relative to the size of our economy, is much lower than in many other countries and it is likely to remain so ( graph 10 ). the national balance sheet is in a strong position and is able to provide the support that is now required. the australian government can borrow at the lowest rates ever and the demand from investors for government bonds remains very strong. the states and territories can also borrow at record low rates and have an important role to play in the national fiscal response. graph 10 general government gross debt 2019, per cent of gdp japan italy united states france canada united kingdom india germany malaysia china australia south korea sweden indonesia new zealand % source : imf no doubt, there will be a point in the future when attention will need to return to the task of rebuilding our fiscal buffers to deal with the next downturn. this task will be easier when the additional government spending is temporary in nature. in any case, the best way to rebuild these buffers is through economic growth. this means that structural reforms that drive that growth need to remain on our national agenda. i would now like to turn to monetary policy, which has played an important supporting role. the package of measures announced in march – including the target for the yield on 3 - year australian government bonds – has led to record low funding and borrowing costs, which have eased the burden of the pandemic for many people. the rba's open market operations and the term funding facility have both contributed to a plentiful supply of liquidity in the australian financial system and this is supporting the supply of credit to households and businesses. this supply of credit will be important in the recovery phase. these measures to support the australian economy have resulted in a very large increase in the rba's balance sheet ( graph 11 ). between 2016 and early this year, our balance sheet averaged around $ 170 billion. it is now almost double this at over $ 300 billion. graph 11 reserve bank balance sheet total assets, weekly $ b $ b source : rba at its september meeting, the reserve bank board decided to expand the term funding facility to provide authorised deposit - taking institutions ( adis ) with additional low - cost funding equivalent of 2 per cent of their total lending. the timing of this decision coincided with the approach of the deadline for final drawings under the initial allocations under this facility. as adis draw on the expanded facility there will be a further significant expansion of our balance sheet. this expanded facility should be seen as

speech the recovery from a very uneven recession philip lowe [ * ] governor citi ’ s 12th annual australia and new zealand investment conference sydney – 15 october 2020 it is a great pleasure to be able to join you today. it is especially good to be able to join you in person, rather than over the internet. this is the first time since february that i have been able to speak to a room of people. i hope this is another sign that the worst is behind us and that a recovery is under way. today, i would like to talk about that recovery and four interrelated factors that will shape it. these are : ( i ) how successful we are in containing the virus ; ( ii ) how effectively we deal with the shadow of the very uneven recession ; ( iii ) how willing people and businesses are to draw on their accumulated financial buffers ; and ( iv ) economic policy, including monetary policy. as we all know, the past seven months have been very difficult ones in the life of our nation. they are months that we will always remember. our lives have been affected in ways that were barely imaginable at the start of the year. the economic policy response has also been on a scale that was barely imaginable back in january. at a high level, that response has had two parts. the first has been to build a bridge to the day that the pandemic is contained and to get as many people and businesses across that bridge as possible. and the second part has been to construct the road to the recovery as the economy opens up. this has been the right strategy. it has involved the government, the rba, the regulators and the banks working closely together in the national interest. thanks to this effort and the progress on the health front, a recovery is now under way and we can look forward to this continuing. this is good news, but the shape and nature of that recovery remains highly uncertain. much depends upon how as a society we can live with the virus and the success of the scientists in terms of a vaccine, anti - viral treatments and rapid testing. there has been positive news on these fronts recently and we hope for more positive news, but success is not yet assured. so the single most important influence on the recovery is how successful we are in containing the virus. i would now like to turn to a second factor that will shape the recovery – that is the shadow cast by the very uneven nature of the recession that we have been