Price stability to be at the cost of full employment

On Wednesday, the Government signed another Policy Target Agreement with the Reserve Bank. It is still based on price stability and inflation is still to be kept at 1-3 percent over the medium term. But instead of "full employment" and "equitable distribution of income", the Government wants to promote a "growing, open and competitive economy as the best means of delivering permanently higher incomes and living standards".

So social objectives for all go out the window in favour of stronger economic objectives that benefit the few. Given that economic growth is expected to be zero in the short to medium term, I fail to see how the PTA will lead to economic growth. So not many are going to get permanently higher incomes and living standards unless they are MPs or judges.

Given that unemployment and inflation are trade-offs, and unemployment is to go up - does this mean that the Reserve Bank is to use unemployment to keep inflation down again. If so, that`ll be the explanation for the removal of "full employment" from the PTA.