Household saving hits all-time low
Australian households' net financial position declined by $24 billion in the year to June. Borrowings hit a record $80 billion while the value of superannuation and share assets fell.
The national accounts, released yesterday by the Australian Bureau of Statistics, estimate that household savings plunged over 2001-2002 to $5.5 billion which is the lowest amount since 1972-1973. Thirty years ago that sum was worth a lot more and represented 11 per cent of GDP in 1974-1975. In 2001-2002, the ABS's preliminary estimate is that households saved only 0.8 per cent of GDP.
Over the last year, household incomes after tax rose 3.9 per cent but consumer spending also rose – by 6 per cent – while the worth of personal assets depreciated. Australians borrowed $80 billion but acquired only $56 billion of assets, mainly due to the global slump in equity markets.