Healthy Money Healthy Planet - library.uniteddiversity.coop

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And it is not just bank assets that increase, but also bank earnings. A survey by
consultants KPMG (the third­largest international accounting firm) in May 2000 showed
that banks in New Zealand earned a record NZ$1.6 billion after tax in the 1999 financial
year, 38 up from NZ$1 billion in 1995. Almost all of this profit goes overseas.
With these generous profits at stake it is understandable that there has always been
a bitter ongoing struggle between politicians and the private banks for the right to issue
the country’s money supply.
Saving Solution?
A lot of economists and those politicians who are advised by economists say we can
change all this just by deciding individually to save more. In the 2001 Budget, the
Treasurer, Michael Cullen, noted with concern the declining rate of savings. Despite the
vast attention that is now being paid to the looming crisis posed by an ageing population
that cannot be supported in retirement by government superannuation, combined with
the advice to save, household saving rates have been falling in most of the world’s rich
countries. Why aren’t people saving more for their future retirement? Why are they
actually doing the opposite by saving less? 39 The trend appears to be not confined to New
Zealand. According to a study by the Organisation for Economic Co­operation and
Development (OECD), household saving rates declined between 1984 and 2001 in
Australia, Austria, Belgium, Canada, Finland, Italy, Japan, Korea, New Zealand, Portugal,
Spain, the United Kingdom and the United States. 40
As the gap between rich and poor widens, it is important to remember that only
the rich can save anyway. The poor don’t save because they spend all their money. The
rich put money into deposits in the bank and invest in managed funds, shares or
property. But much of this invested money is borrowed money. So what does the word
‘saving’ mean any more if it is not saving ‘excess’ money?