APPENDIX II.1: Typical Problems with Public and Private Pension Schemes

Besides the projected increase in the fiscal burden, there are also other problems inherent in a pay-as-you-go public pension scheme, such as the New Zealand superannuation (in which current expenditure on pensions is financed by taxes on current income). However, it is clear that the main alternative to the pay-as-you-go system, namely introducing a system based on defined-contribution private pension schemes, also faces serious problems and challenges. This Appendix summarizes the typical problems with both systems.

Typical problems with a public pension scheme

  • Disincentives to work and save. The negative effects on work and saving occur because the need to finance the current generation of retirees increases the tax rates levied on the current working generation and because a guaranteed level of income during retirement is provided by the public pension scheme.

  • Diminished development of private capital markets and financial instruments. The negative effect on capital markets occurs because the public scheme reduces the scope for pension funds and annuity markets.

  • Intergenerational redistribution. The problem of intergenerational redistribution exists in any pay-as-you-go system, and is amplified by a demographic transition to a higher old-age dependency ratio.

  • Risk of political interference. Because of its potential for policy-induced income redistribution, a pay-as-you-go pension system might generate strong political lobbies and political battles. Not only does this create an abundance of lobbies and interest groups that crowd out more productive activities, but it also introduces an element of uncertainty regarding the future of the scheme, upon which the intergenerational equity of the system is supposed to be based.47

  • Risk limitations which severely restrict the rate of return which can be earned by individuals on their savings. A pay-as-you-go system is always compulsory and, when mature, it generally offers a low rate of return (roughly equal to the sum of working-age population growth and real wage growth), which usually is dominated by other existing investment alternatives.

Typical problems with a private pension scheme

  • High administrative costs. The administrative costs of a private scheme with competing funds are in general significantly higher than those of a public scheme (especially if the public scheme is financed from general revenue and does not require a separate collection bureaucracy). These costs include the public costs of regulation and supervision, the costs of marketing and managing the funds, and the compliance costs of employers (who need to collect contributions).48

  • Increased private and fiscal uncertainty. Although the expected rate of return in a private scheme is usually higher than in a public scheme, possible variations in the rate of return are also much higher, creating uncertainty for participants. In addition, the public costs of a private scheme are uncertain, given the (sometime implicit) government guarantee of a minimum return.

  • Controversial reliance on well functioning of annuity markets. Many countries currently do not have well-functioning markets for annuities, which are required for private pension schemes, and introduction of such schemes need to rely on the assumption that the schemes themselves will induce the development of these markets.

  • Complex regulatory mechanisms. The explicit (or implicit) government guarantee of a minimum return requires the government to set up a complex regulatory mechanism, to ensure competent and prudent management of the funds, and to prevent fraud.

  • A transition period which might impose significant costs on the current generation (and might also deteriorate the fiscal position and decrease saving). The current working generation, through the contributions (or taxes) it paid in the past, had acquired some implicit claims on future benefits. Privatizing an existing pay-as-you-go system requires the government to deal with this issue. Ignoring these claims would make the current generation “pay twice.” Recognizing these claims would require the government to bear the costs, either by cutting other expenditure, raising taxes, or issuing debt. In any case, the current generation will still need to carry a significant part of the transition costs. In case the government shares in this burden (by reducing tax rates and issuing public debt), the fiscal position deteriorates and the national saving rate can decrease (especially in the short and medium term).49

APPENDIX II.2: The Existing New Zealand Superannuation System

The current superannuation system consists of a public pension scheme—New Zealand superannuation (NZS)—and private voluntary schemes.

The public scheme

The NZS scheme is a compulsory, collective “pay-as-you-go” pension scheme, administered by the government and funded from general tax revenues. The benefits are universally available to all persons who have reached the age of entitlement—subject only to ten years residency. The age of entitlement was 60 until April 1992, and is now in the process of being gradually increased, to 65 in April 2001.

The superannuation is based on the Accord, an agreement binding four political parties—National, Labour, Alliance, and United. Broadly speaking, it guarantees the share of national income received by New Zealand retirees. The Accord sets the after-tax rate of superannuation for a couple to at least 65 percent of average after-tax, ordinary time earnings (in 1997, the after-tax benefit for a couple was equal to $NZ 321 per week).50 Single persons receive an additional allowance (about 15 percent more if living alone, and about 10 percent more if sharing accommodations).

In 1995, the pensions were received by nearly 500,000 persons—some 14 percent of the total population. The gross fiscal cost was estimated at 5.7 percent of GDP in 1995, but is expected to decline to less than 5 percent of GDP by 2001, as the retirement age is gradually increased to 65 (the net fiscal cost is about 15 percent less, because benefits are subject to income tax).

Private superannuation schemes

In addition to the public scheme (NZS), there also exist many private pension schemes. The contributions to these schemes are usually made by both employees and employers. Membership of the schemes is quite significant (about 800,000 members in 1996), but average retirement savings per investor are modest. As a result, the total amount invested in such funds is not large (about $NZ 15 billion in 1996).

The tax regime effectively treats superannuation schemes in the same way as most other forms of saving in New Zealand. Contributions to superannuation schemes are made from tax-paid funds (i.e., there are no tax concessions for contributions), all income gains of the schemes are subject to tax, and all distributions from such schemes (whether in lump sum or pension form) are received by members tax free.

The government appointed in 1991 a task force (known as the “Todd Task Force”) to consider the private provision of retirement income in New Zealand and the treatment of saving for retirement. In its final report of December 1992, the Task Force recommended that the private provision or retirement saving (which complements the compulsory public scheme) will be voluntary and without tax incentives. This is essentially a continuation of the existing regime (the other two main options that were considered were compulsory retirement saving and voluntary retirement saving with tax incentives). However, the Todd Task Force reserved the position that, if a significant increase in private saving for retirement has not occurred by 1997, the government should reconsider the prospect of introducing a compulsory saving regime.

APPENDIX II.3: International Experience with Privatizing Pension Schemes

This Appendix summarizes the experience of three countries that opted for a defined-contribution private scheme. The first, Singapore, introduced such a scheme in 1955, and never had a pay-as-you-go system. The second, Chile, had a very negative experience with its pay-as-you-go public scheme, and switched to a defined-contribution private scheme in 1981. The third, Australia, recently moved from an unfunded public scheme to a partly government funded-partly private funded retirement scheme.


Singapore’s Central Provident Fund (CPF) was initiated in 1955. The CPF is a compulsory saving scheme under which employees and employers are required to contribute a portion of labor income to CPF accounts, which are specific to individuals. Members may withdraw their CPF savings, after setting aside a fixed amount, upon reaching the age of 55. The fixed amount is used to pay monthly returns to members after they reach the age of 60. In addition to retirement benefits, withdrawals from the CPF are also permitted in the event of permanent disability or upon permanent emigration from Singapore.

Contribution rates were originally set at levels at which individuals could accumulate enough savings to finance a basic retirement income. Over the years, the CPF has been broadened as a saving vehicle to help finance individuals’ housing, health, investment, and other outlays. Starting from mandatory contribution rates of 5 percent of wages by employees and 5 percent by employers in 1955, the rates of contribution remained unchanged until 1968 but were then gradually increased to a peak in 1984 of 25 percent each for employees and employers. In 1986, the employers’ contribution rate to the CPF was reduced to 10 percent as a measure to counter the recession. Between 1988 and 1994, the employer contribution rate has been gradually increased and the employee contribution rate gradually reduced. Since July 1994, both contribution rates are 20 percent. Employees’ contributions to the CPF are excluded from their taxable earnings both when contributed and withdrawn. In addition, earnings on members’ balances are tax exempt.

Uses of CPF savings have been liberalized over time. Under the liberalization policy, CPF savings could initially be used to purchase publicly built housing and, later, private residential property. As a result, home ownership is now nearly universal. More recently, withdrawal facilities have been expanded to include investment, education, Medisave, and CPF-administered life, health, and home insurance schemes.

CPF saving has increased relative to GDP since the 1960s, but the CPF’s share of total private saving has declined in recent years (to about 40 percent). Withdrawals of CPF savings have increased over time, reflecting the liberalization of approved withdrawal schemes as well as the increased stock of the total CPF balance. More than one-half of withdrawals in recent years have been for housing.

The sizable mandatory CPF contribution rates have attracted attention. While these rates appear high in comparison with social security schemes in other countries, the fully funded and individual-specific nature of CPF saving does not afford a direct comparison with pay-as-you-go social security programs of other countries. Also, expanding withdrawal facilities for home ownership and investment purposes has enlarged the role of CPF saving considerably beyond that of a social security scheme.

Assets of the CPF peaked at more than 70 percent of GDP in 1986, and gradually declined to around 55 percent of GDP in 1994, and most of these balances are invested in government bonds. Interest earned on CPF saving balances is deposited into members’ CPF accounts. The real rate of return during 1980-95 has been around 2 percent. While the CPF is the main lender to the government, the funds are not needed for budget financing and are invested (mainly as overseas portfolio investment) by the Government Investment Corporation.

The high level of mandatory saving through the CPF may have been a factor responsible for Singapore’s high overall private saving rate. This point has been addressed by Husain (1995). His work suggests that, on average, over the period 1970-92, variations in CPF saving did not have a statistically significant effect on private saving, and that Singapore’s high saving rate could be explained by demographic factors, the rapid growth of private disposable income, and the high level of budgetary saving.

As Husain notes, however, the CPF was probably a factor in Singapore’s rising saving rate, even until the early 1980s, when withdrawal criteria were less liberal and the degree of substitutability with other saving was lower. Today, the CPF may still raise the saving propensity of low-income households, which might otherwise choose to consume more, although having little effect on aggregate saving. The effect on the disposition of private savings is a separate matter, because the fact that members are not free to allocate their balances to the full range of saving instruments represents a potential distortion. In addition, the arrangements favor particular forms and uses of savings, especially investment in housing.



The 1981 reform of the pension system in Chile has been undertaken in the context of a comprehensive market-oriented structural reform program that was initiated in 1975. The decision to undertake the reform responded to four considerations: (i) the explosive fiscal consequences of the old regime; (ii) the high degree of inequality of the old system; (ii) its implied efficiency distortions; and (iv) an ideological desire to reduce drastically the role of the public sector in economic affairs. Interestingly enough, in explaining the reform, the Chilean authorities barely referred to the potential effects of the new system on domestic saving.

The pension system in Chile originated in the 1920s. By the 1970s, the system had become an insolvent pay-as-you-go regime. An important characteristic of the old system was a complete lack of uniformity regarding benefits and retirement ages, which varied considerably across occupations, in general benefiting more high-income workers.

In 1981, the government decided to introduce a sweeping reform to the pension system. As a way to increase the appeal of the new system, and reduce political opposition, the contribution rates were set at a level that resulted in an increase of net take-home pay for those that joined the new system (given the anticipated higher rates of return on the accumulated funds, it was expected that the lower contribution rates would be enough to finance higher rates of replacement for pensions).

The new pension system is based on individual retirement accounts managed by companies known as AFPs.53 Each AFP can manage only one retirement fund. Workers have the freedom to choose the AFP they want to be affiliated to, and can transfer their funds freely among them (up to four times a year). The retirement age is 65 for men and 60 for women, but early retirement is possible under certain conditions.

The system is obligatory, requiring that every worker participates in the new system (or, in the case of older workers, continues with the old system).54 The volume of privately managed pension funds increased from 10 percent of GDP in 1985 to 43 percent of GDP in 1995, and are expected to reach 110 percent of GDP by 2010. The obligatory contribution rates by employees are equal to 10 percent of the worker’s disposable income. Employees can also make voluntary contributions (up to a certain limit).55 Required contributions are tax deductible, as is the income accrued to the accumulated fund during the contributor’s active life. Once the worker retires, however, the pension becomes subject to income tax, as any other source of income. When individuals retire, they can choose either to buy an annuity or to withdraw their funds according to a preprogrammed plan. The actual rate of replacement for standard old-age pensions has differed slightly between annuities (about 74 percent) and preprogrammed withdrawals (about 83 percent). Both of these rates, however, are significantly higher (for most workers) than under the old pay-as-you-go system.56

Fees and commissions are determined freely by the AFPs. The government plays a fundamental role in the system, regulating and monitoring the operation of the AFPs. This role is performed by an institution especially created for this purpose—the Superintendency of AFPs—that established from the first day very precise norms to secure the diversification and transparency of AFP investments. During the early years, investment by the funds was largely restricted to government securities. In 1985, AFPs were allowed to invest up to 5 percent of the funds in equities. In 1989, they were allowed to invest in real estate and, in 1992, they were permitted to invest up to 9 percent of the funds in foreign securities.57

The government guarantees a minimum return on accumulated funds, in case the AFP significantly underperforms (relative to the other AFPs). In addition, the government guarantees a minimum pension to poorer participants in the system. The value of the minimum pension is adjusted from time to time and, in general, it is approximately equal to 25 percent of average wages. In addition to its involvement in these areas, the Chilean government also makes pension payments to those individuals that, either by choice or because of their age, did not transfer to the new system. In some recent years, the cost of paying these pensions has been more than 4 percent of GDP.

The Chilean system imposes lower and upper limits to the return AFPs have to pay to their members.58 Those AFPs that do not obtain the minimum return have to make up the difference from funds withdrawn from an “investment reserve” (which is especially set up for this purpose and has to amount to at least 1 percent of the total value of the fund). If an AFP cannot meet a profitability shortfall out of its reserves, it is liquidated (and the government makes up the difference). AFPs that exceed the maximum return have to deposit the excess funds on a “profitability reserve,” to be used if, in a subsequent year, the AFP underperforms.

Rates of return on the accumulated funds have been nothing short of spectacular. Between 1981 and 1995, the funds earned an average real rate of return of 12.6 percent.59 Real returns were negative in 1995 and reached only 3.5 percent in 1996, but rebounded to 8 percent during the first two-thirds of 1997.60 It is clear that these high rates of return have been largely the result of Chile’s economic circumstances during this period. Chile has experienced a tremendous growth period where the value of assets, and in particular firms, increased at a very fast rate. Additionally, between 1985 and 1991, real interest rates were very high, allowing funds that invested in fixed income securities to experience very healthy returns.

The transition

When the pension system was introduced in 1981, the new Chilean pension law established that workers that joined the labor force before the end of 1982 had five years to decide whether to join the new system. Those joining the labor force after that date could not participate in the old system, and had to become affiliated with an AFP of their choice. Since those that joined an AFP experienced an immediate increase in net take-home pay of 11 percent, the number of people transferring to the new regime was very high. The government dealt with past contributions of transferees by issuing bonds (called “recognition bonds”), which were deposited in their AFP accounts.

The transition generated two major sources of public expenditure: (i) payment of pensions to retirees in the old system; and (ii) servicing and payment of the recognition bonds. The costs totaled 4-5 percent of GDP during the 1980s but, after 1990, are slowly declining and are expected to reach 3.5 percent of GDP by 2000 and 2 percent of GDP by 2010.61 Chile has opted to directly finance these costs out of general government revenues. This choice required a strong fiscal consolidation in areas other than pensions.

Macroeconomic effects

Because the comprehensive structural reforms program caused very substantial changes in the Chilean economy over the last 20 years, it is difficult to use time-series techniques to estimate the effects of the pension reform.62 However, it is conceivable that it made a significant contribution to the phenomenal increase in the country’s growth and saving rates, as well as the rapid development of the financial sector.

The effect on saving rates has taken place mostly through an increase in public sector saving (by close to 5 percent of GDP between 1983 and 1993).63 The effect of the pension reform on private saving probably included a positive direct effect (meaning that the offset of voluntary saving to new compulsory saving was less than full) and, perhaps more importantly, a positive indirect effect through higher growth rates.64

The effect of the pension reform on financial market development is quite evident. Pension funds are the largest institutional investors in the Chilean capital market, with assets exceeding 40 percent of GDP, compared with 1 percent of GDP in 1981, The massive amount of funds that AFPs control has helped create a dynamic and modern capital market. What is perhaps more important, however, is that it has allowed private firms (and, especially, newly privatized utilities) to rely on long-term financing for their investment projects. This kind of long-term private financing is particularly important for Chile’s ambitious infrastructure program.

The pension reform has probably also had an important effect on the functioning of the labor market. Chile experienced a rapid job creation, that has resulted in the reduction of the rate of unemployment from 25 percent to less than 6 percent of the labor force. By reducing total rates of payroll taxes and effective taxes on labor, the pension reform has reduced the cost of labor and has encouraged employment creation.

Specific weaknesses and possible lessons

The combination of the “one fund per AFP” and the minimum/maximum profitability rules have resulted in AFPs having very similar portfolios. Although this homogeneity of results may have some political appeal, it introduces significant economic distortions. In particular, it does not allow people with different tolerances for risk to have different portfolios. A way to correct this problem would be to allow two or more funds per AFP, and to relax the rules on minimum and maximum rates of return.

A number of critics have argued that the Chilean system is exceedingly costly. However, this criticism is not impeccable. Initially, administrative costs were indeed extremely high. In 1984, for example, they amounted to 90 percent of contributions to the retirement system. By 1994, however, costs have declined significantly, amounting to 10 percent of contributions. In terms of accumulated assets, administrative costs have declined, from almost 15 percent in 1983 to 1.8 percent in 1993, including sales costs.65 Marketing and sales costs represent an important percentage of total administrative costs (more than one-third in 1991). Critics also complain that annuities are very expensive, costing almost 4 percent of the value of the contract. Several critics have suggested to allow for group purchase of annuities and called for a greater regulation of the industry, as a way of reducing the cost of annuities.

The biggest problem in terms of administrative costs appears to be the excessive cost of marketing. The Economist (1997) describes this problem: “The mutual funds, called AFPs, compete for Chilean workers’ pension assets. Between them, the AFPs employ 18,000 salespeople—one for every 300 active workers. Since all civilians with regular jobs are already in the system, the marketers spend their time inducing workers to switch funds. One worker in four did so in 1996.” A possible solution to this problem could be restricting the mobility of workers between AFPs, for example, by allowing funds to impose a small fee on participants that decide to switch to another fund. Such fee could then be redistributed to the other participants in the fund.

An important problem concerns the distortions associated with the government guarantees. The design of these guarantees introduces a significant moral hazard problem. In particular, there is an incentive for lower-income individuals to minimize their contributions and to obtain the minimum pension. An easy way to reduce this problem would be to establish some relationship between the guaranteed pension level and the amount of contributions in the past.


Introduction of Australia’s compulsory system essentially involved a move from an unfunded pension system to a partly government funded-partly private funded retirement scheme, which nevertheless maintained a public pension safety net. In the mid-1980s, Australia began to move to introduce a system of compulsory private saving for retirement income (“superannuation”) to complement its existing public pension system and private voluntary schemes.

Under the current compulsory saving arrangements, all employers were required to make superannuation contributions on behalf of their employees. Subsequently, self-employed persons have been incorporated in the scheme. The initial employer contributions were set at a rate of 4 percent of employee earnings (3 percent if the employer’s payroll was less than $A 1 million). The rate of contribution rose to 5 percent in 1992/93 and 6 percent in 1995/96. Further increases are to be phased in, with contributions to peak at 9 percent in 2002/03.

The previous government had proposed that the employer contributions would be supplemented from 1997/98 onwards by contributions from individual employees and government itself; these contributions amounting, in aggregate, to a further 6 percent of payrolls by 2002/03. Overall, therefore, the aggregate contribution would have amounted to 15 percent of payrolls which was judged to be sufficient, over 40 years, to finance a pension approaching 60 percent of preretirement earnings.

The present government has decided not to proceed with co-contributions from individual employees and government sources. Instead, the contributions (by employers only) will be capped at 9 percent, which is judged to provide a pension equivalent to 43 percent of preretirement earnings over 40 years of continuous contribution (or 28 percent over 30 years). In place of the previously proposed arrangements, the government has decided to implement a broad-based saving rebate. The tax arrangements are complex, involving concessional tax rates.

The compulsory arrangements have four effects on national saving: (i) there will be a reduction in future tax revenues arising out of the concessions available for pension contributions and earnings under the compulsory scheme; (ii) there will be a future reduction in public expenditure on pensions (arising largely out of the likelihood that an increasing number of those of pensionable age will receive only a part public pension as means tests are applied to the earnings from their compulsory savings);67 (iii) the net increase in deficit will give rise to future increases in debt interest payments; and (iv) there will be a sizable gross increase in private saving from the compulsory contributions and subsequent accumulated earnings (which will be partly offset by decline in voluntary forms of nonsuperannuation saving).

Analysis of these factors by the Retirement Income Modeling (RIM) task force suggested that the current and proposed superannuation arrangements, including the measures announced in the latest budget, and the prescribed future schedule of contribution rates, are estimated to have a positive impact on national saving of 1.5 percent of GDP in 2001/02 rising to 3.6 percent in 2019/20.68 In this context, it must be noted that the compulsory pension arrangements—which have now been in place for six years—appear to have had little impact on private saving to date. Total private saving continue to languish at about 15 percent of GDP—with household saving near post-World War II lows—well below the peak levels achieved in the 1970s.

One particular problem with the scheme is that benefits in private superannuation have to be preserved only until age 55, while the public pension is not generally available until age 65. There is a very strong incentive, therefore, to retire early, run down lump-sum savings, and then qualify for the public pension, when eligible. Alternatively, since the primary residence is excluded from the means test, there may be an incentive to use savings to fund excessively expensive home purchase. These incentives also appear to influence labor force participation, introducing a further doubt on the impact of the arrangements on national saving.69

There might also be a significant effect on employment. Although employers can deduct contributions made on behalf of employees, the Australian scheme has nevertheless added to nonwage labor costs. The final impact of the scheme depends on where the incidence of the levy falls; if it falls on employees in the form of lower wage, it will not impact on employment, but could lead to lower discretionary saving by individuals (this approach was used by the RIM); if it remains on employers, it may impact negatively on employment.



Statistical Tables

Prepared by Tim Callen and Mark Stone (APD)

Approved by the Asia and Pacific Department

October 16, 1997


  • 1. Gross Domestic Product by Sector, 1992-97

  • 2. Selected Quarterly Indicators of Economic Activity, 1992-97

  • 3. Expenditure on GDP, 1992-97

  • 4. Prices and Wages, 1992-97

  • 5. Manufacturing Productivity and Labor Costs, 1992-97

  • 6. Labor Market Developments, 1992-97

  • 7. Employment by Sector, 1992-96

  • 8. Central Government Operating Statement, 1992/93-1996/97

  • 9. Central Government Balance Sheet, 1992/93-1996/97

  • 10. Statement of Cash Flows, 1992/93-1996/97

  • 11. Central Government Revenue, 1992/93-1996/97

  • 12. Central Government Expenditure, 1992/93-1996/97

  • 13. Central Government Debt, 1992/93-1996/97

  • 14. Interest Rates and Yields, 1992-97

  • 15. Money and Credit Aggregates, 1992-97

  • 16. Financial Survey, 1992-97

  • 17. Domestic Credit by Sector, 1992-97

  • 18. Balance of Payments, 1992-97

  • 19. Foreign Trade Value, Volume, and Unit Values, 1992-97

  • 20. Changes in Volumes and Unit Values of Exports, 1992-97

  • 21. Composition of Exports, 1992-96

  • 22. Changes in Volumes and Unit Values of Imports, 1992-97

  • 23. Composition of Imports, 1992-96

  • 24. Services and Transfers, 1992-97

  • 25. External Debt, 1992-97

  • 26. Exchange Rates, 1992-97

  • 27. Gross Official International Reserves, 1992-97

Table 1.

New Zealand: Gross Domestic Product by Sector, 1992-97

(1991/92 prices, percentage change from previous year)

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Source: Data provided by Statistics New Zealand.

Forestry, fishing, and mining.

Central and local government services.

Transportation, communications, and business and personal services.

Table 2.

New Zealand: Selected Quarterly Indicators of Economic Activity, 1992-97

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Sources: Data provided by Statistics New Zealand; and the New Zealand Institute for Economic Research (NZIER), Quarterly Survey of Business Opinion.

Seasonally adjusted, in constant March quarter 1995 prices.

Production measure, at constant 1991-92 prices.

Based on the median capacity utilization index for the manufacturing and building and construction sectors, as estimated by the NZIER (seasonally adjusted).

Table 3.

New Zealand: Expenditure on GDP, 1992-97

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Source: Data provided by Statistics New Zealand.

Percent contribution to growth in GDP.

Table 4.

New Zealand: Prices and Wages, 1992-97

(Percentage change from previous year)

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Sources: Data provided by Statistics New Zealand; and the Reserve Bank of New Zealand.

Compiled by the Reserve Bank and defined to exclude the effects of changes in the terms of trade, interest rates, and government charges.

Input prices are for all industries, including commodity taxes paid and subsidies received by the producer. Output prices are for all market groups based on factory door prices before addition of commodity taxes or deduction of producer commodity subsidies.

Earnings include bonuses, all allowances, overtime pay, and special payments of all sectors.

Table 5.

New Zealand: Manufacturing Productivity and Labor Costs, 1992-97

(Percentage change from previous year)

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Source: Data provided by Statistics New Zealand.

Defined as real GDP in manufacturing divided by hours worked in manufacturing.

Deflated by the output price index in manufacturing.

Covers wage and nonwage labor costs but controls for quality and quantity of work and, therefore, does not fully reflect productivity.

Table 6.

New Zealand: Labor Market Developments, 1992-97

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Source: Data provided by Statistics New Zealand.

Registered unemployment is an administrative count of those enrolled with the New Zealand Employment Service. It does not conform to the International Labor Organization’s standard definition of unemployment commonly used for international comparisons.

Table 7.

New Zealand: Employment by Sector, 1992-96 1/

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Source: Data provided by Statistics New Zealand.

Based on Household Labor Force Survey.

Table 8.

New Zealand: Central Government Operating Statement, 1992/93-1996/97 1/

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Source; New Zealand Treasury, Economic and Fiscal Outlook, various issues.

The reporting entity includes all state-owned enterprises (SOEs) and Crown entities, as well as the Reserve Bank of New Zealand.

Includes fines and fees.

Finance costs include interest and other costs associated with the stock of public debt, but excludes the capital portion of debt repayments.

Table 9.

New Zealand: Central Government Balance Sheet, 1992/93-1996/97 1/

(In millions of New Zealand dollars)

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Sources: New Zealand Treasury, Economic and Fiscal Outlook, various issues.

The reporting entity includes all state-owned enterprises (SOEs) and Crown entities, as well as the Reserve Bank of New Zealand.

Table 10.

New Zealand: Statement of Cash Flows, 1992/93-1996/97 1/

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Source: New Zealand Treasury, Economic and Fiscal Outlook, various issues.

The reporting entity includes all state-owned enterprises (SOEs) and Crown entities, as well as the Reserve Bank of New Zealand.

Table 11.

New Zealand: Central Government Revenue, 1992/93-1996/97 1/

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Source: New Zealand Treasury, Economic and Fiscal Outlook, various issues.

The reporting entity includes all state-owned enterprises (SOEs) and Crown entities, as well as the Reserve Bank of New Zealand.

Table 12.

New Zealand: Central Government Expenditure, 1992/93-1996/97 1/

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Source: New Zealand Treasury, Economic and Fiscal Outlook, various issues.

The reporting entity includes all state-owned enterprises (SOEs) and Crown entities, as well as the Reserve Bank of New Zealand.