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1360.0 - Measuring Australia's Economy, 2003  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 03/02/2003   
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The household saving ratio in trend terms fell from 5.9% in the December quarter 1996, to a historic low of 0.9% in the June quarter 2002. The annual household savings ratio for 2001-02 was 1.3%.



HOUSEHOLD SAVING

Net saving (a)
Net household
disposable
income
Household
Saving
Ratio
$m
$m
%

ANNUAL

1996-97
17,827
333,137
5.6
1997-98
7,884
343,187
2.4
1998-99
10,049
362,965
2.4
1999-00
8,759
382,894
2.2
2000-01
19,258
419,852
3.8
2001-02
9,552
433,717
1.3

QUARTERLY (TREND)

2000-01
December
4,697
104,556
4.5
March
4,264
105,893
4.0
June
3,994
106,913
3.7
2001-02
September
3,867
108,039
3.6
December
2,907
108,862
2.7
March
1,635
109,489
1.5
June
966
109,846
0.9

(a) Saving is derived as a Balancing item.

Source: Australian National Accounts: National Income, Expenditure and Product (5206.0)



Explanatory Notes

Saving is the excess of income over outlays during a given period. Saving can be seen as giving up current consumption to derive a future benefit because it is used to finance investment which will increase productive capacity of the economy and enable it to produce a greater quantity of goods and services in the future. Saving can be calculated for the nation as a whole and for each sector, such as the household sector.

Net household disposable income is the amount of income that households have available for spending after deducting from total income any taxes paid, interest and other property income payments, current transfers, and consumption of fixed capital. Household net saving is calculated by deducting household final consumption expenditure and consumption of fixed capital from household disposable income. The ratio of household net saving to household net disposable income is called the household saving ratio.

If total net saving in the domestic economy and consumption of fixed capital is not enough to cover planned investment, then the nation must borrow from foreign countries to finance its investment. Historically, Australia has relied heavily on foreign borrowing to finance its investment.

Governments and private organisations are interested in changes in the level of saving because of the effect on investment and Australia's borrowing requirements from overseas.


Further Reading

A Provisional Framework for Household Income, Consumption, Saving and Wealth (6549.0)
A conceptual framework setting out the relationship between household income, consumption, saving and changes in net worth. Shows links with the national accounts.

Australian System of National Accounts (5204.0)
Contains a detailed presentation of the national accounts, including details of national and sectoral saving.

Australian National Accounts: National Income, Expenditure and Product (5206.0)
Contains quarterly measures of national saving and saving for the general government and household sectors.

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