Australia is more than three-quarters of the way through the decline in mining investment which has knocked the stuffing out of economic growth for several years, according to Reserve Bank assistant governor (economic) Christopher Kent.

In an upbeat speech delivered in Sydney on Tuesday morning, Dr Kent repeatedly stated that recent economic growth had been stronger than the Reserve Bank had anticipated.

There were flickering signs of life, too, in wages growth, with the wage price index having stabilised for six consecutive quarters and growth in a key measure of wages in the national accounts.

In a speech titled "After the Boom" at a Bloomberg event, Dr Kent admitted the Reserve had, in 2012, been caught unaware of the true extent and rapidity of the coming decline in commodity prices.

However, the Australian economy had adjusted well to this shock, with a flexible exchange and labour market helping to cushion growth.

It might not be too long before the jobless rate began falling again, and wages and inflation picked up, according to Dr Kent.

"If commodity prices were to stabilise around current levels, that would be a marked change from recent years. Also, the end of the fall in mining investment is coming into view. The abatement of those two substantial headwinds suggests that there is a reasonable prospect of sustaining growth in economic activity, which would support a further gradual decline in the unemployment rate. There is also a good prospect that the growth in wages and the rate of inflation will gradually lift over the period ahead."

On the vexed question of the Australian dollar, Dr Kent said Australia's exchange had not declined by as much as would have been predicted by falling interest rates. In questions later, he declined to put a number on an appropriate value for the dollar.

While growth had been stronger recently than expected, inflation had been weaker, Dr Kent said.

This was likely due to the composition of recent growth, in particular, that the production phase of the mining boom was less labour intense, particularly in the LNG sector.

However, outside the mining sector, the Reserve Bank was now clocking reasonable growth in non-mining industries, particularly service exports of education, tourism and business services.

"In the non-mining sector, growth in activity and employment (more recently) have picked up. The reduction in interest rates over the past few years has been assisting in rebalancing activity towards the non-mining economy, which is currently growing at around its long-run average rate."

Dr Kent would not comment on the new agreement that the Treasurer, Scott Morrison, will soon sign with Philip Lowe, who takes over at the helm of the Reserve in five days.

He launched a staunch defence of the Reserve's inflation target, saying that it was well understood by Australian households, business and public policy makers. "It's simple, it's well understood, it's flexible," he said.

On debt, he said it was "never time to be complacent", but that Australia's public debt levels were not high and that household debt was relatively stable as a share of disposable income.