New Zealanders are spending almost everything they earn, with only about $700 million in household saving in the March 2020 year, slightly less than in 2019, Stats NZ said today.
"That's the equivalent of each occupied household, numbering 1.79 million in New Zealand, earning about $412 more a year than they spend," national accounts senior manager Paul Pascoe said.
"After the global financial crisis in 2008/2009 the household saving rate picked up sharply for a few years, but more recently household saving has been relatively low. Income is increasing but spending has been rising even faster for the past seven years."
Year ended March | Household saving ($) |
2006 | -5093000000 |
2007 | -3512000000 |
2008 | 112000000 |
2009 | -1501000000 |
2010 | 2154000000 |
2011 | 3460000000 |
2012 | 4059000000 |
2013 | 1764000000 |
2014 | 1638000000 |
2015 | -407000000 |
2016 | -28000000 |
2017 | 478000000 |
2018 | -90000000 |
2019 | 870000000 |
2020 | 736000000 |
Year ended March | Saving ratio (%) |
2006 | -5.8 |
2007 | -3.7 |
2008 | 0.1 |
2009 | -1.4 |
2010 | 1.9 |
2011 | 2.9 |
2012 | 3.2 |
2013 | 1.4 |
2014 | 1.2 |
2015 | -0.3 |
2016 | 0 |
2017 | 0.3 |
2018 | -0.1 |
2019 | 0.5 |
2020 | 0.4 |
Household net disposable income is the amount of money a household has once all money coming in such as wages, interest, and child support, and outgoings, like taxes, have been accounted for. It represents the money a household can spend, save, or invest.
Net disposable income for households increased $8.1 billion, or 4.6 percent, to $183.2 billion in the 2020 year. This was similar to final consumption expenditure, up $8.2 billion, or 4.7 percent, to $182.5 billion. This meant that household saving fell to $0.7 billion for 2020, down from $0.9 billion in 2019.
On the income side, employees' pay, perks, and other compensation increased 5.9 percent to $137.7 billion in the year ended March 2020, reflecting both pay rises and more people employed. Provisional estimates of the income of self-employed business owners and partnerships increased 5.9 percent to $34.3 billion, with $6.4 billion of this entrepreneurial income from agriculture businesses and $28.0 billion from other industries such as property operators, construction, and professional services.
Household spending on housing, power, and gas (household utilities), recreation and culture, and food and non-alcoholic beverages led increases in 2020. Income tax payable by households increased 7.2 percent to $41.5 billion.
The latest figures are for the 12 months before New Zealand went into lockdown in late March as a result of the COVID-19 pandemic.
Household adjusted net disposable income
Household adjusted net disposable income was up 5.4 percent to $224.6 billion for the year ended March 2020.
"Household net disposable income represents the total income of New Zealanders, while adjusted net disposable income includes social transfers in kind - health, education, and housing spending on behalf of households by the government and non-profits," Mr Pascoe said.
Household net disposable income per capita was $36,560 for the year ended March 2020. Adjusted for social transfers in kind, this income increased to $44,822 per capita.
This means the equivalent spending of $8,262 per person was made directly by the government and non-profits on behalf of households for the year ended March 2020, up from $7,737 per person for March 2019.
Year ended March | "Social transfers in kind | "Net disposable income | "Adjusted net disposable income |
2006 | per capita" | per capita" | per capita" |
2007 | 4839 | 21106 | 25944 |
2008 | 5117 | 22544 | 27662 |
2009 | 5534 | 24453 | 29987 |
2010 | 6084 | 24606 | 30690 |
2011 | 6268 | 26015 | 32283 |
2012 | 6339 | 27138 | 33477 |
2013 | 6561 | 28577 | 35138 |
2014 | 6593 | 28774 | 35367 |
2015 | 6773 | 29768 | 36540 |
2016 | 6955 | 29978 | 36932 |
2017 | 7017 | 30962 | 37979 |
2018 | 7036 | 32674 | 39710 |
2019 | 7308 | 33944 | 41252 |
2020 | 7737 | 35574 | 43311 |
"The increase in spending on behalf of households for the March 2020 year represents increased government spending on health, education, and housing services," Mr Pascoe said.
Household investment and net lending
Households' investment was $16.3 billion in the year ended March 2020 as the trend of investment in new homes and major home improvements continued.
New Zealand households borrowed $10.2 billion in the March 2020 year, the equivalent of approximately $2,000 for every person in New Zealand.
Net borrowing represents the difference between saving and investment - the shortfall comes from other sectors, including the rest of the world. Net borrowing for the year ended March 2020 represents new borrowing and is not an accumulated total of previous years' borrowings.
New Zealand households have been in a net borrowing position since 2013.
Year ended March | Net lending per capita |
2006 | -2614 |
2007 | -2212 |
2008 | -1339 |
2009 | -1198 |
2010 | -131 |
2011 | 5076 |
2012 | 1506 |
2013 | -448 |
2014 | -1032 |
2015 | -1620 |
2016 | -1907 |
2017 | -1856 |
2018 | -2124 |
2019 | -1966 |
2020 | -2033 |
The figures for the year ended March 2020 are provisional and may be subject to revision.