Story: Economy

Page 7. Consumption

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The total goods and services available for use in an economy are those which are produced, plus the exports. This is called ‘gross supply’. Imports were 23.8% of gross supply in the March 2003 year. But almost a quarter (24.9%) of the gross supply was exported.

Of the total gross supply, 44.6% went into the consumption of private households. Another 1.0% was spent by private non-profit organisations such as charities. Central and local government spent 13.8% on consumption, capital formation (investment) was 15.2%, and the remainder of the available supply built up inventories.

Government expenditure

The proportion consumed by government is much lower than frequently referred to in the public rhetoric. This is partly because it is usually compared with gross domestic product (not gross supply), partly because the figure of 13.8% omits the government’s capital formation, but also because the rhetorical figure includes the transfer of monies – such as social security, welfare payments and superannuation – to the private sector, so when a New Zealand superannuitant purchases a loaf of bread, that is portrayed as public expenditure. Comparisons suggest that New Zealand’s public spending is at a level similar to that of most rich OECD countries.

How to cite this page:

Brian Easton, 'Economy - Consumption', Te Ara - the Encyclopedia of New Zealand, (accessed 27 September 2023)

Story by Brian Easton, published 8 Feb 2005, updated 1 Sep 2016