Tuesday 19th of October 2004

Scobie began with a tongue-in-cheek quote from former New Zealand Prime Minister Keith Holyoake, who, when asked if the government was spending enough on defence, said “of course we are- if we weren’t spending enough, we’d be spending more.” Much the same applies with New Zealanders savings, Scobie suggests. Scobie’s research for the Treasury, which has drawn on work by the Household Savings Survey, says that while “some of us perhaps aren’t saving enough” taken on the whole New Zealanders can be epxected to have enough to retire on. Scobie’s work though does emphasise the importance of state-funded superannuation. A third of New Zealanders do not need to save because superannuation means they will be no worse off, or even a little better off, after they retire. Scobie says his research is based on very conservative assumptions – a 2% rate of return on assets, after tax and fees. It also assumes no capital growth. And he says that fears that the younger generation are more profligate than their elders are misplaced. “there is no indication (from the data) that younger people are any worse savers than older people were.” Scobie told the meeting that the Household Savings Survey was misnamed – “it is not of households and it’s not of savings”. The government has decided not to repeat the comprehensive survey, which was carried out in 2001. Instead, Statistics New Zealand is now carrying out the long term Survey of Family Income and Employment (SOFIE). That work, which began in April this year, should provide greater detail of household wealth over a period of time.