Kiwis Saved Millions in 2011
December 16, 2011 New Zealand Finance
After nearly a decade of spending beyond their means, New Zealanders are finally saving a portion of the incomes they earn each month.
On December 15th Statistics New Zealand released the latest Institutional Sector Accounts report, showing that New Zealand households have begun saving money for the first time in over a decade.
The newly released statistics indicate that in the year up to March 2011, New Zealand households saved NZD 200 million more than they spent. The savings are equivalent to approximately 0.2 percent of net disposable household income in New Zealand. In comparison, in the year up to March 2010, New Zealand households spent approximately NZD 1.6 billion more than they earned.
New Zealand has not seen overall savings since the year up to March 2000. Over the last ten years, the difference between spending and incomes peaked in 2006, with households spending approximately NZD 6.85 billion more than recorded incomes. The difference in earnings and net spending was fueled by borrowing and extra debt.
Mark Smith, the Senior Economist at ANZ Bank, commented on the latest savings result, saying that recent financial turmoils have scared New Zealanders into paying off the debts they incurred over the last 10 years. Shamubeel Eaqub, principal economist at the New Zealand Institute of Economic Research suggested that New Zealanders were becoming better savers, but he added that net savings of NZD 200 million was still a small amount, and New Zealanders needed to keep increasing the amount of money they save each year.