Mr Simon Crean MP today claimed twice on national radio that national savings are being run down. That claim is entirely false.
National saving is all saving (or dissaving) by the public and private sectors. It includes saving by both the household, and corporate sectors, and by the Commonwealth, State and local levels of government.
Household saving as defined in the National Accounts is a narrow measure and the Accounts have an explicit caution in relation to it (see p.7). It is a very small element of national saving.
In the March quarter 2001, gross national saving was 19.1 per cent of GDP, up from 18.3 per cent of GDP in the March quarter 1996.
Further, in the five years of this Government, gross national saving has averaged 19.4 per cent of GDP, a significant increase on the average gross national saving of 17.2 per cent of GDP in the last five years of the Labor Government.
This turnaround in our national saving performance has been driven by the Commonwealth Government.
In the March quarter 2001, gross general government (Commonwealth, State and local) saving was 2.3 per cent of GDP (or $4.0 billion), up from -0.6 per cent of GDP (-$0.7 billion) in the March quarter 1996.
In the five years of this Government, gross general government saving has averaged 2.8 per cent of GDP (or $4.1 billion), significantly above the average gross general government saving in the last five years of the previous Government of -1.6 per cent of GDP (or -$1.7 billion). It also exceeds the average gross general government saving in the period from March 1983 to March 1996 of -0.4 per cent of GDP (or -$0.3 billion).
The net household saving ratio in the March quarter 2001 was measured at 0.7 per cent, down from 2.3 per cent in the December quarter 2000 The ABS have previously noted in that "in analysing [the household saving ratio] it is important to keep in mind its limitations". (September quarter 1999 National Accounts) The Treasury explored these issues in detail in an article, The Measurement of Saving, in the Spring 1999 edition it's Economic Roundup and discusses there data and measurement problems.
More comprehensive measures of private saving which include corporate saving point to much higher levels of saving.