Official interest rates are likely to be cut even further, the Reserve Bank of Australia governor has signalled in a speech that also calls on all levels of government to fast-track infrastructure spending and structural reforms to help drive down the jobless rate.

Philip Lowe, in an address to the Committee for Economic Development of Australia in Adelaide on Thursday, said despite strong employment growth over recent years there was still "considerable spare capacity" across the jobs market.

RBA governor Philip Lowe has indicated there are more interest rate cuts to come while calling on a boost to infrastructure spending from governments. Credit:Peter Braig

He said there was "significant" underemployment and further room for more people to pick up work, which was hampering efforts to get wages growing and inflation to lift.

The RBA earlier this month sliced the official cash rate to 1.25 per cent, its lowest level on record, with Dr Lowe saying further cuts were likely.