5 A comparison with other OECD countries
Data for household balance sheets are also available from the mid-1980s onward for Australia, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.[15] The data should be more or less comparable and allows a comparison of the New Zealand experience with that of other countries. One known difference is that New Zealand real assets consist of housing only and do not include other tangible assets.[16]
As in New Zealand, household saving measured by the difference between the flow of income and expenditure has been declining in other OECD countries, at least over the 1990s (see Figure 9). Also a different picture emerges from the household saving rate implied by changes in household net wealth. Moreover, the absolute difference between the flow and stock measures are large. Countries that have less deregulated financial markets and where households are more credit constrained (France, Germany, Italy and Japan, discussed further below) appear to have a higher saving rate measured in terms of flows than in countries where financial liberalisation was largely completed by the mid-1980s (Australia, Canada, New Zealand, the United Kingdom and the United States).
In the United States, the United Kingdom and Australia, the decline in the flow measure of saving was particularly marked over the second half of the 1990s. In marked contrast however, measured in terms of stocks, household saving increased over this period. In Canada and Germany, saving measured by the difference between the flow of income and expenditure also declined sharply over the 1990s, while the stock measure remained virtually unchanged. The opposite occurred in Japan. The stock measure of saving fell and the flow measure remained virtually unchanged.
Total household net wealth as a percentage of disposable income generally increased in Australia, Canada, France, Germany, Italy and the United States from the second half of the 1980s to the end of the 1990s (see Figure 10). The ratio of household net wealth to disposable income increased in these countries because households’ assets, largely financial assets, rose faster than liabilities (see Figure 11). In Australia and Canada, strong gains in real assets also contributed to the accumulation of total assets. This is in contrast to the United States and France, where financial assets rose at a much faster rate than real assets, at least over the 1990s.
- Figure 9: Stock and flow measures of household saving (as a percentage of disposable income)
- Australia
- Germany
- New Zealand
- Source: OECD, Reserve Bank of Australia, Reserve Bank of New Zealand, Statistics New Zealand, Datastream and The Treasury.
- Canada
- Italy
- United Kingdom
- France
- Japan
- United States
- Figure 10: Household total net wealth, financial net wealth and real assets (all expressed as a percentage of disposable income)
- Australia
- Germany
- New Zealand *
- Source: OECD, Reserve Bank of Australia, Reserve Bank of New Zealand, Statistics New Zealand, Datastream and The Treasury.
- * Real assets include housing value only.
- Canada
- Italy
- United Kingdom
- France
- Japan
- United States
