3.5 Augmenting the household balance sheet
The Reserve Bank of New Zealand publishes annual estimates of the assets and liabilities of households.[17] These formed the basis of estimates presented in Section 3.4. However, as noted in Table 6, not all assets are included. The Bank has an on-going project to augment the household balance sheets with a series of elements not currently included. A progress report provides a preliminary augmented balance sheet for the household sector (Briggs, 2012).
To date, the following items have been added to the existing data on household assets: equity held in unincorporated businesses and in unlisted incorporated businesses. This adds about $170 billion to previously published estimates of household assets. It is important to note that these are labelled 'experimental” at this stage, although it is expected that ultimately they will be formally incorporated in the Bank's published tables of assets and liabilities.
In addition, the augmented estimates of assets include currency (notes and coins) held by households and unfunded superannuation claims. The latter refer to “entitlements not covered in full by the amounts that are held in superannuation funds. These unfunded claims largely relate to defined benefit schemes” (Briggs, 2012, p.33). At this stage they relate only to public sector schemes.
In the current context the question which arises is: would these revisions to the household balance sheet have implications for the implied stock measure of the household saving rate? Briggs (2012) notes that incorporation of equity held in unincorporated businesses and in unlisted incorporated businesses into the assets of households will not necessarily result in an implied saving rate that are higher than those based on the existing data. Briggs presents the augmented estimates for the years 2007 to 2011. Using the existing data, the implied annual average household saving rate over this period was 2.7%. When this is recomputed using the augmented balance sheet data, the implied saving rate is 5.5% (noting that there are large swings in both cases associated with the impact of the global financial crisis). This is a very preliminary snapshot based on a short period; however it does suggest that the revisions to the household balance sheets may well have implications for the implied stock measure of the household saving rate.
