Welfare blanket suffocates savings habit
Saturday 21 August 2004
New Zealand households have a lot of catching up to do in the international wealth stakes. The amount of wealth commanded by individuals is lower than in most OECD countries: for example, Australians just before retirement are more than twice as well off.
By The LandlordMoreover, the rate of wealth accumulation is lagging behind other countries so there is little prospect of catching up unless there are amazing changes.
Perhaps some change can be prepared for by making the facts available. Wealth studies are few and far between, and there is often apathy toward the subject. Yet half of the population is so poor it can be said to lack a stake in the country.
Envisage a cake that represents the nation's wealth. The top decile (the wealthiest 10%) claims half of the cake. The bottom 50% gets crumbs only as its share is a mere 3%.
In 2001, the top 10% had an average wealth of $1.1 million but the lowest 50% had negligible assets; indeed, 16% had negative assets they are in debt. Some 39%, or 800,000 New Zealanders, had less than $20,000 in net assets.
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