Though in saying that, it is worth noting that the aggregate level of saving in Australia is actually pretty high compared to other countries, it is just that investment is even higher.
For more than a century, Australia’s high level of investment relative to saving has been supported by capital inflows from the rest of the world.1 These net capital inflows are the financial counterpart to Australia’s current account deficit. Foreign investment has been instrumental in expanding our domestic productive capacity and has been attracted by the favourable riskadjusted returns on offer here.