New Zealand's high, consumption-based economic growth of the last decade, funded by foreign borrowing, will not lead to permanent higher living standards, according to an independent think-tank report.
Wednesday, February 2nd 2005, 11:34PM
by The Landlord
Only by increasing savings will true prosperity rise, the New Zealand Institute report "Home Is Where The Money Is: The economic importance of savings" concludes.
New Zealand's consistently low level of household savings and high foreign debt inhibits growth, it says.
Author David Skilling says policies of the last two decades to remove incentives to accumulate wealth sets New Zealand apart from the international policy mainstream.
He argues the lack of asset ownership among many New Zealanders suggests the current hands-off approach to savings and asset ownership is inadequate.
