Adam has clarified a bit of a typo in his analysis, which I posted on below:
"Specifically, I stated that in the absence of government transfers the savings ratio would be 3% instead of 9.7%. This is wrong. The overall lift in social assistance has been roughly $4bn per quarter now v pre GFC - not the $13bn which my analysis assumes. This would cut the savings ratio to 7.9% per quarter (which is about the long-term average). So, while my point that savings have been driven by incomes is true, it is not from government transfers (although they are not irrelevant and have certainly helped boost the stock of savings). Increased income from workers compensation is the primary driver in savings growth and jobs growth is the key here. That said, the example I used for the December quarter 2008 is still correct, the lift in savings in that quarter was primarily from an increase in social assistance from the government's Economic Security package. Apologies again, although as I mentioned earlier, it doesn't change the key message that a drop off in consumption wasn't/isn't the primary driver behind the lift in the savings ratio."
