NZ Institute's work on savings commended

Thursday, February 3rd, 2005

NZ Institute's work on savings commended

The Employers & Manufacturers Association (Northern) congratulated the NZ Institute today on its paper discussing the economic importance of savings: Home is where the money is.

"EMA strongly supports the goal of achieving a high level of asset ownership," said Alasdair Thompson, EMA's chief executive.

"The reasons for New Zealand's standard of living falling so far behind Australia's, not to mention other OECD countries, comes down to the fact that Australia has achieved higher per capita savings than we have.

"Among the reasons for this are:
* New Zealanders save comparatively very little
* Amongst Anglo countries New Zealand alone has no policy aimed at increasing personal savings
* Foreign Direct Investment in general has not gone into new businesses, or export industries as it has in such as Ireland, Singapore or Taiwan. Most has been invested in existing domestic businesses such as utilities, and government debt securities and housing mortgages.
* New Zealanders rate of investment in business is among the lowest in the OECD.
* Government policies have created an environment less conducive to business investment than elsewhere
* We have failed to make investing in business attractive, especially exporting
* Past Government investment has not been good quality ('Think Big')

"The NZ Institute has identified what Business New Zealand, EMA, IMF and the OECD have said for years: "The low level of business investment (in New Zealand) is generally recognised as the reason for the difference in the level of productivity and income per capita between New Zealand and other developed countries."

"The Government now needs to concentrate on developing policies that will give New Zealanders a good reason to invest in business, and especially in export oriented business."

ENDS

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