Deep down, he's just a working-class saver

Michael Cullen enjoys a stretch before the business of question time in Parliament. Picture / Mark Mitchell

Michael Cullen's personal savings ethos is a product of his upbringing as a member of "the respectable working class," in London and Christchurch.

His parents saved hard for their first home, a house in North London, terraced on one side with about eight vacant lots on the other side of the house where the Luftwaffe had left its mark in World War II.

His father was a tradesman, a spectacle frame-maker, and his mother a shorthand-typist and secretary (now aged 90 and living in her own small flat in Te Atatu South).

His father's mother died in 1955, which gave them the opportunity of buying better in London or emigrating to New Zealand and with Michael aged 10, they took the latter option.

They moved to a three-bedroomed house in a new subdivision in Burwood, Christchurch, where his parents still needed a mortgage.

"It was a bit primitive at first because there was a chemical toilet and pump water and an artesian well. That was classic of Christchurch in those days as the newer working-class suburbs expanded rapidly, and services weren't there initially.

"They came along in the next few years, much to our relief - to put it literally."

He saved a deposit on a 55cc Yamaha to get to university and paid it off on hire purchase.

He won a scholarship to attend Christ's College in Christchurch and another to attend Canterbury University. After post-graduate study at the University of Edinburgh he returned to Dunedin with his first wife and bought his first home with a first and second mortgage and a personal loan from his parents - which was swiftly paid off with money he won for a prize for his doctoral thesis.

He half remembers it might have been $1500, which was quite a bit when houses were worth $10,000.

As a university lecturer he paid into the Government superannuation fund but cashed that in in 1981 to buy a car when elected to Parliament.

His first marriage broke up "and that cuts back your assets fairly substantially", but now he has a mortgage-free home in Napier with his second wife, personal savings in Kiwi Bank, a managed fund account and savings in the parliamentary superannuation fund scheme.

So when should a young couple start saving? They should have a savings programme, he says.

"What we are announcing [today] is designed to get people into that - but then we are trying to do it in such a way that it doesn't detract from the ability to address home ownership and mortgage repayments in early years of adulthood."