NZ not so sorry savers

March 2, 2013

New Zealanders have been accused of being poor savers for years, but are we really?

This exchange in parliament last week suggests otherwise:

David Bennett: How has household savings changed recently and what reports has he received on household wealth?

Hon BILL ENGLISH: I think, as we are familiar with, official measures show a significant improvement in the last 3 years, from dissaving of 7.1 percent of household income in 2007 to just positive household savings more recently. Alongside that, though, there is a maybe confusing report from the Reserve Bank, which has recently highlighted that in measuring household wealth its statistics exclude some important items. For instance, when it measures household wealth it does not include equity in farms. It does not include equity in shares in some businesses and commercial properties and forests, and nor does it include some types of foreign assets held by New Zealanders. It estimates that when these items are included, household net wealth is in fact $167 billion higher than it thought, or around 25 percent—that is, the Reserve Bank’s revision of the numbers indicates households may be 25 percent wealthier than they thought.

Trans Tasman offers further explanation:

. . .  The reworked figures put NZ not as an outlier among developed nations for its low rate of savings but more in the mainstream. For the best part of a generation it’s been part of the NZ economic story that Kiwis focus on housing as their main form of saving, but the revelation household wealth, following a re-estimation of non-housing assets , is more evenly balanced between property and other assets, will have implications for several major areas of Govt policy ranging from retirement to housing needs. As a result of the information from the RBNZ, Finance Minister Bill English has Treasury testing the figures and reviewing the implications.

This is encouraging, better savers have more security, more choices and are better able to look after themselves.

Better domestic savings also reduce reliance on foreign savings for investment and growth.

Government’s role in encouraging savings include policies which encourage economic growth and discourage inflation.

The first helps lift incomes and the second protects the real value of wages and savings.


NZers finally saving more

May 15, 2012

It’s taken a while but we’ve finally got the savings message:

It’s good news for Bill English ahead of the May Budget announcement. As the Government seeks to make savings, RaboDirect’s latest survey shows New Zealanders are doing the same at home – with substantially more Kiwis saving now than 20 months ago. However, people are also missing out on better rates by not shopping around.

The poll shows 73 per cent of Kiwis now have cash savings, up from 47 per cent in a similar poll in August 2010.* Reflecting the change in people’s savings habits, the poll also confirms just 11 per cent of Kiwis are not currently saving – a figure that has more than halved since 2010.**

For far too many years we’ve been spending more than we earn.

That’s why we have to rely on foreign investment, and while I’m not opposed to using other people’s money per se, too heavy a reliance on it is not wise – for individuals, businesses or countries.

Increased savings by individuals might be one factor in National’s continuing popularity in the polls. People who are taking a more Presbyterian approach to their own finances expect the government to do likewise and aren’t impressed by an Opposition which still seems to be more keen on taxing and spending.


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