Disposable incomes up despite low GDP

Photo / Herald on Sunday

National disposable income, which is the income available to New Zealand residents for current consumption or saving, rose 4.3 per cent in the year to this March.

That is despite an increase of just 1.2 per cent in gross domestic product, the weakest for 18 years.

National income rose more than output because of a sharp drop in the net outflow of investment income to the rest of the world - $7.6 billion, down from $13 billion in the March 2009 year. That reflected low interest rates and weak profits for foreign-owned companies in New Zealand.

For the second year in a row a larger share of national income went to the compensation of employees than to businesses' gross operating surplus.

Employees' compensation increased 1.1 per cent, including superannuation contributions, ACC levies and fringe benefits as well as wages and salaries.

Consumption by households rose 2 per cent, by central government 2.3 per cent and by local government 4.2 per cent.

But collectively that was less than the increase in national disposable income, implying national savings (for the whole economy) of $3.2 billion or 2.1 per cent of national disposable income.