10 )? concerns that something similar might be about to happen in the united states caused last week ’ s sharp repricing in us rate expectations. graph 10 unemployment rates * quarterly deviation around post - pandemic trough ppt ppt canada sweden 1. 0 1. 0 united states australia 0. 5 0. 5 new zealand 0. 0 0. 0 germany - 0. 5 - 2 - 2 quarters from trough * data is to june quarter 2024, except for the united states which includes a september quarter 2024 estimate ( based on july ’ s figure ). sources : eurostat ; lseg ; rba. r e s e r v e b a n k o f au s t r a l i a - 0. 5 graph 11 illustrates that a higher unemployment path would bring inflation back to the midpoint of the target range more rapidly, more than offsetting the higher inflation persistence assumed in the central case. graph 11 unemployment risks scenario * % unemployment rate trimmed mean inflation 4. 8 % 4. 5 higher unemployment 4. 6 4. 0 aug smp 4. 4 3. 5 may smp 4. 2 3. 0 lower unemployment 4. 0 3. 8 * 2. 5 2. 0 scenario assumes exchange rate and policy path are fixed to august smp assumptions. sources : abs ; rba. we also conducted a scenario exercise for household consumption. [ 21 ] judgements about consumption are particularly important for the inflation forecast, because consumption accounts for roughly half of total australian demand. assuming that unemployment rises only gradually, the central projection is for consumption growth to pick up in line with an expected recovery in household real incomes ( graph 12 ). graph 12 household disposable income growth real, year - ended with contributions % forecasts % - 5 - 5 - 10 - 10 - 15 total labour income other net income net interest payable - 15 tax payable prices sources : abs ; rba. the drivers of the pick - up in incomes are relatively clear, barring further shocks. but consumption also depends on the

third plenum. the one - child policy has been relaxed and the government has expanded funding for social security and health care. the value - added tax has been broadened and there has been some deregulation of interest rates. so there has been progress on a number of fronts. but, on the other hand, there is still some way to go to meet the goal of allowing market forces to play a decisive role in resource allocation. reform of state - owned enterprises has been slower than many had hoped for and the state, rather than market prices, still has a strong influence in allocating resources in parts of the economy. looking forward, the pace and nature of future reform in these areas are likely to be influenced by the outcomes of the 19th congress of the chinese communist party later this year. on one final matter, i would like to take this opportunity to remind you that our new $ 10 note will be issued in just a couple of weeks, on 20 september. the new note contains the same worldleading security features as the new $ 5 note that we issued last september, including the clear top - to - bottom window, and the tactile feature so that it can be recognised by vision - impaired members of our community. for me personally, the new $ 10 note will be a particularly special note, as it is the first note with my signature. we have printed a couple of hundred million of these notes, so it has been a busy time for john fraser and me recently! the new note will continue to feature mary gilmore and banjo paterson, two of australia ’ s most famous writers. both grew up in southern new south wales. indeed, mary gilmore spent time at schools in both cootamundra and wagga wagga, just as i did. both of these writers also have a connection to queensland. for many years, mary gilmore ’ s husband ran a farm near cloncurry in northern queensland. and of course, banjo paterson is said to have written the words to waltzing matilda during a trip to dagworth station near winton. we are proud to have these two great australian writers on our banknotes. again, thank you for your attendance tonight. i hope you enjoy your dinner and the conversation. 3 / 4 bis central bankers'speeches 4 / 4 bis central bankers'speeches