The blatant pillage of Australia’s youth

By Leith van Onselen

The more I examine the 2016 Household, Income and Labour Dynamics in Australia (HILDA) survey, which was released yesterday, the worse it looks for Australia’s younger cohorts.

As noted in yesterday’s post, the HILDA survey revealed a rapidly growing wealth divide, whereby median wealth over the period 2002 to 2014 increased by 61% for those aged 65 and over, and by 39% for those aged between 55-64, but rose by just 3.2% for those aged between 25-34 and by only 7.4% for those aged between 35-44 (see below table).

ScreenHunter_14107 Jul. 20 07.49

However, while the percentage changes are damning enough, the actual real dollar change in wealth is even scarier.

As shown in the next chart, the oldest two age cohorts – 65 and over and 55-64 – have experienced a massive increase in real wealth of $249k and $233k respectively over period 2002 to 2014, whereas under 25s have experienced an increase in real wealth of just $4,175 and those aged 25-34 years old just $4,497 over the same period:

ScreenHunter_14117 Jul. 20 15.17

The fundamental driver of the gulf in wealth is rising home values. As shown in the next chart, the older age cohorts have experienced huge increases in home equity, whereas 25-34 year old’s home equity actually went backwards over the period 2002 to 2014, due in no small part to a huge rise in mortgage debt:

ScreenHunter_14120 Jul. 20 16.51

While young home owners have gone backwards in real terms, the HILDA survey also showed that actual home ownership has collapsed for younger cohorts, whereas those aged 65 and over have experienced stable ownership whereby roughly 75% own a home:

ScreenHunter_14108 Jul. 20 07.53

To add further insult to injury, entry level homes skyrocketed in value between 2002 and 2014, making the dream of home ownership even more difficult for younger Australians. As shown in the below table, the 10th percentile of homes – i.e. the cheapest homes on the market – had grown in value by 108% between 2001 and 2014, compared to 47% growth for 90th percentile properties at the top of the market:

ScreenHunter_14121 Jul. 20 17.05

Moreover, the older cohorts have increased their share of investment properties, thus helping to shut-out younger Australians from home ownership (see below table).

ScreenHunter_14122 Jul. 20 17.08

Overall, this HILDA release paints a picture of the systematic pillage of Australia’s youth and should be a rallying call to arms.

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Unconventional Economist
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  1. Thanassis Veggos

    good thing we didnt need no friggin statistic to know this 5 years ago.

    you know what would be a scary statistic? one that would count:
    a) how many oldies understand that the young did not get themselves into this mess because “they buy too many ipods and lattes”; and
    b) how many young actually have a clue just how fucked they are.

    I’d give a 10% for both.

    • Nah, for the oldies, its around 100%. They’ve been told that many times.

      Its what makes boomers the most sociopathic generation of all time. They’ve been told so many times yet are indifferent at best, sadistic army worst, when it comes to youth suffering.

      • Thanassis Veggos

        Ι dont think they get it, they are macro/financially illiterate as are most of us.

      • Generations don’t have agency RP… you can’t just take decadel groups and assign every out come you don’t like or agree with too it…. errrrrr…

        Per the OP… the pillage started in the 70s when wages and productivity diverged, where wages were replaced with increasing amounts of credit and reliance on speculative income e.g. equities et al… all backed stopped by forced savings in 401K or Super…

        Disheveled Marsupial… now after decades of Greenspan and BFF creating massive bloat…. the whole thing could let one rip that would wipe out high percentages of imaginary gains…. then there is AGW… 27C today with 28C tomorrow…

      • The Boomers are too narcissistic and avaricious and the kids are too financially illiterate.

      • “Boomers are too narcissistic and avaricious”

        Care to back that up with anything other than your personal opinion.

        Disheveled Marsupial…. or religious zealotry…

      • I will, “greed is good, greed is right”, remember your little boomer 80s mantra? Frigging boomers

      • I think that intergenerational inequality voted for by generation honey badger is excellent evidence of generational narcissism and avarice.

      • Hopefully within 20 years the Boomers are ALL dying a shitty cancer , dementia painfull DEATH!!!
        They have no empathy or sympathy for anyone other then themselves. They don’t want housing or super or their entitlements to change. They have worked hard Fucking the youth and are enjoying it.
        Fuck them , untill they collectively stand up and realize how fucked up they are they can go and DIE.

    • Gen X of course has the highest level of investment properties. Meaning they are in line to succeeding the boomers in wealth as the boomers die off.

      And, of course crowding youth out of the housing market.

      • Luckily for Australia’s youth, Gen X Treasurer, Scott Morrison, and Gen X Finance Minister will stop that, along with enough Gen X MPs in a tightly balanced Parliament.

        Indeed, with the Senate so tightly locked since 2010, gen x MPs, though no longer young themselves, surely have been battling on behalf of the young, right?

      • Stewie Griffin

        Read the link Emess – your generation has debauched money supply because your “savings” are in your house prices, and now they’re breaking the intergenerational contract by selling it off to the highest foreign bidder. You should hang your head in shame instead of trying to deflect it to younger generations.

        As for ScotMo, generational boundries are fuzzy, and what the fuck does it mater if he is GenX when his mindset and the policies that got him elected and have kept him there, are the ones that most appeal to your generation of creeps.

      • “debauched money supply”

        Wellie there is you’re problem right there…. you don’t know wtf your talking about… bad case of money crank will do that too ya….

        Disheveled Marsupial… no wonder you come off as some quasi religious zealot ascribing all woe to multi billions off the cuff…

      • Stewie Griffin

        It’s not me you rotting carcass of road kill stupidity – the quote is from Mervyn King, ex-Governor of the BOE and probably one of the more enlighten members of your generation.

      • You mean Mervyn King who was Greenspans doppelganger to the other side of the pond….

        “After becoming Bank governor, King explained that Bank of England policy was “similar to that of the Federal Reserve” under Alan Greenspan. Greenspan described his approach as “mitigat[ing] the fallout [from the bursting of a bubble] when it occurs”.[13] King agreed with Alan Greenspan that, “It is hard to identify asset price ‘bubbles’.”[13]

        Other warnings about the UK housing market followed, including from the National Institute of Economic and Social Research in 2004[14] and the OECD in 2005.[15] King noted the “unusually large” difference between the RPIX and CPI at the beginning of 2004 (the latter does not include house prices as part of its inflation measure, whilst the former does),[16] and, six months later, that UK house prices had risen “to levels which are well above what most people would regard as sustainable in the longer term”, having increased by more than 20% over the preceding year and more than 100% over the preceding five.[17]

        In 2005, The Economist described the run-up in UK house prices as forming part of “the biggest bubble in history”,[18] and, by October 2007—when the UK housing bubble was at its peak[19] — the IMF was reporting that the UK housing market was “overpriced by up to 40 per cent”.[20] As noted by the OECD, house-price volatility “can raise systemic risks as the banking and mortgage sectors are vulnerable to fluctuations in house prices due to their exposure to the housing market.”[21]

        Dean Baker in The American Prospect said the failure by Greenspan and King to tackle the bubbles in their respective countries’ housing markets resulted in catastrophic “fallout” when the bubbles burst, resulting in the worst recessions in both countries since the Great Depression.[22] UK–US inaction may be compared to action taken by China[23][24][25][26][27] and Australia.[28]”

        So after screwing the pooch after being in charge of monertary policy in the run up to the GFC they now run to their gwad….

        Former Bank of England head Mervyn King joins Alan Greenspan in advocating gold ownership

        Phew and after all that…. King entered the House of Lords on 22 July 2013 as a crossbencher, taking the title Baron King of Lothbury.

        Disheveled Marsupial…. your a dead set nutter stew….

      • Care to reconcile events against your pet theory’s Stewie….

        Were the boomers in charge of, responsible for monetary or economic policy – ??????? – and then when it all blows up say it was all unforeseen…. then fail upwards to a comfy perch in Academia of House of Lords…

        Disheveled Marsupial… I have an alternate theory…. where people that can’t think for themselves get religion about some econnomic blovator… and when they fuck up royally can’t deal with the cog dis attached…. so they have to create scapegoats out of whole cloth to pin the rubbish on…. sorta like the narcissistic thingy some allude too in this thread..

      • Stewie Griffin

        Road kill, I was going to reply to your earlier wikipedia waffle, but I got tired of humouring you – obviously that was the right choice as your Pavlovian anticipation of a response and then being denied has driven you to continue to post more rubbish – excellent.

        Try as I might, I just haven’t been able to disconcern any point you were trying to make other than your usual intellectual preening and peacocking.

        Now why don’t you just go scratch that itch by running along to the bathroom and rubbing one out?

      • Word salad saez what – ????? – look when your done ring holing merv like a good boy you might find that everything on the wiki link is attributed. Its the totality of that you have to refute and not speaking in tongues or making vacuous assertions.

        Disheveled Marsupial… do you have a string on you back too – ????

      • Stewie Griffin

        That would be a puppet – I’d accuse you of being a muppet, but you already have your head up your arse.

      • You still have not address that Merv was a key player in setting up the conditions which culminated in the GFC…. contra to your man lov…

    • Until someone makes the effort to explain the problem in a slow, clear and patient manner we will be stuck with this lack of understanding. If either the Labor or Liberal leader made the effort it could be done. They are currently the only ones who can get an issue onto the front page of a paper for an extended period of time. That is what is required to start to shift the views and knowledge of people. Another party could niggle to make this topic an issue, but Australians love their authorative source. You give people two pieces of information, one being established nonsense from some old guy they’ve seen on tv a few times, the other being well a well reasoned argument based on facts, they’ll generally go with the former.

      • Seems like an appropriate spot to insert that famous Upton Sinclair quote
        It is difficult to get a man to understand something, when his salary wealth depends upon his not understanding it

      • Stewie Griffin

        +1 CB
        A tactical choice of the BB to be the stupidest generation. “I don’t understand” “please explain it to me” “We need another inquiry” “Now we need another study” …all the while time ticks by and they get to avoid their comeuppance for that little bit longer.

      • Stewie, as the years roll on, Australia’s youth are going to be increasingly asking their gen x elders, what they were doing.

        Being the biggest cohort of investment property holders on the one hand, which is what they are doing, vs getting angry on the internet, which is all talk. Well, I’m sure Gen X will have an explanation that will wash with those succeeding generations.

      • Stewie Griffin

        Don’t you worry Geezer, you’ll know it before anyone else when we start fixing things.

      • LOL Stewie. Have a look through history. Pick any Revolution you like. The revolutionaries are all young when they start doing things. Geez, even the boomers were on the streets in their teens against Vietnam, Apartheid, for gay rights, women’s lib etc. What social cause did your lot ever put themselves out for? Lol!

        Your lot has left it waaay too late.

        If any body’s going to do anything, it’s going to be gen Y or Z or whatever. The time for gen x to do anything has passed you by.

        Which is why You need to have something better than “Grandma and Grandpa made me do it” or “I called people names on the internet”, when they come for You with the noose.

      • Stewie Griffin

        Very true Emess, and I’ve said many times that GenX are unlikely to be anything other than the Boomers unwilling lackies, given enough scraps from the table to make it worth their while to work to perpetuate their scam, but never enough to lead in their own right.

        Real change won’t come from GenX, but from the Millennials and those who follow. To quote another Boomer who you might be familiar with, before he turned into another ageing irrelevant doofus:

        “When you ain’t got nothing, you got nothing to lose”

        GenY are that generation – they’re going to be the next Hero generation, only the enemy won’t be the yellow man, or the black man, but a generation of assholes who’ll do everything to preserve their power and wealth.

        While I’ve previously said that the best that GenX can hope for is to help influence their views, that may not be entirely correct.

        Just as the Boomers have been running the shop, either directly or through GenX catspaws who’ve adopted their values for the opportunity at power, chances when change comes it will either be an older millennial, or a GenX who has adopted their values and understands their motivations and what appeals to them, who’ll be coming for your generations assets in the night…. My only goal has been to whisper in their ears, making sure they know who the true enemy are… #TheSelfishOld

      • You know stewie, I agree whole heartedly that there’s been some decisions made screwing the middle class over.

        Where I disagree with you is this: It was the likes of Thatcher and Reagan, pre-boomers, who started the rot.

        Then, along came the boomers, and agreed with what sounded reasonable at the time.

        Then along came Gen X. Same.

        Next is Gen Y. What exactly are they doing about it? They are now halfway through those years where humans rebel and make step societal changes. Where’s the street demos and class action like we saw boomers getting arrested for in the Vietnam and Apartheid struggles?

        So, my difficulty with your approach stewie is the growing cognitive dissonance between your assertion that “it’s teh evil boomers”, and the fact that three and a half generations have their grubby paw marks on the situation.

        You want to blame a single generation for something that was introduced by their predecessors, continued by the boomers’ successors, and now half way through THEIR successors. Why are those who are equally guilty being given a free pass?

        In order to go forward, ALL those responsible need to be outed, and pay their dues. Not just one single generation out of three and a half, with four coming up.

  2. Perhaps all those soon-to-be-unemployed greyhound trainers can put their hammers to good work on the old

      • “How did you get from the above piece to your post?”

        Easy. While young Australians vote Green, nothing for them can or will change.

        Greens stand bye and watch 300k skilled migrants come to Australia a year. GenY therefore do not have representation in Australia. They vote for the wrong people.

        Population growth is biggest threat to GenY than anything else times 10.

        Like I said, your cohort “not so bright”.

      • It’s up to your cohort if you get this before you lose everything (wages, housing, amenity, environment, education, opportunity, hygiene) or afterwards.

        I’m just trying to steer you to the obvious, because your entire group are blind to being a frog in boiling water.

      • I’ve seen Richard take a post about cat grooming and turn it into a bile and invective laden rant about how the Greens are the Devil.

        All constructiveness, no emotion.


      • Mate, I’ve been around a long time. I’ve watched this unfold. I predicted it all.

        GenY are being robbed and not only are they not able to see it, they want to abuse me for pointing it out. To be honest, I find it tragic but amusing.

    • Stewie Griffin

      Richard, GenY are like North Koreans believing they are in a workers paradise – being bent over and financially violated by older generations is the only reality that they’ve ever known.

      They look at the wealth that #TheSelfishOld have amassed for themselves and believe that if they stick with it they too will be wealthy old cunts in 40yrs time, they have no realisation that the Boomers wealth is nothing other than a massive form of generational rent seeking.

      Take a look at EVERY significant economic policy in the west – monetary, fiscal or trade, each and every one of them are designed to protect the wealth of a generation of parasites.

      Monetary – do I need to point it out? Low interest rates keep the assets that have arise from their mal-investment inflated, allowing them to extract an unearned, undue and unreasonable economic rent from the next generation who’ll need those assets.

      Fiscal – the contribute nothing generation. Slashed income taxes right throughout their working lives, loaded the taxation system with one sided generational perks that has left the tax system riddled with generational loopholes that enable them to contribute nothing, nada, to the running of this country or the future or benefit of the following generations.

      Trade – they’ve opened the boarders to capital, allowing the mercantilist policies to rape and pillage the financial heritage and capital of the country, simply so it can deliver to them cheaper goods, that young people can increasingly still not afford, flood the country with cheap labour with no concern or interest in the manner it is decimating wages and the future of their children.

      Mark my words, there has never been a more narssasitic collective generation of greedy cunts to walk the face of the earth than the Baby Boomers. My only hope is that they live long enough to see the world that they have created implode, their precious quality of life destroyed, their financial assets evaporate and spend the final years of their lives in complete destitution.

      • Great post. I agree entirely. Everything has been geared to the boomers. The longer it takes for GenY to find political representation the more damage done. Population growth and sale of farm land, housing and business’s to foreigners MUST be stopped (clearly, they have to sack the Greens).

        “My only hope…their precious quality of life destroyed, their financial assets evaporate and spend the final years of their lives in complete destitution.”

        GenY are too soft for that to happen.

      • Goodness such vitriol!
        I’m guessing that you haven’t worked around many narcissists if you hold out hope that they’ll one day realize that they actually created the mess.
        Trust me, after a life time of full immersion with these guys I can guarantee you that they never recognize their own finger prints when they “initiate” a detailed root and branch, forensic analysis of the whole snafu.
        Mind you I’ve also come to the conclusion that the only thing worse than an unaware Narcissist is a Self-aware Narcissist.

      • Stewie Griffin

        The Greens are idiots with their open boarders and their progressive attitude towards immigration an open boarders… the only thing that will sway it is appealing to peoples irrationality, and in my honest opinion taking control of the far right.

        Throw up boarder protection, unravel the ponzi scheme – it might make Australia poorer in total, but do you know what, all the benefits of flowed to the top or the job thieves they’re letting into the country.

        So if globalisation hasn’t made me richer or any better off, than anti-globalisation isn’t going to make any me poorer or any worse off.

        If the cunts running this place aren’t going to share it, fuck them, push away the pillars and bring their whole fucking temple of self enrichment down upon them, then everyone can spend the rest of their days scrabbling around in the rubble on equal footing… if you’re not going to share the fruits of globalisation, there is no fucking way I’m going to let you keep it.

      • Stewie Griffin

        The vitriol is coming from 5 years of never working harder in my life and seeing my net pay increase by less than 4%, backwards in real terms by 6%, while rich old cunts fly off to Europe for their annual winter/summer holiday, as their tax free portfolios earn them more than I make in a year.

        If they don’t have the realisation of whats caused their fall in fortunes on their death beds, all the better, #TheSelfishOld can die alone, confused and afraid, covered in bed sores for all I care.

      • Richard – do you have ANY exposure to people under the age of 30? I ask because it sure as hell sounds like you don’t.

        The way in which you dismiss an entire generation of people based on the misconception that they vote for the Greens and therefore deserve whatever pain they get is concerning at best and smacks of intentional misdirection at worst.

        It’s tiresome and if there was a posting equivalent of a pen licence, yours ought to be taken away.

      • “I’ve met those same people. It is who they are.”

        Yeah Richard…. everyday before a shave…. chortle…

      • fitzroyMEMBER

        A few Observations. I agree with what you say save for fiscal matters. The top rate of income tax and GST and levies and uplift is similar to the 60% provisional tax rates as they once were. I think that there should be a review of the banks power to lend money into existence, as this entrenches the status quo. I think there should be a capital transfer tax to soothe Piketty’s concerns. It is important to remember a large group of people are outside the financial stereotypes you have outlined. Work must be rewarded and at the moment it isn’t. There are not enough taxes on capital.

    • I struggle to as they just followed the path of least resistance. That is what most of us do most of the time. It is those who are paid well to prevent us from taking this path that I blame.

    • Stop picking on our basket-ballers, little Spanish man with the Siberian hampster

  3. I don’t think it’s particularly useful, as Skippy said, to say that generations per se have the agency to cause this. It’s systemic, no?

    My dear old mum had a convo with me about how she as a boomer (still working her butt off to leave something to us btw) felt under assault re: intergenerational theft. (Suppose I should stop posting links to MB i/g theft posts on Teh Facebook and post cat videos instead to keep the familial peace).

    She has a point.

    • Know IdeaMEMBER

      I tend to agree. It is not a conspiracy, but a simple matter of a very large group of people in a given demographic moving through the life cycle. Of course that will have a social impact. At every stage of life this group has had a large effect in Western societies and has brought about great change in light of the societal circumstances of the day, and will continue to do so. With the benefit of hindsight, some of the change turned out ok, and other of the change not so ok.

      But that was then, and this is now. Perhaps it is time to move on from indicating how people in that demographic are believed to be part of the problem, and to give rise to some statesmanship and leadership about how we are all going to provide a workable solution for all, including the so-called Baby Boomers. Now I know that has to come primarily from our political leaders, but it wouldn’t hurt if we all were willing to individually exhibit some of the same characteristics that we expect from them.

    • Boomers are the new praxeology and like that ex nilhio axiom it can explain everything….

      Disheveled Marsupial…. its kinda weird how some cling to tropes and then run with them… then carry on about narcissism and personality disorders…

      • Is the place where I’m suppose to take a bow?
        The thing you never seem to understand is that I simply play the cards I’m dealt.
        It’s also in my nature to play the hand as well as I know how, so I use all my technical skills to win. The game is neither moral nor immoral it’s just the game of life. The Arbitrage game that I love to play is strictly for big boys, so I don’t loose any sleep over the fact that others might end up running home to mummy crying.

    • Skippy – the need to google Latin doesn’t endear you to me.

      As always, it’s not clever, it’s completely unintelligible.

      That’s your schtick, we get it, but be advised most people skip over Skippisms without learning anything.

      • Don’t see any Latin above and its quite clear i.e. like prax – one uses a term d’art to attach all kinds of negative pejoratives too, like war, theft, or in this case blatant pillage, then throw up a bunch of numbers and maybe some scary graphic charts, but what does this really tell us – ????? – about the changes from 50ish years ago… till today. 50 years ago a guy with a high school education could find a good job which would last more than a few years and provide a sole income house for a family [see two income trap]. How is this relative today, what are we really comparing.

        Like I’ve said before, I have watched the whole RE debacle blossom from Calif back in the 80s, not that Friedman had anything to do with deregulation in the 50s as a propagandists for the developer lobby. Its just that some miss the early signs and then heads explode after it becomes dominate.

        Like Calif some are now confused about Sydney and Melbourne where unless your parents can help or your making 6 figures you have to move out to the outer suburban sprawl. Boomers had nothing to do with it.

        Disheveled Marsupial… I moved from Manhattan Bch CA to Boulder CO only to watch it happen all over again…. its an industry template where banks and developers make huge sums…. the customer is just the mule…. but yeah… boomers…

      • Identifiable events in history is not prax mig-i…

        Disheveled Marsupial…. I sorry you spent so much time falling into the narrative others created for you, rather than studying what was actually happening, one is an act of faith and the other not. Btw I saw over at ZH they had old Hans-Hermann Hoppe with his biblical waxing, he’s in Istanbul, Turkey now… hahahahaha~~~~ so karma like….

  4. MB: Can we please have this in a non html format so we can post on Facebook? I posted the link but Facie is not picking up a content excerpt as it normally does from WordPress.

  5. reusachtigeMEMBER

    BORING! Seriously BORING! I’m off to play Pokémon GO, it’s proper fun!!!

    • Talk about getting back at Boomers.
      The other day I was picking up my daughter from school and she wanted to join all the other teens catching Pokemon. I said OK but only realized later that the Pokemon “training center” was in the middle of a cemetery. So I sat back and watched the action as teens ran around all over these graves while some older boomers tending the precious graves of their forefathers had heart attacks chasing the teens away with their walking sticks and walking frames. It was so funny I thought I’d bust a gut laughing.

    • I was nearly hit by a car at my tram stop this morning. The driver was playing with her phone. I slammed my hand down hard on the bonnet and she held up her phone to point to it as if to suggest it was ok because she was on her phone. I can’t be certain but I think she might have been playing Pokemen go.

  6. Blaming a whole generation for the actions of few is not fair. I have boomers for neighbours, one who is barely surviving but is happy and the other one with 3-4 motorbikes and few properties and who takes 3-4 holidays a year and still complains about shit…
    The same way i have friends my age (Gen Y) who want to take 2 overseas holidays a year and only drive the flashest cars then complain that they don’t have money to afford a house or even a meal at a restaurant. On the other hand, i have friends who’s been working hard for a decade, who take a holiday once every few years and drive modest cars but have a property or two and can afford to eat out when they want.
    Generalisation simply isn’t fair. It’s not like boomers sat together and decided let’s all do this. And to people who say they voted for this, i don’t recall everyone voting for Howard/Costello or whatever government at the time that took decisions that we are paying for now.

    • It’s more than not fair, it’s counterproductive and glosses over the root causes of the growing inequality, not to mention alienates potential allies who just happen to be in an older age group. It’s true that younger people are disproportionately negatively affected, but that’s just a function of timing, it’s taken this long for the negatives of various policies to become blatantly apparent.

      It’s much more about class than chronology.

      • Yes, I was thinking the same myself. Blaming boomers doesn’t help anybody.

        It’s not as though all the boomers conspired together to bring about the mother-of-all housing bubbles. Believe me, if boomers had any inkling that their house, when they bought it for say, $100 – $150K years ago would have gone up between 10 and 20 times in the intervening years, they would have bought tons more properties. It’s only been in the mid-90s that property really started taking off, after a surge in the late 80s, and there was talk in the early 2000s that the bubble had to pop. Nobody could have foreseen that prices would reach the stratosphere they way they have done.

        If you want to blame someone, blame successive governments made up of boomers and Gen Xs. Again, it’s not the generation, as most people really don’t have much of a say, if any. But it was the government of the day, throughout the years who have implemented and fiddled with rules that keep prices rising. And it’s the government who could make changes to lower those prices, if they wanted to. But they don’t want to.

    • These are the most sensible comments so far, after so many that are simply hate speech. The truth is that the politicians and media have been framing this class issue as an intergenerational issue. They want the peasants blaming each other and fighting among themselves, rather than uniting against them. Some people here are silly enough to fall into their trap.

      The vast majority of older people derive no benefit from the “grey gouge”. Only about 8% of Australians own investment properties. Since baby boomers are about 25% of the population, it is clear that the vast majority don’t have an investment property. Superannuation tax concessions are of very little benefit if you are on low wages and can’t afford to save much, likewise tax exemptions for the elderly, if you would be very little above the tax threshold in any case. The aged pension is not generous by OECD standards. All of the “grey gouge” measures that help rich old people are entirely due to the framework of laws and policies created by the major party politicians to benefit themselves and their rich mates.

      The median voter age is now 50, and even the youngest baby boomers are older than that. So why haven’t these pure-as-the-driven-snow, victimised young people voted all these politicians out? They have the numbers. This table is from 2013, but it shows that the overwhelming majority of the young people who bothered to vote voted for the major parties.

      If this is an intergenerational issue, then it is like turkeys voting for Christmas. It is more likely that a lot them were conned, just like most of their elders, or they are voting for their class rather than their generational interests, because they expect to benefit from the present system through inheritance.

  7. casewithscience

    I have been reading too much mainstream media – I read that headline as “the blatant priviledge of today’s youth”.

  8. Gen Y Home Buyer

    What do you think it will take for this to change?
    I have little hope these days, the scraps of hope say that increasing numbers of renters may lead to political change, but I won’t hold my breath

    • FiftiesFibroShack

      It will take demographic change and a shift in the mindset of policy makers. Gen Y don’t have the numbers and will need support from those following them, policy makers will need to start thinking past the next election.

      We’re seeing the beginning of the end as far as generational participation in the Ponzi goes, but policy from the RBA through to government schemes can keep this going for a long time yet. Having said that, I would be very nervous buying a unit in Sydney with all the new supply coming through.

      I don’t see this so much as a boomer problem, it’s just plain old boring Ponzi scheme – those above are rewarded via hopeful new participants. If this goes on long enough Gen X and Gen Y will be seen as the problem.

      I wonder, how many Gen Y homeowners were voting to end NG and the CGT discounts? How many of them are complaining about the falling the cash rate and the woeful lending standards of the banks?

      Don’t get me wrong, there are plenty in all age groups that don’t see their house shooting up in value as a result of their hard work and investment skill, but they’re a minority when it comes to the ballot box.

  9. Every year, we have a large family Xmas, where all my Aunties, Uncles, grand parents etc come together to celebrate Xmas and get seriously drunk. They are all working class people who have worked all their life, and have accumulated millions in their super accounts and are sitting on millions by owning their own homes. I am surrounded by multi millionaires who live in a blissful state of life lunching, dining and drinking most weekends.
    At some point during the Xmas party they corner me (probably because I work in a bank) and all ask the same questions – “I have some spare money to invest, where do you recommend I put it?”
    I tell them to give it to their children and grand children, and they find that quite funny.

    • Just thought you could make it more specific by telling them to invest it by paying of their children’s or their grandchildren’s education debts.

  10. Well things have changed a little bit – boomers are now no longer denying the blatant bias towards their back pocket anymore – now its just not their fault, so you can still FO

    • Know IdeaMEMBER

      Could it be a matter of framing the discussion? For example, if you present the debate as an “us against them” argument, you will likely get push-back as it is seen by those losing benefits as a zero sum game. An alternative is to present it as: a more even distribution of wealth within the community will be advantageous to all those in the community over the medium to longer term, although it may involve some short-term hardships being encountered by all.

      • Matt…

        The attack on Labour has been ongoing since the 70’s, there is heaps of stuff like the Powell memo, Reagan and Thatcher and economic schools with ridged ideological bent they all got their policies from.

        Yet some are determined to make this all about the slippery term d’art generations and agency… which imo is all based on the Rancid – Public Choice – theory and its core axiom of “maximizing utility agents” in a model using binary identities… some how this can be comported to multi millions in a dynamic and asymmetrical information fantasy land.

        Sure Polies pay attention to demographics, its all part of the social PR business and shaping the narrative – See:

        This series is about how those in power have used Freud’s theories to try and control the dangerous crowd in an age of mass democracy. Sigmund Freud, the founder of psychoanalysis, changed the perception of the human mind and its workings profoundly.

        His influence on the 20th century is widely regarded as massive. The documentary describes the impact of Freud’s theories on the perception of the human mind, and the ways public relations agencies and politicians have used this during the last 100 years for their engineering of consent. Among the main characters are Freud himself and his nephew Edward Bernays, who was the first to use psychological techniques in advertising. He is often seen as the father of the public relations industry.

        Freud’s daughter Anna Freud, a pioneer of child psychology, is mentioned in the second part, as well as Wilhelm Reich, one of the main opponents of Freud’s theories. Along these general themes, The Century of the Self asks deeper questions about the roots and methods of modern consumerism, representative democracy and its implications. It also questions the modern way we see ourselves, the attitude to fashion and superficiality.

        Happiness Machines. Part one documents the story of the relationship between Sigmund Freud and his American nephew, Edward Bernays who invented Public Relations in the 1920s, being the first person to take Freud’s ideas to manipulate the masses.

        The Engineering of Consent. Part two explores how those in power in post-war America used Freud’s ideas about the unconscious mind to try and control the masses. Politicians and planners came to believe Freud’s underlying premise that deep within all human beings were dangerous and irrational desires.

        There is a Policeman Inside All of Our Heads, He Must Be Destroyed. In the 1960s, a radical group of psychotherapists challenged the influence of Freudian ideas, which lead to the creation of a new political movement that sought to create new people, free of the psychological conformity that had been implanted in people’s minds by business and politics.

        Eight People Sipping Wine In Kettering. This episode explains how politicians turned to the same techniques used by business in order to read and manipulate the inner desires of the masses. Both New Labor with Tony Blair and the Democrats led by Bill Clinton, used the focus group which had been invented by psychoanalysts in order to regain power.

        Disheveled Marsupial…. Politics and Governance is a – Business Now – and can only be discussed in the jargon of said mental framing….

    • Not necessarily. Or should I say, there will be change, but not necessarily in the way you want. Many young people will inherit huge fortunes. There will be a greater divide between the haves and have-nots. The haves might be the ones running the country. Or maybe the Chinese will run the country if they buy up enough of our land and properties. Or we might be living under Sharia law. Anything’s possible.

      • To reiterate.

        Change will only happen when boomers and gen X are 6 feet under.

        And good riddens to both.

        Whatever follows will follow.

      • There’s an aged care facility waiting just for you. And they’ll happily melt away whatever baby boomers have accumulated. Ah the joy at watching self-centred fortunes evaporate.

    • Um no…. societies are the result of their foundation myths e.g. they only change when that changes…

  11. That’s why they employ 457 visa workers in the aged care industry. If they employed younger Australian’s enemas would be part of their daily routine.

    • The boomers have no clue what’s in store for them in aged care facilities.
      All the immigrants theyve appily allowed in will “serve them well.”

      Payback time for gluttony and turning a blindeye to our kids.

      • Lol…..would have posted ‘ROFLMAO’ but too seriously truthful to be that hilarious.

  12. Leith
    Quick errata.
    2nd chart down “Median Household Wealth by Age” should have “Age Group” as the x-axis title instead of “Percentile of Income”.
    Otherwise solid analysis. Basically an outworking of rising housing prices AND lousy job market for Gen Y as some entry level jobs have been outsourced and therefore the rest bid down. Which makes it very hard for Gen Y to buy a house. The only consolation for the rest of us is that the Boomers, for all of their wealth, struggle to earn an income at current interest rate levels. Would be interesting to see distribution of income by age.

  13. Cannot wait for the under 25 to 34 year olds to become highly successful in their political futures – in the very near future:)

  14. Get real Leith, yes of course your wealth is going to go up after the kids leave home. After youve sunk everything you eaver earned into educating the little bastards and keeping them at home unemployed till they are 25 or more instead of the old 14,. well guess what you are suddenly going to have a lot of disposable income just like childless and gay couples – and that is going to translate into wealth.

    Much is concealed in the averages. If you lose your job or dont have one in your fifties you are going to be unemployable and you are going to watch anything you ever earned dissipate very rapidly. If yoiu get divorced your wealth will b ecut in half. I have watched my household wealth go down from close to 2 millioon to a few thousand in about 7 years; and that is without any sort of conspicuous expenditure such as travel of even a new car.

  15. Get real Leith, yes of course your wealth is going to go up after the kids leave home. After sunk everything you ever earned into educating the little bastards and keeping them at home unemployed till they are 25 or more instead of the old 14,. well guess what you are suddenly going to have a lot of disposable income just like childless and gay couples – and that is going to translate into wealth.

    Much is concealed in the averages. If you lose your job or dont have one in your fifties you are going to be unemployable and you are going to watch anything you ever earned dissipate very rapidly. If you get divorced your wealth will be cut in half. I have watched my household wealth go down from close to 2 million to a few thousand in about 7 years; and that is without any sort of conspicuous expenditure such as travel of even a new car.

  16. Leith Van O……….”and is a call to arms”…………….Absofukinlutely!

    Again you are one of our hero’s Leith, thanks, but also well done for the work that you put out here! You belong to a relatively small group of others worthy of our thanks;

    Catherine Cashmore
    Don’t Buy Now
    Renegade Economist
    Anne Pettifor
    Steve Keen
    Philip Soos
    Etc etc etc all who spew out the truth for the masses. What we are seeing in the world now is the melting of the economy just as you guys have tried to warn the political class about but whom did not listen because they are in the pockets of the bankers. Well its all kicking off now isn’t it boyo! I guess its going to get more and more shocking…………