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Thursday, 25 May 1989
Page: 2694

Senator FAULKNER —My question is directed to the Minister representing the Treasurer. It concerns Australia's household savings ratio and the need for that ratio to be increased. Can the Minister say whether there are marked differences in the household savings ratio between the different States? If so, which State has the highest ratio, and which has the lowest? Are these ratios tending to converge?

Senator WALSH —National accounts data on household savings are available, but only on a whole year basis. In other words, there is no quarterly publication, broken down by States. Therefore, the most recent figures for States are those for the last financial year, 1987-88. In that year Australia as a whole had a household savings ratio of 8.2 per cent. There are very considerable differences between States. Indeed, when I first became aware of them I found them to be quite remarkable. The State with the highest ratio in the last financial year was Victoria, with 12.8 per cent. The State with the lowest ratio was Queensland, with 2.4 per cent. In other words, Victoria's figure is some 400 per cent higher than Queensland's-an enormous difference.

On the question of whether the rates are converging, I have figures for the changes between 1986-87 and 1987-88. For Australia as a whole, the savings ratio increased from 7 per cent to 8.2 per cent; in Victoria there was an improvement from 10.8 per cent to 12.8 per cent; but in Queensland there was a deterioration from 4.1 per cent to 2.4 per cent. No other State has a savings ratio anywhere near as low as that of Queensland. The only other State to experience a decline in the household savings ratio between 1986-87 and 1987-88 was South Australia, and in that case the figure fell moderately from 8.5 per cent to 8.2 per cent, which was right on the national average for that year.

The determinants of household savings are rather complex. It is suggested by some that the very low figure for Queensland could be affected by the State's high proportion of retired people. There may be some validity in that-I am not sure-but it is certainly not feasible that that difference, or any other similar difference, could alone account for the enormous gap between Queensland's figure and the national average, let alone between Queensland's figure and that of Victoria. By a process of elimination one is led to the conclusion that the appalling economic record of the Queensland Government must be the dominant factor.