‘Save more, spend less’ says RBA’s Glenn Stevens

Reserve Bank governor Glenn Stevens said the time was ripe to be prudent about household spending. Stevens warned about the “challenge of prosperity” facing the nation and said it would be unwise for Australia to become hooked on unsustainable levels of spending. "A prudent approach might be to use the current period of exceptionally favourable international prices to raise our saving,” Mr Stevens said.

He noted that the household savings rate had already swung into positive territory over the past five years. Australian households are saving about 10 per cent of their income, compared with minus 1 per cent five years ago, when they were spending more than they were earning.

Source: Herald Sun