Euro crisis encourages Aussies to save, says finance minister

The economic crisis in Europe has forced many Aussies to change their spending habits, according to finance minister Penny Wong.

She told ABC radio that many people down under are putting more cash into their savings accounts because they have been frightened by the financial hardship being faced by European citizens.

As a result, retailers are struggling more than ever and the competition for new business has intensified.

"Households have made a decision to improve their savings. That is not necessarily a bad thing, but obviously it has an effect on the economy," Senator Wong told the station.

A host of recent statistics showed that spending levels are down across Australia, but Ms Wong feels that this week's interest rate cuts may encourage more people to loosen their grip on their purse strings.

The Reserve Bank of Australia lowered the cash rate to 3.5 per cent yesterday (June 5th), which followed a 50-point drop in May.

Have a question about savings accounts? Ask the money gurus at Mozo Answers.ADNFCR-1761-ID-801378246-ADNFCR