share of working - age australians with a job has never been higher than it has been recently. the youth labour force participation rate is the highest it has been in a long time and the youth unemployment rate is the lowest that it has been in many decades ( graph 2 ). female labour force participation has also been at a record high. graph 2 youth labour market outcomes % unemployment rate % % % participation rate source : abs these are positive outcomes for the country and society as a whole. for decades, australia struggled to achieve what was considered to be full employment. too many people couldn ’ t find a job or the working hours they wanted. this was one dark spot on what has otherwise been a very successful economy over recent decades. there are still significant issues in our labour market, but the outcomes i have just highlighted are much better than most people thought likely, or perhaps even possible. there is a positive social and economic dividend to this. our communities are stronger when people who want to work can find a job and the hours they want. paid work not only generates incomes, but it also helps people develop skills and progress up the ladder of opportunity. the positive labour market outcomes largely reflect the policy stimulus during the pandemic – the same factor that lies behind some of the recent inflation. for a while, the disruptions caused by the pandemic made it more difficult for firms to operate and some had to hire extra workers to deal with this. but the more important factor has been the support to aggregate demand provided by both fiscal and monetary policy through the pandemic. this support was primarily designed to protect against catastrophic economic outcomes, which it successfully did. but, it also had the effect of underpinning a strong recovery in aggregate demand that has created jobs and achieved a substantial reduction in unemployment. as we battle with inflation, it is worth remembering there is another side too. i would now like to return to the battle against inflation. in the december quarter, the headline inflation rate reached 7. 8 per cent ( graph 3 ). this is the highest rate in more than three decades. graph 3 consumer price inflation * year - ended % % - 5 - 5 * excludes interest charges prior to the september quarter of 1998 ; adjusted for the tax changes of 1999 – 2000. sources : abs ; rba as we know from the 1970s and 1980s, high inflation is damaging and undermines people ’ s living standards. while the circumstances that gave rise to the current inflation are different

– suggests, as we said at the time, that “ further tightening of monetary policy is likely to be required at some point for inflation to remain consistent with the 2 – 3 per cent medium - term target ”. it remains, though, a matter for judgement by the board as to whether that point has been reached. at its most recent meeting, the board ’ s view was that it had not been. new information will, as always, be important in our monthly assessments of what monetary policy needs to do. as far as prices are concerned, we will get another comprehensive round of data in late july. fiscal policy is also playing a significant role. the “ fiscal impact ”, calculated as the shift in the federal budget position from one year to the next, is forecast to be minus 2 per cent of gdp in the 2011 / 12 fiscal year. a further, though slightly smaller, effect is forecast by the treasury in the following year. there remain, of course, differences in economic performance around the country. given movements in commodity prices over the past year and the stated investment intentions of major resources companies, these differences are more likely to increase than decrease over the coming period. more generally, while everyone understands that there is a “ mining boom ”, many people would say that they themselves cannot directly feel the effects. we have seen widespread re - emergence of talk of “ two speed ” or “ multi speed ” economies. within the state of queensland itself there were differences in performance, even before the floods, let alone after them. how then do we make sense of these phenomena? it is a complex story, and i do not wish to make light of any of the legitimate concerns that people have about the differing economic conditions – actual and potential – across regions or industries. but there are three observations worth making. the first is that the impact of the resources sector expansion does get spread around, in more ways than might immediately be apparent. obviously mining employs only a small share of the workforce directly – less than 2 per cent. but to produce a dollar of revenue, companies spend about 40 cents on acquiring non labour intermediate inputs, primarily from the domestic sector. apart from the direct physical inputs, there are effects on utilities, transport, business services such as engineering, accounting, legal, exploration and other industries. it is noteworthy that a number of these areas are growing quickly at present. once the costs of producing the output and other factors – such as taxes – are taken into account, the remaining revenue