to say that there are not big differences across our country. there clearly are, and i will come to some of these in a moment. but, on average, the growth of the services industries has meant that the differences in industrial structures across regions have narrowed over time. i would expect that this would continue. as i have spoken about on previous occasions, the growth of services and increasing investment in technology mean that investment in human capital is critically important to the country ’ s future success. this needs to be a national focus. we are making progress, but there is more to be done, with investment in human capital central to building comparative advantage. this next graph shows the distribution across regions in the share of the population with an advanced qualification, defined here as a certificate iii or higher ( graph 12 ). there has been a marked shift to the right in the distribution. by 2016, there were only a few regions in which less than half of all 25 – 44 year olds held an advanced qualification. this is a noticeable change from the early 2000s and suggests the lift in qualifications is broadly based across regions. if anything, the dispersion across regions has also lessened over time. 12 / 16 bis central bankers'speeches so far i have spoken about the commonalities in the cyclical and structural stories. it is important, though, to recognise that there are significant differences across regions. one illustration of this is the different average level of wage income across the country, which we can calculate from individual tax returns ( graph 13 ). there is considerable variation across the country, with some regions having average wage income more than 50 per cent above the national average. wage income also tends to be higher in the capital cities than elsewhere. in part, this is explained by the types of jobs available in larger cities. for example, the capital cities are home to over 80 per cent of all it, business, hr and marketing professionals, while only around 65 per cent of people live in these cities. on average, these business - service roles attract higher wages than many other occupations. 13 / 16 bis central bankers'speeches another notable difference across regions is the level of housing prices. this reflects not just differences in average incomes, but the underlying demand and supply dynamics. this next graph shows the standard deviation in housing prices across the country, using data for around 330 separate regions ( graph 14 ). the picture is pretty clear : the dispersion in housing prices is currently larger than it has been in

philip lowe : regional variation in a national economy address by mr philip lowe, governor of the reserve bank of australia, to the australia - israel chamber of commerce ( wa ), perth, 11 april 2018. * * * i would like to thank james bishop and andrea brischetto for assistance in the preparation of this talk. i would like to thank the australia - israel chamber of commerce for the invitation to speak at this lunch today. it is great to be back in perth again. i look forward to learning more about how the western australian economy is going. later this year, the full reserve bank board will be here for our monetary policy meeting on the first tuesday in september. when i was in perth six months ago i gave a speech titled ‘ the next chapter ’. in that speech i explored some of the likely plot lines in the next chapter of australia ’ s economic history. i would like to continue that broad theme today. for most of the past decade, a common shorthand description of the australian economy was that it was a ‘ two - speed ’ economy. for some time, western australia and queensland were growing very quickly on the back of investment in the resources sector, but growth in the other states was subdued. and then things turned around : growth was weak in western australia and queensland, and stronger elsewhere. so it ’ s understandable that people have talked about a ‘ two - speed ’ economy. in a country as large and diverse as australia, it is not surprising that we experience differences like this from time to time. it is important that the reserve bank understands these differences and, indeed, we devote considerable resources to doing this. but today, rather than focus only on the differences across regions, i also want to focus on the similarities. i would like to do this from two perspectives. the first is from a cyclical perspective and the second is from a structural perspective. from the cyclical perspective, the good news is that conditions have improved across most of australia over the past year. and from a structural perspective, over time the differences in the structure of output and employment across regions are tending to become smaller, rather than larger. so i would like to talk about this. there are, of course, still important differences across the country and i will discuss some of these as well. finally, i will finish with some comments about the recent monetary policy decisions of the reserve bank board. the cyclical perspective over the past year, when discussing the national economy, the reserve