Australia stops saving

Australians' saving ratio fell to a record low of 0.5 per cent in the September quarter with households spending 99.5 per cent of their net disposable incomes. In the late 1980s the household saving ratio was about 10 per cent.

However, household wealth rose at an average yearly rate of 10.7 per cent between 1996 and 2001 with housing now making up about 60 per cent total household wealth and shares just under 8 per cent.

The Federal Treasurer claimed the savings ratio reflects consumers' ability to leverage their wealth to fund spending. But Shadow Treasurer Bob McMullan disagreed saying it indicates the rising pressure on families.