Rates round-up: Dec 19

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New Zealand households start saving again

Sunday, December 18th 2011, 10:46PM

by Niko Kloeten

New Zealand's household savings rate has turned positive for the first time in more than a decade.

Statistics New Zealand figures show New Zealand household sector saving was $200 million in the year to March 2011.

Although this was equal to only 0.2% of household net disposable income, it was the first time since 2000 that the households overall spent less than they earned.

It was a big turnaround from the March 2010 year, when household expenditure was $1.6 billion more than income.

The biggest blowout was in 2006 when New Zealand households splurged their way to a $6.85 billion gap between what they spent and what they earned.

"Household sector saving is positive for the first time in more than a decade, after borrowing first began to decline several years ago," economic statistics development acting manager Vannessa Turner said.

However, the good behaviour of households has been more than offset by the profligate spending of central and local government, which combined for negative $2.4 billion in the year to March.

Savings in the government sector peaked at $11.8 billion in 2007.

The deterioration in government finances helped New Zealand's overall national savings rate decline to $1.2 billion in the year to March from $2.0 billion in the same period last year.

Kiwi Finance investors to get their money

Debenture investors in Kiwi Finance will receive full reimbursement and are to be repaid approximately $1.2 million, the Financial Markets Authority has announced.

The payment covers all remaining principal owed to secured debenture investors, plus interest outstanding up until Kiwi Finance went into receivership in April 2008.

Three of Kiwi Finance's four former directors, Rodney Greensill, Chris Simkin and Barry Lambert, have undertaken not to act as managers of an issuer of debt securities for a period of five years.

Rhys Greensill has undertaken not to act as a manager of an issuer of debt securities for a period of three years.

The Greensill family is paying all of the $1.2 million of reparation, which is reflected in the shorter period of Rhys Greensill's management undertaking.

FMA chief executive Sean Hughes said the outcome was an excellent one for Kiwi Finance investors.

"As signalled in our Enforcement Policy earlier this year we want to focus our resources on conduct that harms the function of open, transparent and efficient capital markets.

"In this instance full restitution of investors' funds, together with an enforceable undertaking from the directors, is a good conclusion to the investigation and a strong outcome for Kiwi Finance investors."

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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