speech opening statement to the house of representatives standing committee on economics philip lowe governor canberra – 16 september 2022 good morning chair and members of the committee. thank you for holding this hearing. at the reserve bank, we take these hearings very seriously. they are a critical part of the accountability process and my colleagues and i are committed to answering your questions openly and transparently. the previous hearing was held in early february. a lot has changed since then. i would like to highlight three of these changes : 1. the decline in unemployment. 2. the surge in inflation. 3. the earlier and sharper - than - expected increase in interest rates. lower unemployment in february, the unemployment rate stood at 4. 2 per cent. today, it is 3½ per cent. this is the lowest unemploy ment rate in almost 50 years. labour force participation has also increased, so that a higher share of the workingage population has a job than ever before. and underemployment is lower too, as people who work part - time are finding it easier to get the hours they want. i wanted to recount these facts because the improvement in the australian labour market is a major achievement. australians are finding it easier to get a job than they have for a long time. young people and women are benefiting most from this and they have greater opportunities. our economy and our society are stronger as a result. higher inflation in contrast, the second change since february – the increase in inflation – is an unwelcome one. when the previous committee met in february, underlying inflation in australia had just reached the midpoint of the 2 to 3 per cent target range for the first time in many years. seven months on, we are in a very different position. inflation has very quickly gone from being too low, to being too high. over the year to june, the headline inflation rate was 6. 1 per cent. it is expected to increase further over the months ahead to peak at around 7¾ per cent later this year. inflation is then expected to start declining, to be back around 3 per cent late in 2024. global factors explain much of this increase in inflation. russia ’ s invasion of ukraine resulted in major disruptions to energy markets, increasing retail energy prices around the world. and covid - related interruptions to global production are still rippling through global supply chains, pushing prices up. the demand for goods in global markets has also been very strong

jean - claude trichet : interview in the wall street journal interview with mr jean - claude trichet, president of the european central bank, in the wall street journal, conducted by messrs brian blackstone and marcus walker on 19 january 2011. * * * wsj : if 2008 and 2009 were years of crisis, and 2010 was a year of stabilization and recovery. how do you see 2011? what should davos participants be focused on this year? trichet : since the start of the recovery, in the third quarter of 2009, the real economy has surprised up on the upside. this is encouraging. i see 2011 as a year of continuous hard work, to make the financial sector more resilient and to improve the soundness of fiscal policies. the crisis, which started in 2007 and intensified in september 2008 revealed the fragility of the financial sector first and then the relative vulnerability of public finances in the advanced economies. wsj : what worries you most? trichet : to consider that because we managed to avoid a depression and are now experiencing the recovery, we could lose momentum in the reforms that are still urgently needed. that is the main danger. wsj : this year austerity becomes pan - european. but a recent united nations report said austerity risks a renewed economic downturn. do you agree? trichet : no, we do not. i do not buy the very simple reasoning that would suggest that pursuing sounder fiscal policy would hamper growth. on the contrary, i think that appropriate fiscal retrenchment in countries that need it is part of growth enhancement, because sustainable public finances makes a difference in terms of improving confidence of households, enterprises, investors and savers, which is decisive to foster growth and job creation. wsj : does the u. s. have it wrong? it is engaging in even more fiscal stimulus. trichet : it ’ s not for me to give a lecture to other advanced economies. we have our own responsibilities. in our own case we strongly believe that fiscal soundness is confidenceenhancing and therefore part of a growth - enhancing strategy. wsj : in your recent ecb press conference you made repeated references to the july 2008 rate hike and said the ecb is never pre - committed not to move interest rates. were your remarks over - interpreted as hawkish? trichet : i have nothing to add to what i have said last thursday ( ecb press conference on 13