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Better saved than sorry: Treasury’s position on NZ’s savings performance

Better saved than sorry: Treasury’s position on NZ’s savings performance. 10.0. 10.0. business. 8.0. 8.0. 6.0. 6.0. national. 4.0. 4.0. core crown. 2.0. 2.0. 0.0. 0.0. % of national disposable income. 1993. 2000. 1992. 1994. 1995. 1996. 1997. 1998. 1999. 2001. 2002.

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Better saved than sorry: Treasury’s position on NZ’s savings performance

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  1. Better saved than sorry: Treasury’s position on NZ’s savings performance

  2. 10.0 10.0 business 8.0 8.0 6.0 6.0 national 4.0 4.0 core crown 2.0 2.0 0.0 0.0 % of national disposable income 1993 2000 1992 1994 1995 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 -2.0 -2.0 -4.0 -4.0 household -6.0 -6.0 -8.0 -8.0 -10.0 -10.0 -12.0 -12.0 Household Business Core Crown National Saving Thesaving picture in NZ (macro) Chart: Saving by sector

  3. International comparisons suggest NZ has low household saving Table: Selected country household saving rates (period averages as a % of household disposable income)

  4. Stock measures suggest that wealth has increased even after allowing for house price increases

  5. 30 25 20 15 % of personal disposable income 10 5 0 1980-84 1985-89 1990-94 1995-99 2000-05 -5 -10 -15 Flow: from HIOA Stock excl. house price changes Stock-based estimates of HH saving rates are higher & show less evidence of a  trend in recent years Source: The Treasury

  6. NZers rely a lot on housing for their wealth Chart: Non-financial assets (mainly housing) as a % of total household assets 80 70 60 50 40 30 20 10 0 US (2005) France (2005) Germany Australia Japan (2004) Canada UK (2004) NZ (2005) (2005) (2004) (2005) Source: OECD, Reserve Bank of New Zealand

  7. Annual percentage change of house prices Source: QVNZ (obtained through Reserve Bank of New Zealand)

  8. 150% 100% 50% 0% Net Foreign Assets as a percentage of GDP -50% -100% -150% Italy Spain Japan Korea Ireland Poland Turkey Finland Mexico Iceland France Belgium Canada Austria Greece Portugal Denmark Hungary Norway Sweden Australia Germany Netherlands Switzerland Luxembourg United States New Zealand United Kingdom Czech Republic Slovak Republic Net external liabilities – % of GDP Source: Lane and Milesi-Ferretti (2006)

  9. The saving picture in NZ (micro) Table: Holdings of super schemes - by types of schemes Source: Treasury’s calculations based on 2001 Household Savings Survey data for individuals aged 18-64 Table: Holdings of any super scheme -by income quintile Source: Treasury’s calculations based on 2001 Household Savings Survey data for individuals aged 18-64

  10. The saving picture in NZ: ages 45–64 Table: Proportions of the population who may be saving inadequately for retirement Notes: The adjusted scenario assumes a decline in retirement consumption with age and introduces a cap on retirement consumption, which results in lower prescribed saving rates. “Low to middle incomes” is the group of people earning between $15,000 and $50,000 per annum. Source: Le, et al. (2007) and The Treasury

  11. Better saved than sorry: Treasury’s position on NZ’s savings performance

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