Reuters reports that a senior Australian central bank official said that absorbing spare labour market capacity and achieving full employment are important national priorities.

Australia's labour market has surpassed all expectations with the unemployment rate sliding to pre-pandemic levels of 5.1%. The RBA estimates that the rate will likely need to be around 4% to generate wage and inflation pressures.

"Full employment is a worthy goal for its own sake, given how important jobs and income are for people's welfare," RBA Assistant Governor Luci Ellis said.

"It is also a precondition for achieving the rates of wages growth that would be consistent with inflation being sustainably within the 2%-3% target range that the Bank is mandated to achieve."

Ellis said the RBA Board was committed to maintaining its highly supportive monetary policy settings to help achieve its employment and inflation goals.