applying increased amounts of labour, and particularly capital, to production. business investment in recent years has risen to a very high level relative to gdp, one of the highest among the developed economies ( graph 2 ). employment growth has also been strong. nonetheless, the slowdown in productivity growth has meant that gdp growth in the latest decade was not as fast as in the previous decade. graph 2 disciplined economic policies also contributed to the good economic performance of the past 20 years. they have prevented the build - up of imbalances that might otherwise have threatened the economy, as occurred frequently in the 1970s and 1980s. government budget finances were greatly improved during the period. budget surpluses were recorded in 10 of the 19 years since 1991. government debt was reduced sharply, leaving australia as one of the best positioned developed economies in terms of government finances. monetary policy helped keep inflation low, providing a stable environment in which businesses and households could plan and undertake their economic activities. since inflation targeting began in 1993, inflation has averaged 2. 7 per cent, a little above the midpoint of the target range ( graph 3 ). graph 3 4. how has this growth been distributed through the economy? economic growth is important because it allows living standards to rise and more people to find work. the benefits that have flowed to australians in this respect over the past couple of decades have been impressive. since june 1991, 3. 5 million new jobs have been created and income per household has risen by a cumulative 30 per cent in real terms ( graphs 4 and 5 ). graph 4 graph 5 the increase in jobs, which represented a rise of 2 per cent per year on average, was faster than the growth in the population, and was met partly by an increase in the proportion of the working - age population that is in the workforce, and partly by a decline in unemployment. over the period, the unemployment rate fell from 9 per cent to a little over 5 per cent. one question of interest is how the benefits of this growth were distributed through the community. there are various ways to look at this : one is across the states ; another is across the income distribution ; and a third is across industries. let me start with a comparison of the states. the key point that stands out is that all the states shared in the growth over the period, though queensland and western australia grew faster than the others. as can be seen in table 2, growth in gross state product in queensland averaged 4. 8 per cent per year

driven importantly by the mining sector. exports are also increasing at a solid pace at present, as earlier increases in mining capacity are coming on stream. together with much higher export prices, this has meant that the trade account of the balance of payments has moved strongly back into surplus, an unusual situation for australia. employment has been growing strongly, in fact more strongly than would normally be associated with recent rates of increase in gdp, and the unemployment rate has fallen significantly since mid 2009, to around 5¼ per cent ( graph 8 ). graph 8 as i mentioned earlier, over the past couple of decades the typical pattern had been for growth in the resource - rich states of queensland and western australia to be faster than the average of the other states. currently, however, that is not the case. queensland is lagging the other states, with relatively weak growth in retail sales and consumption, and particularly business investment ( table 5 ). over the past year, queensland has experienced little growth in final demand, whereas in the rest of australia demand grew by close to its highs of the past decade ( graph 9 ). part of the problem is that queensland seems to be suffering from an overhang in the property market after a period of exuberance in the lead - up to the financial crisis. apartment building outside brisbane is especially weak, as is commercial building. the high exchange rate is, of course, also affecting the tourism industry in queensland, as australians are taking advantage of cheaper foreign holidays. graph 9 table 5 state economic indicators percentage change over past 12 months * nsw vic qld wa sa tas 4. 7 6. 4 0. 3 6. 1 5. 2 3. 1 consumption 2. 8 3. 3 1. 8 5. 9 3. 3 3. 0 dwelling investment 0. 1 0. 6 1. 3 5. 0 – 8. 1 6. 8 business investment 1. 9 10. 4 – 17. 8 0. 6 – 0. 7 – 24. 3 government 13. 4 12. 8 10. 6 14. 5 17. 7 15. 8 per cent 1. 4 3. 6 2. 9 5. 2 2. 2 – 0. 1 number ( ‘ 000 ) state final demand ( sa, per cent ) employment ( sa ) * state final demand data are over the year to the march quarter 2010 ; employment data are over the year to july 2010. source : abs. 6. outlook our expectation is that economic growth in australia will continue