The Treasury

Global Navigation

Personal tools


Saving in New Zealand - Issues and Options

New Zealand's saving picture

The evidence and interpretation of New Zealand's saving can be broken down in several ways.

National saving

New Zealand appears to save less than most other OECD countries

It appears that New Zealand's net national saving is low compared to most other OECD countries (Figure 2).

Figure 2 - Net (of depreciation) national saving (percent of GDP, average 2000 - 2008)
Figure 2 - Net (of depreciation) national saving (percent of GDP, average 2000 - 2008).
Source: OECD

* Based on March year data

** Average for 2000-2007

*** For fiscal years beginning on 1 July of the year indicated

In 2009, New Zealand's net national saving was about 0.3 percent of gross domestic product (GDP), significantly below its average of 3.2 percent for the 2000 to 2008 period. Over the last 10 years, net national saving has fluctuated between 0 and 6 percent of GDP.

There are different approaches to measuring saving. The net national saving measure in Figure 2 is based on the conventional approach, which defines saving as income not spent on current consumption. Estimates of saving (the stock measure) that incorporate changes in asset values show a higher level of saving than the conventional approach, which excludes changes in asset values (refer to the following box on Statistics and measurement).

Statistics and measurement

Savings are a stock built up from a saving flow each period. There are two approaches to measuring saving:

  • The direct flow measure used by Statistics New Zealand, which is more conventional, defines saving as income not spent on current consumption.
  • The indirect stock measure based on the change in an individual’s net worth (total assets minus total liabilities).

The main difference between these measures is asset revaluations. They are included in the stock measure, but not in the flow measure.

Statistics New Zealand uses the flow measure for estimating national saving, calculated as the difference between national disposable income and private and government consumption.

National saving can be broken down by sector. The national accounts measure of household saving shows rates have been declining since the early 1990s, becoming strongly and increasingly negative since around 2001.

An alternative stock measure of household saving can be calculated using Reserve Bank of New Zealand data on changes in the annual Household Balance Sheet, excluding equity held by households in unincorporated businesses and farms, and consumer durables.

A number of estimates of household saving have been made using the Household Balance Sheet data with different exclusions and deflators. All show higher levels than the national accounts flow measure of household saving, although the Reserve Bank estimate shows a similar trend of falling saving.


  • Despite allowing for methodological differences (different treatments of asset revaluations), the inability to fully reconcile the stock and flow measures is a puzzle that may never be fully settled given the data sources and conceptual differences.
  • One of the reasons that the national accounts data may not accurately reflect the split between household and business saving is the high degree of cross-over between business and household saving in New Zealand. The current approach is to typically combine them into a single private sector group when analysing saving behaviour and outcomes.
  • Though there is an internationally accepted methodology for measuring saving, caution is still needed when comparing saving rates across countries, due to the variation in the actual way saving is measured and the differences in the timeframe over which data has been collected. However, such comparisons are useful to illustrate broad trends.

The following section breaks national saving down by sector to identify drivers of saving in the aggregate picture.

Saving in New Zealand by sector

Over the past 15 years, government saving in New Zealand was mostly positive, while private saving was negative on average

General government has contributed positively to national saving over the past 15 years (around 4 percent of GDP on average). By contrast, net private saving (business and households) as a percentage of GDP averaged around negative 1 percent over the same period, suggesting that New Zealand households and firms have been “dis-saving”. That is, overall, they have been consuming more than they earn. This is despite New Zealand typically having higher interest rates than most other countries in the OECD, suggesting that New Zealanders are less willing than most of their OECD counterparts to save at a given interest rate, or to put it another way, more willing to spend.

These trends have reversed partly in response to recent challenging economic circumstances (Figure 3). The government is now a net dis-saver, while the private sector has become a net saver.

Figure 3 - Net (of depreciation) saving by sector
Figure 3 - Net (of depreciation) saving by sector.
Source: Statistics NZ, Treasury
Page top