Aged policy reform must go beyond pension age

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By Leith van Onselen

The Productivity Commission has released a new report warning of a Budget crisis unless reforms are made to raise the aged pension and compel retires to pay for more of their own health costs. From The AFR:

Launching a major study into the policy effects of Australia’s ageing population, Productivity Commission chairman Peter Harris said state and federal government budgets faced “inexorable and major impacts” without major changes to policy.

The commission has proposed increasing the eligibility of the age pension to 70 years, as well as finding productivity savings in the health sector and allowing retirees to draw on home equity to help fund aged care costs.

…the Productivity Commission’s report found that the demands of an ageing population would add an extra 6 per cent of gross domestic product to government budgets by 2060 if not dealt with. In today’s terms, that amounts to $90 billion.

Changing the eligibility age of the age pension to 70 years would reap $150 billion in savings over the period from 2025-26 to 2059-60 and increase participation rates among older workers by around 3 to 10 per cent, the report found…

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The capital investment required to meet the needs of the expanded and aged population by 2060 is expected to reach some $38 trillion, five times more than that required over the previous half century…

One innovative suggestion to address the issue could be allowing retirees to draw on the equity in their home to make co-contributions to their aged-care costs, thus reducing the need for age pension payments.

Separately in The Australian, David Uren reports that taxes would need to increase by 21%, according to the Productivity Commission, unless mitigating reforms are made, whereas the working share of the adult population would decline steadily from around 64% currently to around 59% -  a level not seen since 1978 – hence reducing the tax base whilst raising aged-related costs.

Without a shadow of a doubt, the Federal Budget is facing an emergency unless reforms are made to retirement policy. As noted a few weeks back by the ABS, Australian life expectancy has increased dramatically (and will continue to do so):

“A boy born today could expect to live 79.9 years, while a girl could expect to live 84.3 years. For those approaching retirement age, say 65 years, males could expect to live a further 19 years and females a further 22 years”.

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The falling worker share will shrink the tax base, just as health and ageing-related outlays grows inexorably. Accordingly, remedial policy action must be undertaken, and raising the retirement age is a good start, although it will unlikely be anywhere enough.

In my view, the Productivity Commission has been overly timid with its policy prescriptions. As argued repeatedly, other key issues working to make Australia’s retirement system unsustainable are: 1) the 15% flat tax on superannuation contributions, which provides the lion’s share of concessions to those who need them least (i.e. upper income earners), costing the Budget a fortune in the process; and 2) exempting one’s principal place of residence from the assets test for the pension, resulting in wealthy retirees receiving benefits.

Therefore, in addition to raising the retirement age, why not: 1) make concessions on salary sacrificing into super 15% for everyone; and 2) means test all of one’s assets (including the family home) when working out who receives the pension?

If the family home was included in the pension assets test, then there would be no need to compel retirees to withdraw their home equity, which risks unintended consequences and could potentially worsen inter-generational equity (as explained here).

The fundamental issues around superannuation concessions and means testing of the aged pension must, therefore, also be addressed if Australia’s retirement system is to become sustainable.

unconventionaleconomist@hotmail.com

www.twitter.com/Leithvo

157 Responses to “ “Aged policy reform must go beyond pension age”

  1. flyingfox says:

    Good to see this being debated in the public. About time!

    • Mav says:

      It’ll be implemented when the baby boomers have enjoyed all the entitlements and die off.

      • flyingfox says:

        Perhaps but the fact it is finally being talked about is heartening. On sunrise today, they had Latham, Kennet, Stot-Despoja on “no spin” and they all talked about reverse mortgages in essence (pro and con).

        No government will act until they have too. I think the time is coming closer that they have to.

      • Lori says:

        And any government will chose the solution, which is the best for FIRE, not for the people (old and young).

      • Freddy says:

        +1. We will then see retirement age gradually increase to 100 and all unused superannuation going to the government instead of the estate.

    • migtronix says:

      I agree but will we ever, ever, EVER have the discussion about politicians renumeration and particularly pension?!?!

      It’s the only job in the world where if you get fired for doing a sh*t job, you get paid for life!

      • StatSailor says:

        Maybe so, but if you’re CEO who gets shown the door, you usually get a lump sum payment at least as large as the value of an MP’s pension.

        WRT MPs, there is at least a system of regular performance reviews with a real chance of negative outcome if you fail, and the size of the pension is linked to how many performance reviews you pass successfully

      • migtronix says:

        But unless I’m a shareholder I don’t have to pay for the CEOs exorbitant remuneration. Not ao with pollies

      • drsmithy says:

        But unless I’m a shareholder I don’t have to pay for the CEOs exorbitant remuneration. Not ao with pollies
        I daresay a typical shareholder has about as much influence over the CEO’s salary as they do over a politician’s salary.

      • migtronix says:

        Typical shareholder? You mean an Super fund or Insurance firm?

        No they have very little voting power I’m sure…

      • 3d1k says:

        Gillard.

        On extending the retirement age there need be some consideration for those that have worked largely manual jobs – many of these guys are buggered by 60! I’m more in favour of tightening means testing and possibly removing the family home exemption for any value over say $300k – and other measures such as these – what about the next generation coming along – free up some employment space for them.

      • migtronix says:

        Gillard. Exactly. And to be Our Tony :P

      • Rusty Penny says:

        On extending the retirement age there need be some consideration for those that have worked largely manual jobs

        No there does not need to be consideration paid, it’s a apologist attitude reinforcing the entitlement of boomers.

        Ther ‘retirement’ of professional athletes is around 33.

        At 34 years of age if they neee income support, they don’t receive a perpetuity, the find another job.

        Those that have worked manual jobs, and are too invalided also need to find something else to do.

      • dumb_non_economist says:

        RP,

        What would you expect them to do? Wash dishes at Maccas?

      • Rusty Penny says:

        Whatever their abilities can best serve them?

        I don’t understand the statement? Is it a tacit form of acceptable job snobbery for the elderly?

        if it’s not acceptable for them, why is it acceptable for youth?

        We relegate youth because of insufficient ability to do more complex jobs, in the case of youth… skills and experience.

        If the impairment for the elderly is invaldity, then what is wrong with a vocation that only requires minimal mobility, and the like?

        A job is a job.

      • drsmithy says:

        I don’t understand the statement? Is it a tacit form of acceptable job snobbery for the elderly?
        I suspect it’s more surprise at the implication there’s a career path for 60 year old manual labourers.

      • Rusty Penny says:

        I suspect it’s more surprise at the implication there’s a career path for 60 year old manual labourers.

        Then it’s a ridiculous implication.

        There’s aren’t 40 year old prop forwards in the NRL either.

        Do we tell that 40 year old “here’s money for nothing for the rest of your life”, or do we say “do something less demanding”?

        Which reverts back to “job washing dishes at maccas”

        If that’s what they only are capable of, what is wrong with that?

        The message above is that a 60 year old should be entitled to snob at that, and be entitled to the handout instead.

      • drsmithy says:

        If that’s what they only are capable of, what is wrong with that?
        Nothing, but the point being made is that it’s unlikely Maccas will hire them to wash dishes.

        Age discrimination is alive and well at _both_ ends of the scale.

      • Rusty Penny says:

        Nothing, but the point being made is that it’s unlikely Maccas will hire them to wash dishes.

        Age discrimination is alive and well at _both_ ends of the scale.

        Full employment policy instead of NAIRU will fix that in a very short amount of time.

        However my response to the above wasn’t addressing job discrimination, it was clear they felt that the job was below a 65 year old.. job snobbery.

      • Lori says:

        Yes, this is the best option and solution. But it won’t fit the FIRE’s greed.

    • coastybloke says:

      There has to be a way to stop retirees spending their super over a few years and then going on the state pension. And if those smarties with SMSFS make a mess of their investments and lose the lot, there’s nothing to stop them putting their hands out to the government too.

      • Lori says:

        The proposition for total means test will do the job, no need for anything else. One can live in a multimillion mac-mansion but won’t get any age pension and will be induced to sell or to be helped by the kids, who will inherit the house etc. It will be personal/family choice, not government enforced way of living like with reverse mortgage etc.

  2. notsofast says:

    The problem is the concept of retirement. That you work flat out until a given age and then you stop working to spend a good portion of your life doesn’t work in a country with a flat population structure where there are as many young people as old people. Quite clearly we need, in general, to keep people working well past the age of 65, albeit at a reducing level of responsibility and a reducing number of hours as they get older.

    • The Claw says:

      Quite clearly we need, in general, to keep people working well past the age of 65

      Doing what? What needs to be done so much?

    • jelmech@bigpond.com says:

      In theory its a debate to be had.

      In practice some silly bastard hiring me fills me with mirth

      Larffin so hard I’ve puked a kidney.

      • notsofast says:

        jelmech,

        The key is spending the time and effort to keep people in the workforce once they pass the age of 60 (and even earlier).

        For once a person passes the age of 60 and they are lost to the workforce for any length of time then it becomes increasingly hard to reintegrate that person back into the workforce.

        We need, as a society, to spend the time and effort to keep people working.

      • migtronix says:

        No we don’t! We need to let them/us keep more of what we earn THROUGH LABOUR! Tax indirect income for sure! But making me pay to use my brain or 2 hands and feet is serfdom goddamn it! (Apologies to the religously sensitive)

        Tax FX transaction at the primary broker level and see how much you can money you can generate!

        Incidentally, last time I went back to Europe a few months back I did what I usually do – 1 oz gold coin in my pocket and 5 silver in my luggage – but I converted bitcoins for Euros in Berlin when I got there and never needed to sell any of the coins on my stay! And the price of both the metals and bitcoins, relative to Euros, increased in the interim.

        Theres always more than one way to skin a cat I suppose.

  3. Bluebird says:

    Isn’t this why we’ve got so much immigration?

    Oh that’s right, immigration actually costs the bulk of us, and is mainly there to serve big corp and the property parasites.

    http://www.smh.com.au/federal-politics/political-opinion/more-bills-than-skills-from-this-migration-20110718-1hlgk.html

    Pathetic.

  4. rob barratt says:

    Terrific stuff. Only one problem UE
    I’m a boomer getting close to “retirement” age. I don’t have a lot in the way of a pension, but I think I have one thing, I can tell the difference between a solecism and solipsism. The problem with your analysis is that it leaves out a major issue. Age prejudice. I’ve been in IT for most of my working career. IT, like a lot of occupations, benefits as much from experience as from youthful energy. In other occupations such as engraving or stone masonry the best work is done by people of my generation. I happen to be fitter than most people half my age and don’t have the obesity problem that most of the next (you lot) generation have imposed on themselves. You can be the judge of whether I can string a few sentences together in a way that a good many of my fellow Australians could not. Most employers are blind to this. Job advertisements are everywhere using every euphemism for “young” they can think of. Your retirement ideas are useless for educated Australians until someone introduces legislation that forces employers to use a certain percentage of old farts like me in non-physical occupations that depend only on a certain minimum in the way of grey cells and a degree of work ethic. Until that is fixed it’s all hot air for people in my position. How about it professor?

    • migtronix says:

      The answer is actually simple, create your own job! Screw the idiots in His, become your own boss and undercut the HR driven dipsh*ts. I’m in IT and that’s what I did a few years back

      • drsmithy says:

        That’s in no way a “simple” solution.

        My father ran his own business for nearly forty years, and when he decided a year or two ago he needed to supplement his decimated retirement savings after the GFC, the last thing he was interested in was starting another business.

      • migtronix says:

        So? Is he more interested in applying for 1000 jobs, going to 1000 interviews with retarded barely literate HR dweebs?

        Moron!

      • migtronix says:

        That was probably a bit strong and of course there never are simple solution.

        I apologise for the unkind remark and withdraw it from the record.

      • drsmithy says:

        So? Is he more interested in applying for 1000 jobs, going to 1000 interviews with retarded barely literate HR dweebs?
        No, he lacks the capital, contacts and motivation to go through the time and stress of starting another business at the age of 67, after being out of the workforce for seven years.

        Remembering from my late teens what he went through having to start again from scratch after a partner ripped him off and nearly bankrupted us, I can’t say I blame him.

        Not everyone has the skills, understanding, or simply interest in running their own business.

        Your inability to consider someone in a different situation or mindset to your own, is illustrative. It helps confirm my observation that a near complete lack of empathy is endemic to the conservative right winger.

      • migtronix says:

        No it isn’t illustrative, you’re belief government can magically fix that problem is illustrative

      • drsmithy says:

        No it isn’t illustrative, you’re belief government can magically fix that problem is illustrative
        At no point have I ever said Government can magically fix anything.

        The only people think one abstract concept can magically fix everything are the libertarians like yourself who argue that’s what the “free market” will do.

      • migtronix says:

        But the free market will do that because in that event your dad and I are freely able to contact and use each others resources! Sounds like you’re dad was a free market guy that got screwed by the fascist close to government! Geez. Help me out here rusty

      • Rusty Penny says:

        Geez. Help me out here rusty

        Your argument is barriers to entry created by government, and economic rents embedded in the cost of living, are inhibitions to DrSmithy’s dad being incentivised to recommence a business.

      • migtronix says:

        RP: crystallised beautifully! Thanks :)

      • drsmithy says:

        But the free market will do that because in that event your dad and I are freely able to contact and use each others resources!
        No, the free market will not magically deliver the capital, contacts, motivation and life extension necessary to start up another business and make it successful.

        Sounds like you’re dad was a free market guy that got screwed by the fascist close to government!
        You apparently missed my main point with your pavlovian need to blame everything on Government. To reiterate, his experience in running his own businesses previously and the knowledge of what that would entail, led to his decision NOT to start another one. Not because of some imaginary Government boogie man, but because starting and running a business is not a “simple” thing to do.

        Your argument is barriers to entry created by government, and economic rents embedded in the cost of living, are inhibitions to DrSmithy’s dad being incentivised to recommence a business.
        And it’s bollocks.

      • migtronix says:

        So you’re saying the free market didn’t deliver that for your dad THE FIRS TIME AROUND?!?!

        What Pavlovian response? Do you know what means El Fiscal Whisperer Keynesian Supremo?

      • drsmithy says:

        You’ve lost me, champ. I have NFI what you’re trying to say or where your head’s at.

      • migtronix says:

        You haven’t the whole time smithy don’t worry one day you might have to fend for yourself and you’ll find out

      • drsmithy says:

        You haven’t the whole time smithy [...]
        Well, I’m not ashamed to admit a certain amount of confusion on how we got from noting that starting a business isn’t a simple thing to do, to something about Keynes.

        [...] don’t worry one day you might have to fend for yourself and you’ll find out
        So let’s get this straight. You think anyone who doesn’t run their own business is incapable of looking after themselves ?

        And you accuse others of being “job snobs” ?

    • The Claw says:

      Rob, One idea would be for a government department to take over the candidate selection process.
      The business would come forward with its requirements and its pay offer, govt would strip out any illegal requirements (age,gender,etc) and would select the best candidate in an unbiased fashion and would present the new employee to the business.
      It is an appalling idea on many levels, but would solve your problem.

    • rob barratt says:

      I suppose the point I’m trying to make is that the demographic crisis that everyone appears to be panicking about assumes that we are all queuing up until our 65th (or whatever) birthday when we are supposed to hold our palm up for a handout for life. What a load of bollocks. The last time I was in a hospital was to take someone down to A&E. I couldn’t believe the number of drug addicts, bloated people with “knee problems” and a whole cast of hangers on who had one thing in common, they retired at the age of 25.
      Don’t f#$%k with my team of codgers until you can you can half your 8 kilometre jogging time. I don’t often get angry on this blog, but the one thing that pisses me off is people who have the arrogance to assume that “boomers” of a certain age are queuing up to receive government benefits. When I was 21 I got $30 off the equivalent of Centrelink. That’s it. Period.

      • migtronix says:

        Dude you’re barking up the wrong tree! How many codgers do you know that actually run 8 ks? I run 5 most mornings – I’m 38 – but I do it for my wellbeing and to get the circulation moving oxygen around, not so I can bitch to 18 ylds.

        It’s not about the handouts, its about the goddam house prices!! What you bought for $55,000 on a salary of $30,000/year now costs us $750,000 on a salary of $75000/year (rough numbers but you get the idea).

        The handouts just mean that you guys get to never sell the house and earn neg gear. income while the rest of us rent!

      • rob barratt says:

        It’s the banks that brought about that situation with reckless greedy LVR policies, a spineless Labor government who didn’t change the laws on NG and FHOGs that the other mob brought in. That aint the boomers mate, that’s every Australian who can’t be bothered to learn enough about economics to force the government to do something through the media. To be honest, I don’t know if it’s a case of ignorant people through lack of media or media catering to ignorant people. Banksters come in all ages. Self interest is common to all ages. Blaming boomers is pretty much like blaming the Jews. Do you really think that when we bought a house in our 30s we had any idea of what was going to happen in a country (one of several) whose economies were going to be determined purely by RE prices as a result of greed, usury and government laissez faire?

      • migtronix says:

        A bit of stretch comparing it to the Holocaust but I get your frustration and I think otherwise your comment is fair.

        You should maybe consider however that you belligerent attitude to us young fatties is possibly just a clouded?

      • willy_nilly says:

        Rob
        1. 80% of the 5.3 million boomers will require full or part pensions.
        2. You have same some Super, not a pension.
        3. Most ignorant boomers think that they paid tax during their working life towards their own pensions. Mad as batpoo.
        4. Our deaths double in actual numbers as the boomers leave the home planet.
        The looming death bust…
        The death bust (80 years after the baby boom) must be factored into any demographic arguments and our natural growth is downhill from here on in.
        http://tinyurl.com/k3c6jsc
        http://tinyurl.com/kv3wthx
        http://tinyurl.com/lupr2sv
        http://tinyurl.com/kl6dcj9

        5. Generation equity. The agequake costs must be paid by ALL in society, not just the workers.

        We also need to tax the asset rich/cash poor (over 65′s) more.

        A. GST to 20% and raise welfare and the tax free threshold accordingly to compensate.
        B. Land tax to replace stamps and create reverse mortgages from Centrelink for those that are asset rich/cash for to pay.
        C. CGT on all property sold under 10 years. Exemptions for real reasons to move – health, babies and work. No CGT after 10 years, ZERO!
        D. Death tax on the value over $1million at 25%, rural and business assets exempt.
        E. Asset test the PPOR (value over $750k) for pension eligibility and also provide reverse mortgages exclusively from the govt, to those asset rich/cash poor. It is not fair that pensioners can live in a $5million dollar home, have $1m in cash and still get a part pension!

      • rob barratt says:

        I don’t argue with a lot of that. The UK has inheritance tax. As for people living in million dollar houses, I know a family who bought a shack on the Gold Coast in the 60′s. We went down there a couple of years ago. It’s tiny, as is the plot it’s on. The old wooden windows are jammed, the cooker dates back to Charles Dickens and it has a patio looking down 100 feet over a wild beach. The shack is worth $2.99. The plot is worth $5 mill.. What should you do about the old codger living on a pension in a place like that? At the other end of the scale, anyone who has owned a big house knows that the cost of maintaining it FAR outweighs the pension they might get. They tend to move out of their own accord. Nothing is as straightforward as it seems.

      • willy_nilly says:

        Rob
        Coast shack – a reverse mortgage should be provided by Centrelink. The owner did not ‘earn’ this wealth, no tax has every been paid on the capital gain and the taxpayers should not be paying a pension to these millionaires.

      • rob barratt says:

        Consider carefully. The issue with regard to housing is to provide a fair go for everyone. If you have a family, you need a house with a certain amount of space. If you live in cramped conditions that most apartment holders would regard as squalid (which the shack is) you are not taking more than your fair share. It’s worth $5m purely because any Highrise Harry would want to build a block of tiny flats on it, or a rich man would say – why should you live there when I have $5 million and you have nothing. Does that make the old boy a millionaire? I might agree that an inheritance tax would get a fair amount of money back to the government (to waste) on that person’s death, but I can see no moral reason why they should be treated as a millionaire living in a squalid cabin just because other people place an arbitrary value on it due purely to its location and not to a disproportionate use of land.

      • willy_nilly says:

        Rob
        Sell the shack. Does he get $2.99 or $5 million?
        Does he pay any CGT on the $5 million?

      • rob barratt says:

        The point Willy Nilly is that he’s lived there most of his life and sees no reason why a rich man should evict him. He doesn’t want the money. It’s a quality of life issue. Would it make any difference if he was a VC holder?

      • willy_nilly says:

        Rob
        You misunderstand me. I would encourage him to stay. He would not get a pension from the taxpayers however and would need to get a reverse mortgage from Centrelink.

      • rob barratt says:

        Fair enough, but I think your description of him as a “millionaire” was somewhat pejorative. An unwitting millionaire perhaps.

      • migtronix says:

        The UK has an inheritance tax and yet the landed class is doing very well thank you very much! Its by the tax they lose their fortunes, but its often via the tax fed government that they claw them back (no-bid military contracts).

        I agree with you that above all else the general population need to pull their out their arses, stop being so ignorant, and hold their representatives accountable!!

      • Mav says:

        +10 Good comment. But what do we do about the high %age of baby boomer property investors who currently negative gear, but won’t be able to when they retire?

      • willy_nilly says:

        Mav
        Approx 600,000 boomers have a NG’ed IP that they will not want in retirement. That will be the major cause of the slow melt.
        I suppose many will also be planning to use their lump sum to pay out these investment loans. So wrong in so many ways.

      • Jon says:

        Wish it was the way, but I think with immigration running at about 300k per year plus a hidden 300k foreign students (more than a few on the hunt for a home), 600k IPs can easily get sold every couple of years.

      • rob barratt says:

        I guess Mav that boomers are as responsible for their financial decisions as anyone. They will have to sell anyway. If it’s negative equity then they’ll have to declare themselves bankrupt and sell the old tea service. Tough.

      • Rusty Penny says:

        I guess Mav that boomers are as responsible for their financial decisions as anyone.

        I’d say the massive impost of negative gearing, the ludicoursly expensive cuts to superannuation and the financial pressures forcing more child bearing women against their desire into the workplace instead of nurturing kids, thus adding to the participation rate and into your share dividends are more responsible for boomers financial position than their ‘hard work’ or ‘entrepreurial talet’

      • GSM says:

        Nothing generates interest on MB more than discussing more innovative ways to RAISE taxes especially on BB’s. So let’s raise the retirement age to 70 and next will be the comments from all the whingers and whiners will be complaining about jobs being withheld from them.

        If more money needs to be found, the first place Govt needs to look is at it’s fat bloated self and the ridiculous transfers it regularly makes into the parasites making a living in the Green and welfare areas, that contribute not one cent to our productivity.Our taxes are supporting corrupt foreign regimes, hordes of PS desk jockeys , able bodied loafers and Green schemes that warehouse useless Uni grads and support non-viable ineffective projects. All of which I know are sacred to MBers.

      • migtronix says:

        +a lot. Not sacred to me mate and good to see you again GSM.

        Siddle putting some pressure on out there

      • Mr Walker says:

        “If more money needs to be found, the first place Govt needs to look is at it’s fat bloated self and the ridiculous transfers it regularly makes into the parasites making a living in the Green and welfare areas, that contribute not one cent to our productivity.Our taxes are supporting corrupt foreign regimes, hordes of PS desk jockeys , able bodied loafers and Green schemes that warehouse useless Uni grads and support non-viable ineffective projects.”

        Wow. Single best comment I’ve read on this site in a while.

      • drsmithy says:

        Wow. Single best comment I’ve read on this site in a while.
        Like most things GSM says, completely wrong.

      • migtronix says:

        Like most of your retorts, completely spurious.

        How about listing all of the stuff that’s labeled under General Administration or Assistance to Families with Children etc and itimizing where our illustrious public servants are directing those monies?

        No can’t do that or your ability to con the rest of with bureaucratic confabulations would be shot!

        My contention is most mandarins in Canberra as socialist/feminists/LGBT/Greenies.

      • drsmithy says:

        Like most of your retorts, completely spurious.
        The infographic merely helps to show what a large proportion of money is spent on things like aged care, and what a relatively small amount is spent on those lazy poor people the loon pond like to demonise.

        Australia has a quite efficient public service. This was not only reported here on MB a while back, but is also readily apparent from the breadth and depth of our publicly funded services compared to our relatively low tax burden.

        Like most anti-Government loons, GSM is more than happy to reap the rewards of a civilised country, but complains bitterly about having to pay for a small portion of it.

        My contention is most mandarins in Canberra as socialist/feminists/LGBT/Greenies.
        And my contention is you’re a far-right wing, paranoid, greedy, selfish, libertarian (but I repeat myself), close-minded, insecure, ungrateful cock.

      • migtronix says:

        Ad hominims and closed minds are strongly correlated. Hot anything else?

      • migtronix says:

        Drsmithy: BTW maybe your tax burden is low. Can I get in touch with your accountant?

      • drsmithy says:

        Ad hominims and closed minds are strongly correlated. Hot anything else?
        Taking offense after commencing the ad hominems is more than a bit precious. Especially after I _also_ addressed the points raised.

        I did it to see if you were a hypocrite as well. Unsurprising to see you are.

        Drsmithy: BTW maybe your tax burden is low. Can I get in touch with your accountant?
        Australia’s tax burden is relatively low by international standards. This is a statistical fact. It is not to say reform is not needed, or that the tax base could not be better, but there are few places in the world where you will pay less tax, and receive as much for it.

      • migtronix says:

        Ha! Study some logic! Mine wasn’t an ad homimin because I attacked no one personally just an abstract class of people any individual may or may not belong to! Fallacy of generalization sure but not ad homimin.

        You attacked me personally. Boo hoo.
        Further you are being a snob just like Rusty Penny accused you of. Your dad doesn’t have to start THAT business – a lemonade stand costs very little capital or network.

        Wanker! And I’m not taking that back.

        P.S. You address nothing your infographic is government propaganda with no itimization, it won’t pass any sane boardroom scrutiny

  5. ceteris paribus says:

    I think notsofast brings in an interesting dimension to the equation.

    Life is not meant to be frenetic work to the exclusion of all else. Yet a modicum of work can be satisfying for people at all ages.

    The industrial work structure is stuffing us all up. People stressed out of their brains in a target driven and unforgiven workforce and then thrown onto the scrap heap when “excess to requirements”. Australia is as wealthy as it has even been yet people feel pressured more than they have ever been.

    At bottom, we could change things significantly if we could manage our material desires better – overseas trips, constantly eating out, the “necessity” for private education for our children, 50K SUVs instead of 8K second hand Toyotas with another 200 kilometres still left in the engine.

    We have become enslaved by our own material desires and each of us must individually set ourselves free. Easier said than done. This requires us to work not only on our greed but on our egotism and envy too.

    Economy is not only an endeavour of diligence, effectiveness and efficiency. Economy must also embrace compassion for self and others and co-operation. And justice, between the younger and older, between the struggling and more affluent.

    We can be more than rats on a treadmill.

    • Locus of Control says:

      + 1 CP.

      I agree, I don’t think life should be lived on a static predefined trajectory or born, educated, work, retire, die, in that order. In the current economy uncertainty abounds (eg. no longer do jobs for life, defined pension plans, etc.exist) and life has a way of throwing curveballs at you when least expected (illness, unemployment, middle age crisis precipitating change of direction, etc.).

      Who wants to be reliant on the government pension any how? It offers a very straightened existence any how. If there’s anything my parents/ grandparents have taught me, it’s not to be reliant upon the government for your welfare. I intend to follow their example and

      1.) Work hard to build capital in early years. Cumulative interest, even at low rates, will see its value grow exponentially as years go by.

      2.) Set up income generating streams – commercial property, share dividends, business income, etc which can earn money for you even if you’re not in a position to sell your own labour (in the event of illness, etc.).

      3.) Retire when you have sufficient amounts of 1. and 2. in place, spend your time doing work that fulfils, but wouldn’t necessarily pay you (eg. CWA, volunteer firefighting, woodwork as a hobby, etc.) and take pride in the fact you pay tax.

      Self-reliance through the above means you’re not stuck in one of the economy’s BS jobs nervously waiting to be consigned to the scrapheap when you’re deemed too old.

      & like CP, I despair at the sheer amount of stuff people seem to need. I look at half the products in stores and wonder who has a need for any of it. It’s possible to live a very comfortable life with very little or even by simply buying things which meet your needs rather than validate your narcissism (eg. the perfectly adequate and functioning second hand Toyota sedan, rather than the new car – they’ll both get you comfortably to your destination, only you pay a $20k + premium for the *pride* st being seen in the latter).

      & I notice flyingfox alludes to reverse mortgages above. This is just getting sad. For current home buyers this means you pay a bank interest for 25 years for the luxury of owning your own home for, say, five years, before realising after paying your mortgage every week you didn’t manage to have enough left over to save for your own retirement, so you go to the bank and get a reverse mortgage to keep you in your sunset years. Net result: the bank owns your aR$3 all your life effectively – you worked to, ultimately, hand over *your* asset to the bank at the end of the day. Sad.

      • willy_nilly says:

        reverse mortgages should be provided exclusively by Centrelink as an extension of the pension Loan Scheme, which already is in place. the state should get the benefits, not the banks.

      • migtronix says:

        If only everyone was capable of such personal economy – or rather practiced because everyone certainly is capable. In fact I suspect most posters here follow something like that, I know I try.

    • Rusty Penny says:

      Life is not meant to be frenetic work to the exclusion of all else. Yet a modicum of work can be satisfying for people at all ages.

      It isn’t if we all get distributed fair share.

      However humanity, barring the developed world for the past 200 or so years, as Stephen Morris indicates in his hypothesis about our regression, is about a large number working frentically, so a few don’t have too work at all.

      before it used to be aristocracy.

      Now it’s boomers, feminists and little landlords.

      Of our 22 million population, only around 11.5 million work.

      It ties in with the two big issues I keep thumping, and have done so for longer than anyone on MB, and even prior when HnH, DE and UE were solo bloggers.

      One is the retirement age – it is calibrated so that many at the right hand side are given a free pass not to work.

      Thus the pool of workers shrinks, and those that remain working have to work more ‘frenetic’.

      The second is wage share vs profit share. People receive ‘profit’ based on the effort of wage earners. if profit becomes large enough, the recipients also can elect not to work. Thus the workers are having to do so more ‘frenetic’.

      They can get profit share via dividends, how much rent they charge us, how much capital gain they get with house price inflation, etc.

      We work more frenetically to pay for a lot of other people.

      200 years ago we started to understand that this may not be best, and as a result when labour was rewarded more, smart offspring of otherwise poor parents had greater access for opportunity.

      We are regressing because useful idiots think all this should be sacrificed for their European holiday in retirement.

    • drsmithy says:

      At bottom, we could change things significantly if we could manage our material desires better – overseas trips, constantly eating out, the “necessity” for private education for our children, 50K SUVs instead of 8K second hand Toyotas with another 200 kilometres still left in the engine.
      Had there been a more equitable distribution of the productivity improvements from the last half century, the sorts of things you attack as greedy materialism, would be easily attainable by all but the poorest.

  6. Janet says:

    New Zealand is considering the staggered option ie: Call it quits at 60 and get, say, 50% of the entitlement due at 65 until the final day, or if you’re eager and fit enough, delay taking the pension until you’re 70 and get 150% etc. Age and work are not directly linked. Not all of us will be blessed by good eyesight, brains and bodies past the age of 65. Imposing a man-made criterion on a natural creation doesn’t make sense.

    • ericskeric says:

      Age and work are not directly linked. Not all of us will be blessed by good eyesight, brains and bodies past the age of 65. Imposing a man-made criterion on a natural creation doesn’t make sense.

      Spot-on. But its an issue that is rarely part of the discussion.

      • Rusty Penny says:

        More excuses.

        If a person is so blinded at 65, they can receive some type of incmoe support… the same as a 35 year old who is blinded to a degree of being unable to work.

        Stop conflating the two arguments, they are not the same thing.

  7. krazy.galah says:

    I can imagine the dentures will be clacking furiously today at the RSL and coffee shops amongst the boomers at the potential impost of being fleeced their rightful gain of the family home while the young Gen Y’s just laze about playing computer games while they worked day and night to get where they are. A disgrace!

    They need a lobby group. Hang on they have one. It’s the Government itself.

    I was talking with a said boomer some time back and she asked what ‘we’ should do. After I explained, she very much stated that it was excellent but could you wait until I’m gone. They want to do the reforms as long as they don’t have to be included in the cost of them. Expect war from the grey brigade over the principal residence idea.

  8. innocent bystander says:

    well, I’m 62 and am quite happy for the pension age to be increased, and for the family home to be included in the pension asset test. Why?
    Cause for the last 30 years or so we have been told not to expect a pension at retirement because the govt would not be able to afford it. The demographic bulge has been obvious for ages, and was often reported in msm.
    For boomers to say no one saw this coming … well, where have we heard that before?

  9. gavinl says:

    Take a look at the 4th question and then tell me if the system is broken.

    http://www.bordermail.com.au/story/1920049/renting-property-makes-you-liable-for-cgt/?cs=24

    “I am about to turn 55 and would like to retire on my birthday. I am in a defined benefits scheme where I can take a lump sum of $1.4 million, or an indexed pension for life of $100,000 a year guaranteed by the Commonwealth of Australia. If I die my wife would receive 60 per cent of the pension – she is 50 and has no super or savings. I own my house valued at $1.7 million, other property worth $600,000, additional super worth $150,000, and other liquid assets of $400,000. As I have no debt, the indexed pension looks very attractive. I would appreciate your thoughts.”

    • migtronix says:

      There you have it. The Boganaire generation (no offense at all to Rob and all the other intelligent and ethical boomers)

      • rob barratt says:

        If I had the assets that Gavini assumes us rich boomers have, I wouldn’t be sitting here. Sadly, like 99% of my generation, I didn’t work for the Commonwealth of Australia (a cushy little number) but traveled a lot of the world actually working for a living, not forgetting of course to make an ex reasonably well off after a divorce. I look forward to a private pension of about $7000 a year. When I have to sell the house (as we will all have to) due to maintenance costs and lack of capital I look forward to many happy years in a caravan park (which, by the way, can be a very good option). That, I would guess, is a typical Boomer outcome.

      • migtronix says:

        You may be right Rob, especially re the ex/divorce, but can you concede that the opportunities you had are by and large unavailable now – largely due to the financial orgy that occoured concomitant with the boomers watch over political power?

        Edit: I suspect that female boomers have fared better but I just know I’ll get a clipping around the ears for saying it out loud

      • willy_nilly says:

        Rob
        You hit the nail on the head. Record numbers of boomers are going into retirement in debt, have little or no super and will have to downgrade significantly to survive. We must provide for those that need it and that is my point. Bot living in a $5 million shack, does not need it.

      • rob barratt says:

        I concede to both of you that the opportunities that the post war generation had are not available now. You also face the wonders of globalization.
        I should however also state as I did previously that RE millionaires have been nearly all accidental. I don’t believe that Boomers as such were behind the bankster-provoked property boom. For every Wall Street derivative merchant and wide boy RE agent there were 1000 men & woman, boomers all, who wouldn’t have known about negative gearing and took no interest whatsoever in politics or economics. What they had was the home they bought just like the previous generation. Had the same RE price explosion happened one generation later, you would all be just as guilty, or innocent of the same. One thing never changes, human behavior.

      • GSM says:

        rob,
        Get the message. Whatever it is, it’s our fault. The precious petals must have someone to blame. They couldn’t spend their lives believing their isn’t some quick fix way out denied them by the nasty BB’s. Pathetic, yes.

      • migtronix says:

        Walking deliberately into cross fire is not advisable ;)

      • migtronix says:

        No I agree that generation wasn’t to blame, I’m saying they were asleep at wheel and the next two generation down got really bad principles as a result.

        Not blaming you or my parents I just want this to f***ing change, and not Obama style

      • rob barratt says:

        OK guys, whatever. The only thing you need to bear in mind is that the word “Boomers” can only be intelligently used with regard to demographics. They can in no circumstances be regarded as the people who have collective responsibility for the actions of individuals (I’m sure those with some knowledge of history can clearly see the dangers of adopting a policy of collective responsibility..) and whatever bunch of corrupt, two faced, cowardly SOBs who one can find in politics quite irrespective of generation.

      • Lori says:

        I am still not sure what the outcome of housing prices would be when the boomers retirement time comes. Maybe all this fuss about the expensive houses will be past and the melting will leave many with no big asset price in their balance.

      • The Claw says:

        When I have to sell the house … I look forward to many happy years in a caravan park … a typical Boomer outcome.

        Has government already zoned enough caravan parks for you lot? or do you expect them to just magically appear?

      • rob barratt says:

        Too obvious a wind up Claw! I refer you to my previous text on collective responsibility.

      • migtronix says:

        Well played Rob :)

    • flyingfox says:

      I am assuming the indexed pension is part of their super and they have contributed towards it?

      • Mr Walker says:

        Yup. An agreement between him and his employer. Not much to get outraged about here, to be honest.

        And he would have been contributing towards it.

    • The Claw says:

      While the youngsters were all on twitter, this boomer was working hard for the Commonwealth of Australia and paying 18% interest on his house while also paying tax to fund his retirement.
      If we ever invent cloning vats I nominate this boomer to be the first one cloned. We need more of them.

      • migtronix says:

        ?

        At any rate he’s damn lucky the Australian government was working for him cutting rates for 30 years which inexorably accounted for the current face value of the RE

      • flyingfox says:

        You really have to stop with the 18%. the Boomer’s got a lot more out of the 18% than they paid …

        Having said I agree with you. I assume he has contributed towards his pension in some way shape or form, he is entitled to it.

        If the policy is broken, we should not target people for it unless they are exploiting something.

      • migtronix says:

        They are exploiting something – the younger generations.

        I’m not saying blame this guy of course, and yes its the incentives stupid, but still we don’t all have to be donkey’s chasing the carrot do we?

      • willy_nilly says:

        Oh dear…. Paying tax to fund his own pension… What an ignorant cohort we have.

      • flyingfox says:

        @Willy_nilly I am not suggesting that and I never have. Read the OP and my comments. The issues is a private pension for a former Gov employee not the public pension.

        Is he not entitled to one? The merits of having such a generous scheme aside.

      • willy_nilly says:

        Noted Fox.
        So, he lives to 100 and gets 45 years at $100k per year? Is it possible he paid $4.5 million in taxes during his working life? As we are seeing in the US, many are taking 3 times in welfare compared to what their total tax contribution was.

      • flyingfox says:

        Again that is his employer’s problem not his. I assume it was a part of his employment contract.

        Nothing to do with the tax system or the public pension.

        In any case, fix the system.

      • Rusty Penny says:

        Claw is taking the piss.

        He is one who recogognises the drain that boomers have been to western society.

      • GSM says:

        .. and the biggest contributors to the tax base.

        OTOH, RP is one who believes that the best reset is the final solution for BB’s to be invoked so that Y’s and X’s can inherit unearned wealth and then on those behind them.

      • Nunatak says:

        GSM.

        Generally speaking, you and I occupy different corners of the universe.

        But on this subject, we are as one.

        Whilst I readily concede that western society has, in many ways, developed into a less friendly place for its younger occupants, I am appalled at the senseless, vitriolic, and juvenile discussion that often takes place on this site whenever this subject is raised.

        If the calibre of the discussion that takes place on Macrobusiness is any measure of the ability of current working generations to address this pressing issue, then they are doomed before they start.

        This intergenerational hatred, all one-way I might add, is corrosive and destructive of our social fabric, and makes us, as a country, easy pickings for those who understand the value of social cohesion and cooperation.

      • migtronix says:

        All one way!! F**K OFF! Did you read Robs post calling us fat twittering retards?

      • Nunatak says:

        If the cap fits…. :-)

      • migtronix says:

        6’2″ and 82kg b*tch! (OK I have one of the oldest twitter accounts in the world, like 1003rd member)

      • migtronix says:

        I concede that divide-and-conquer is at play and is alive and well.

        But we need boomers to step up and help us and f***ing carbon taxes/credit ain’t doing it

      • drsmithy says:

        This intergenerational hatred, all one-way I might add [...]
        If you think it’s all one-way, you’re obviously reading through one eye.

        Plenty of boomers like GSM are all quite happy to lay the boot into younger people as lazy, computer-game-playing good-for-nothings (despite all the actual evidence showing they work longer hours and are more productive).

      • Rusty Penny says:

        They aren’t the biggest NET contributor to the tax base at all.

        As the first graph shows, all boomers are receiving more transfer payments than anyone over 16, that is direct wealth transfer.

        Of past decisions, I first iterated, then MB has published academic research to show that the welfare system has been restructured chronologically to favour boomers throughout their entire lives.

        They are also beyond their most productive period. The most productive class of people on the planet, always have been, always will be, are males between 29-49.

        Only putting in, and no real avenues to take out.

        And for your final statement, the youth of today actually have a sense of honour and feel pride in their accomplishments, they feel entitled to what they have actually earned.

        This is MB’s failings here by trying to assert this situation isn’t boomerism.

        If we had a proper economy, with no asset inflation… what would boomers have to show for their lives in terms of surplus? It has been an explicit policy to cater for this generation, to hive off lump sums from the younger generations to offer up to boomers, a generation too profligate to do so themselves.

        They’d have no savings, no surplus, nothing. They’ve spent all their own money, all their parents money and left their children in debt.

        There is no such thing as a successful species that either doesn’t want to breed (feminism) or wants to impair their children (boomers).

        Your generation is not the future, it is barely the present. You’re the past and your legacy is starting to be written.

        You are uncategorically a bunch of failures.

      • Nunatak says:

        Q E D

      • Rusty Penny says:

        *double – slow server*

      • rob barratt says:

        I believe Reinhard Heydrich said something about groups of people who were a drain on society. Of course to be fair, that was about race, not about age, for which we are of course truly culpable.

      • Rusty Penny says:

        A french queen said “let them eat cake”

        Of course you’re going to pull a parable to insinuate you’re un unfairly targetted group.

        Shaming by proxy. You’re the recipient of unearned privilege, you don’t want to let it go, its rational your feel those emotions.

        However, in every way has the effect of transfer payments been displayed.

        In the clearest expression of generational theory are the youth of today shown to be going through a great fiscal burden and having reduced opportunity that your generation at the equivalent life stage.

        The ENTIRE cause of this is the size of the burden of transfer payments going towards you lot.

        We have made the case clear, and all we get is illogical rants and dismissive slurs coming from a self peerceived position of superiority.

        Wisdom? As I said, no succcessful species harms its children.

        If you make peaceful change impossible, you make violent change inevitable.

      • rob barratt says:

        RP
        You appear to have confused bankers with Boomers where the greatest debt of the younger generations is concerned. I would also have a look at the effects of globalization (a boomer-independent phenomenon)and technology with regard to opportunities. I might also point out that your comments concerning rants and slurs do rather sound like, well, a rant..

      • Rusty Penny says:

        RP

        You appear to have confused bankers with Boomers where the greatest debt of the younger generations is concerned.

        RB

        it appears you’re flailing abuot looking for another party to offload the guilt of your actions.

        As I said, it was politically palatable for this to be structured so that people, namely youth, paid extraordinary lumpsum into the hands of the incumbent land owners, baby boomers.

        The reason for this is the boomers have spent everything they have earned.

        No current accoutn surpluses, no savings, nothing.

        As I said, if house prices stayed static, what would boomers have to show for their lives?

        A burden was intentionally placed on youth to give boomers a lump sum that they were too spoilt and selfish to save for themselves.

        Bankers were just beneficiaries because housing typcialy needs to be acquired with debt.

        This garbage about “houses are cheaper because interest rates are lower” is nonsense. if we all won lotto, we’d feel like paying 6 times wages for a houses instead of 3?

        No, bankers are beneficiaries due to the debt necessity of housing, the capital price gain is in the hands of boomers.

        I would also have a look at the effects of globalization (a boomer-independent phenomenon)and technology with regard to opportunities.

        Switch and bait tactic to divert to some other party.

        Honour means owning up to what you’ve done.

        I might also point out that your comments concerning rants and slurs do rather sound like, well, a rant..

        Again, anything to deviate the message, discredit the messenger, point to another party, spend up on the European holiday.

        You’re not introducing anything new here.

      • migtronix says:

        RP: I have to take you to take you to task re: Bankers are beneficiaries because of debt financing for housing, its because of stupid LVRs and what’s can be considered collateral these days (read derivatives).

        This is not a boomer thing but it did happen while they were too busy churning the fly-wheel to pay attention to the f***ing financial reforms being conducted under their nose!

      • rob barratt says:

        Right on about LVRs Migtronix. Perhaps RP may also note that MB bloggers are just about universally opposed to NG and FHOGs. A lot of MB bloggers happen to be over 50…
        Raising the retirement age? I suspect that with my age being X, it will be set at X+1 for the foreseeable. I don’t even think about it. A lot of boomers I know don’t even think about it. Better not to with a series of their Exs having taken the money and the house! My only concern is finding the money for private health. “Blame it on the boomers” is one way of letting off frustration at the lack of opportunity and ridiculous RE prices. Understanding the truth is preferable. The truth is, the current situation is the price Australia has and will pay for globalization and the average Ausi’s contempt for and retirement from politics. This has resulted in a rent seekers (of all kinds) party at their expense. The same would happen if you substituted any other generation for the Boomers.

      • Rusty Penny says:

        RP: I have to take you to take you to task re: Bankers are beneficiaries because of debt financing for housing,

        Then you’re doing a poor job of taking me to task, and here is why…

        its because of stupid LVRs and what’s can be considered collateral these days (read derivatives).

        Irrelevant distractions.

        When the Krueger-Dunnings of economics like to assert “The price is whatever the market can oafford to pay”, when it comes to housing “The market can afford whatever the bank will lend them”

        Thus that materialises on LVR’s, I understand that’s a behavioural issues related to the risk of banking.

        But that’s not “Why?”

        As pointed to houston, other jurisdictions have valves in place to let the heat out of housing prices, and LVR’s are relatively meaningless.

        So why have we a human construct that exacerbates the price of houses at this point in time?

        It’s because a BIG lump sum sees it’s way from the buyer to the seller.

        The sellers are boomers. The policy is created to direct large(r) lump sums into the hands of boomers.

        As I said, a lotto winner is also paying a large lump sum, it has nothing to do with banks, though they are as I said gleeful beneficiaries.

        It’s about the tolerance we display for the price setting of houses.

        A wise a decent group of human beings can see high prices are harmful to society.

        For entrepreurial opportunities, for family formation, for less frenetic work lives’

        Boomers see a 2nd trip to europe.

        This is not a boomer thing but it did happen while they were too busy churning the fly-wheel to pay attention to the f***ing financial reforms being conducted under their nose!

        Wrong.

        It is entirely a boomer thing. it is policy solely created to benefit boomers. I agree there are large cohorts of white shoed gen X’s, and other, but this was nothing more than a shift of wealth into the hands of boomers because they failed to accrue any wealth of their own.

      • migtronix says:

        RP: I disagree, by and large I don’t believe they “failed to accrue” I believe they were fleeced.

        Unfortunately they were fleeced with Neuro Linguistic Programming via Television and Film being so control by such a small concentration (again happened under their watch, there were hundreds of newspapers owners when the boomers turned 18 and about 5 when they turned 50!) but fleeced they were.

        House prices are only the short term bribe so that they don’t get so angry they vote with their brain and not greed for once in their lives — they will be relieved of that gain too soon enough if we don’t start hanging monopolists from lamp posts soon

      • Rusty Penny says:

        Perhaps RP may also note that MB bloggers are just about universally opposed to NG and FHOGs.

        yes, policy which is secular to age and has no defence.

        The wealth transfer to boomers also has no defence, other than entitlement, and that is every argument being put up by boomers.

        I for one am not that critical of NG, it’s a policy which amplifies a lot of other bad policies, but holistically isn’t unfair.

        A lot of MB bloggers happen to be over 50…

        Raising the retirement age? I suspect that with my age being X, it will be set at X+1 for the foreseeable. I don’t even think about it.

        yes, they avoid it because they don’t want to confront it or be part of adjusting to it. Like all fctes, it’s kicking the can down the froad for future genrations to deal with.

        This is a prime display of boomer behaviour. Their demographic bulge is extremely harmful. Once they pass, the impact actually won’t be that harsh.

        Thus it’s imperative to fix this aged pension reform now, but boomers are fobbing it away because they are ONLY considering their entitled position.

        it’s being spelt out clear as day why reform needs to happen now, only for churlish denials and buck passing.

        So when I’m accused of ‘nothing but ranting’ by this lot, it doesn’t carry much gravitas.

        A lot of boomers I know don’t even think about it. Better not to with a series of their Exs having taken the money and the house!

        Which empirical evidence a lot of settings are wrong.

        If a divorcee can’t re-establish themselves, then it says that any party trying to establish themselves is also finding difficulty.

        How can that not conclude itself as ‘something has to change’?

        Then examine who is embedding to political inertia to changes, or namely, which of the constituency are politicians protecting with the status quo?

        My only concern is finding the money for private health. “Blame it on the boomers” is one way of letting off frustration at the lack of opportunity and ridiculous RE prices.

        Blame it on the boomers is follow the money.

        Blame it on the boomers is see who is stalling reform despite the harmful impact being undeniably clear.

        Understanding the truth is preferable.
        The truth is, the current situation is the price Australia has and will pay for globalization and the average Ausi’s contempt for and retirement from politics.

        Globalisation is not the reason for the boomers cash grab from their youth.

        The retirement from politics, particularly from the youth is because the young feel they have exhausted all means through consensus.

        As I mentioned above above “change through peaceful means…”

        This has resulted in a rent seekers (of all kinds) party at their expense. The same would happen if you substituted any other generation for the Boomers.

        An appeal to commonality.

        No, we remember our grandparents. They experienced suffeing, they endured sacrifice and didn’t not want to see unearned gain coming at the expense of their kids.

        We have to generations of elders to recall.

        One noble and wise, the other selfish, profligate and pissing western civilisation up the wall…. DESPITE the rest of us pleading for them to stop.

        We are writing your history, your time is past.

        You are failures.

        You’re the equivalent of obese Byzatines or Ottomans. Society is crumbling around you, and all you can focus on your property portfolio and European holidays.

      • rob barratt says:

        Don’t let that anger get the better of you RP. It just reinforces your prejudices. If I get on the boat and come to Australia when I’m 50 I’m to blame right? I’m a boomer so, I have to be….

      • Rusty Penny says:

        If I get on the boat and come to Australia when I’m 50 I’m to blame right? I’m a boomer so, I have to be….

        It’s pretty trite to conclude my scope of dissent would stretch that far.

        Why are you resorting to such a strawman?

      • rob barratt says:

        Because you’ve gone too far the other way. Boomers are not collectively responsible for the behavior of individuals. People get the vote at 18 not 58. If you want to express resentment do so at the piss poor media that allows the rabble we have for politicians to rort just about everything.

      • Rusty Penny says:

        Because you’ve gone too far the other way. Boomers are not collectively responsible for the behavior of individuals.

        I approach this from a behavioural economics perspective.

        You know why non-keynesians always get it wrong, their methodology of differentiating micro and macro economics,

        For a solitary company to cut wages, is called competitive advantage. It is good

        For every company to cut wages, aggregate demand falls,tis is bad.

        Macro is not an aggregate of micro.

        A genration here in Australia, right now, has near hegemony, and it is a macro phemonenom.

        They are herding.

        Take out the outliers, blah blah, take out “I don’t do that” blah blah…

        The herd here is moving as one, for it’s benefit.

        It is rational to expect them to do that.

        But class have gone out now for a long time, that this herd has gone too far.

        The calls have been an appeal to fairness, logic, compassion, the future industrial capacity of this country, the burden of our youth, the future of our unborn children.

        And it’s been ignored, and not just ignored, dismissed arrogantly whilst conducting a character assassination of dissenters.

        There can be no ‘going too far’ against that sort of response.

        People get the vote at 18 not 58. If you want to express resentment do so at the piss poor media that allows the rabble we have for politicians to rort just about everything.

        Is MB not the new media?

      • rob barratt says:

        ”And it’s been ignored, and not just ignored, dismissed arrogantly whilst conducting a character assassination of dissenters” perhaps. But it’s not the herd that’s done it. It’s particular individuals who have a pecuniary interest in doing so. The fact that the herd by and large says nothing, is, as you say, natural self interest. The solution lies not in trying to apply the final solution to the herd but to jog the media into doing something about it. The biggest potential problem is the Ponzi immigration solution. Tomorrow’s Boomers…
        As for blogging on MB, what percentage of the national herd do that?

      • migtronix says:

        Best discussion I’ve ever read on a blog/bulletin board!! And I’ve been doing this since ’89!

        Take a bow everyone!

  10. Hector says:

    This productivity commission report is not adding up when it comes to some base suppositions.
    Here’s but one example.

    “The average life expectancy from age 15 years of a male born in the so-called ‘Oldest Generation’ between 1901 to 1925 was just over 55 years.”

    Two world wars, a depression is used as a base point to measure longevity increase. That is not proof of medical advancement, but an artificially low floor on longevity.
    They are using death by global misadventure as some kind of justification for the rate scientific advancement now, and simply projecting that into the future.
    Nassim Taleb goes into the falsehood of longevity and it’s worth a look.
    Great propaganda always contains some truth, but the foundations for this report are suspicious already.

  11. Lori says:

    OMG, the discussion is so hot. Unfortunately some people (like RP) are so badly prepared for it, that is sad and also scary if they are expressing the new generation’s way of thinking. RP must be very angry to his parents.

    Yes, there is unfair inter-generational distribution of wealth, but it doesn’t have anything to do with BBs. It has to do with the best stage of capitalism – the golden era of after war competition between the two global systems – capitalism and socialism. Never forget that.

    If the new generation isn’t happy with the government policies, go to the streets and protest against this perverse NG and everything which enrich the parasites. Do something and don’t stay on blogs for winding your frustrations or make a party, don’t wait for the boomers to solve the problems.

    Young people have always had more power than older, because they are the future. But first they NEED to understand the roots of the problems.

    • Rusty Penny says:

      So some Nikelodean pyschiatry thrown in now? Well shaming the messanger to defer accountability is not new.

      My parents view on things here is why they seek to retire overseas. I don’t experience resentment towards my parents.

      Yes, there is unfair inter-generational distribution of wealth

      Great an admission.

      So a tacit, if not explicit message things have to changes, and boomers have to stop being beneficiaries, yes?

      If this was the prevailing polity mood, there wouldn’t be any defence or resistance to change.

      It has to do with the best stage of capitalism – the golden era of after war competition between the two global systems – capitalism and socialism. Never forget that.

      Irrelevant nonsense put forward as switch and bait. For the more reasonable generations, the entitled will never have the honour to admit they have to be held accountable.

      In other words, they will always seek to socialsie the losses.

      never forget that.

      If the new generation isn’t happy with the government policies, go to the streets and protest against this perverse NG and everything which enrich the parasites.

      yes of course.

      http://stuffwhitepeoplelike.com/2008/01/23/18-awareness/

      Stuff White People Like: #18 Awareness

      “that they firmly believe that all of the world’s problems can be solved through “awareness.” Meaning the process of making other people aware of problems, and then magically someone else like the government will fix it.

      This belief allows them to feel that sweet self-satisfaction without actually having to solve anything or face any difficult challenges. Because, the only challenge of raising awareness is people not being aware. In a worst case scenario, if you fail someone doesn’t know about the problem. End of story.”

      The problem is here……

      us young people haven’t made government or boomers aware there is a problem…….

      If this doesn’t unequivocably prove boomers are simply incapable of the cognitive function, the empathy, to connect with those that are dissenting against this, then I can’t fathom what more can be done via consenus or peaceful domiciled means.

      I look at the sheer smugness, bordering on a superiority complex, on how the problem can be dealt with peacefully… when that’s the attitude confronting the dissent.

      And if you exhaust the means for peaceful change…. from a heurisitc mode of conclusion and speculation…. the dissenters will either go elsewhere, abandoning all forms of reciprocity…. or silently seethe until they turn violent.

      They won’t forget your largese or profligacy.

      They wont forget your eternal blame shifting and denial.

      Do something and don’t stay on blogs for winding your frustrations or make a party, don’t wait for the boomers to solve the problems.

      I agree wholeheartedly, with the latter. The former isn’t incongruent with acheiving the latter.

      Young people have always had more power than older, because they are the future. But first they NEED to understand the roots of the problems.

      We aren’t the ones with misunderstanding.

      • Lori says:

        I like your energy, I haven’t met such bold determination to confront the problem. But I am confused, what do you suggest, what is your plan of actions?

        I share your frustration, although I am a BB, but I am angry to the policies, which won’t allow my child to buy a home, although he works hard and saves etc. I can perfectly blame the native Australians, who own the housing pool and prevent young people to get a home. Would I be right? Of cause not. Blaming on a the basis of wrong criteria is dangerous and that is what the real culprits want us to do.

      • Rusty Penny says:

        My personal plan is now to emmigrate.

        I just came back from Malaysia, but I will write that off. I will continue my search.

        My suggestion for others is that they can emmigrate to do so.

      • Lori says:

        This is sad. I am an immigrant and can tell you that one can never find the perfect place to escape from banksters and corrupted governments. There is always a trade-off. Having said that, the best place to live is where your fulfilling job is. You have to spend most of the time working that is why this is very important. Otherwise people can live with very little possessions, but with a loving mate.

      • Rusty Penny says:

        This is sad.

        I agree, that is where my dissent, even anger, comes from. The sadness of this outcome, imposed by the selfishness and obstinance of boomers.

        I mean, I don’t know how much more awareness needs to be made, only for a smugness of ‘no, we’re not deviating’

        I know me and others like me underwrite everything the boomers have, and the only course of power I have to to remove the source of that underwriting.

        I am an immigrant and can tell you that one can never find the perfect place to escape from banksters and corrupted governments.

        I understand.

        There is always a trade-off. Having said that, the best place to live is where your fulfilling job is.

        Can’t agree with that.

        I can earn enough of an income from my net assets here to draw a middle income malaysian wage, then I can tutor English or mathematics, teach guitar and my leisure to supplement that life.

        I’ve in the embryonic stage of a location independent business as well.

        I’ve recently come to understand the cubicle I appear in every day has been toxic for my happiness, but I have to endure the conditions to pay ever increasing dividends for… take a guess.

        You have to spend most of the time working that is why this is very important. Otherwise people can live with very little possessions, but with a loving mate

        My main purpose of leaving is my son.

        I do suspect that this will resolve itself in my lifestime here in Oz, but I suspect it will be too late, around my son’s teens, and with the the impairment and disadvantange the boomers are willing to place upon me, I can’t see them not placing equal harm on my children.

        I’ve developed enough and acquired enough to make myself relatively immune from this harm, but this sort of harm at this stage of his life is criminal.

        Like protecting my children from those that would willingly abuse them, I too will seek to protect them from boomers.

      • migtronix says:

        I’m thinking back to Switzerland for a while. You?

      • drsmithy says:

        I just came back from Malaysia, but I will write that off. I will continue my search.
        Have you tried Switzerland ? I lived there for a couple of years and it was great, and everything I’ve learned outside of that experience reinforces that it’s one of the best places in the world to live.

        They even have a whole bunch of habits and norms setup to make it difficult for women to both work and raise children, so it should be right up your alley.

      • Lori says:

        I just want to add that I have never deferred or avoid accountability. If you only know my story you would be very surprised what kind of people still exist. Not only I have never been involved in IP and NG etc. and my house is very small, but I don’t expect any penny from taxpayers and won’t rely on age pension. I know to postpone any pleasure until I have saved for it. My whole life was such. How is yours?

      • Rusty Penny says:

        I just want to add that I have never deferred or avoid accountability. If you only know my story you would be very surprised what kind of people still exist.

        Then you should also know that my dissent is not generated to you or your personal circumstances.

        It is towards a broader class of people who have created this situation, and I am confortable with calling that class ofpeople boomers.

        I will exclude you from those I dissent against, even though you may be defined as a boomer, and if from this point forward you are still indignant I can only saying offence is only ever taken, not given.

        Not only I have never been involved in IP and NG etc. and my house is very small, but I don’t expect any penny from taxpayers and won’t rely on age pension. I know to postpone any pleasure until I have saved for it. My whole life was such. How is yours?

        I waited 6 years of marriage and endured countless arguments from my wife about not buying until we had both a 25% deposit, and a mortgage that would only be 30% or less of a solitary income.

        The latter was a situation that demanded a lot of patience.

        I’ve never had a car loan, bought all my cars cash outright, the most recent last year was my first ever new car, a Mazda 3.

        My pleasures in life are a kobo e-reader (content out of uni adelaide) and a squat rack and weights in my backyard.

        My best friend in a wine rep and I havent paid for wine in nearly 5 years.

        I can honestly say that my discretionary spending on entertainment and food can be as little as $10 a week.

        I spend more time reading to my 3 year old son, wrestlnig with him on the lounge room floor or digging holes in the backyard with him that I do looking at my share portfolio.

        My last windfall of uneraned money saw me give 40% of it to my wife, or to her poor parents in Malaysia.

        My trip to malaysia saw me buy one item of pleasure, a 413 facial scrub that ncosts $20 here.

        My pleasures don’t cost anything, let alone have to be deferred.

      • migtronix says:

        Peace be with you and yours rusty!

      • Lori says:

        I wish there are more people like you. But still, young man, the roots of our problems are systemic, not specific. This is the hard truth.

      • Lori says:

        “My pleasures don’t cost anything, let alone have to be deferred.”

        Pleasures always cost something – time or money, because the alternative cost of leisure is always employment income, unless you earn non-employment income or have the most fulfilling job, which give you pleasure every working day.

  12. Alex Heyworth says:

    What I find most surprising about this issue is that 30-40 years ago we were all being promised that by now a 15 hour working week would be the norm, because of the rise and rise of automation and computers. We were supposed to have become the leisure society.

    It seems to me that society has decided it doesn’t like the idea of so many people with so much time on their hands, and so has created the bullshit job. A corollary seems to be resentment that a few people have actually managed to make the leisure society a reality by taking early retirement.

    Instead of obsessing about how we can make people work longer and harder, how about we get smart and work out how everybody can work less and yet still provide for what people need and want?

    • drsmithy says:

      Instead of obsessing about how we can make people work longer and harder, how about we get smart and work out how everybody can work less and yet still provide for what people need and want?
      You need to convince the top fraction of a percent that they can still live their luxurious leisure lifestyles with a substantial fraction less than they have now.