Grattan: War on youth intensifying

Via Grattan:

Today’s young Australians are in danger of being the first generation in memory to have lower living standards than their parents’ generation.

Older Australians today spend more and have higher incomes and greater wealth than older Australians three decades ago.

But living standards have improved far less for younger Australians. The wealth of households headed by someone under 35 has barely moved since 2004.

Poorer young Australians have less wealth than their predecessors and are far less likely to own a home. In contrast, older households’ wealth has grown by more than 50 per cent over the same period because of the housing boom and growth in superannuation assets.

It’s a myth that young people’s spending habits and lifestyles are to blame for their stagnating wealth. This is not a problem caused by avocado brunches or too many lattes.

In fact, younger people are spending less on non-essential items such as alcohol, clothing, and personal care, and more on necessities such as housing, than three decades ago.

Economic pressures on the young have been exacerbated by recent wage stagnation and rising under-employment. Older households are better cushioned from low wage growth because they are more likely to have other sources of income.

If low wage growth and fewer working hours is the new normal in Australia, then we could have a generation emerge from young adulthood with lower incomes than the one before it at the same age. This has already happened in the US and the UK.

Young Australians will also bear the brunt of growing pressures on government budgets.

Because the population is ageing, governments will have to spend more on health, aged care, and pensions. But there will be fewer working-age people for every retired person to pay for it. The number of 15-64 year-old Australians for every person aged 65 or older fell from 7.4 in the mid-1970s to 4.4 in 2014-15 and is projected to fall further to 3.2 in 2054-55.

Governments have supercharged these demographic pressures by introducing generous tax concessions for older people.

The share of households over 65 paying tax has halved over the past two decades. And older households pay substantially less tax on the same income as younger households.

Working-age Australians are underwriting the living standards of older Australians to a much greater extent than the Baby Boomers did for their forebears, straining the ‘generational bargain’ to breaking point.

Policy changes are required. Policies to boost economic growth – such as tax reform, better education and smarter infrastructure spending – are wins for all, but especially for the young. Changes to planning rules to encourage higher-density living in established city suburbs would make housing more affordable. And a fair go for younger people means winding back age-based tax breaks for ‘comfortably off’ older Australians.

Just as policy changes have contributed to pressures on young people, they can help redress them.

The time for action is now: none of us wants the legacy of a generation left behind.

Good stuff. But, sadly, Grattan can’t even bring itself to mention the real solutions just voted down in the federal election: negative gearing and franking credit reform. I guess they’re targeting what could be done by the Scummo Government.

And won’t be. “Quiet Australians” hate the young and love to see them whipped until bloody.

Full report.

Comments

  1. Absolutely right on the last point. I’m a 33 year old who left a couple of years ago, have bought a place in Europe, no intention to return. Frankly I can do without the haranguing from uneducated property millionaire baby boomer elders at family barbecues. I, with my several degrees, very frugal spending and decent wage, was never going to enjoy anything like the quality of life they had, even as basically manual labourers who would have drank half their paycheck each week they all owned their own place by mid 20s. These are the geniuses who will swing elections on issues like negative gearing and franking credits for the next 20 years – how good is Australia lol

    • Indeed. If you’re mid 30s or younger, male, and not a tradie -leave Australia. It will will be the best decision you make. I can promise you, there are far better places in the world to settle, work and have life right now.

      • Can you point me to a place that is safe, developed, English speaking, with housing on the coast within a short commute to the CBD (city of 1m+), that has lower home prices than Adelaide and is not in the US (can’t see myself ever choosing to live there)?

      • Edinburgh is a beautiful city (I have been).
        The urban population is around 50% higher in Adelaide.
        It’s close to the coast, although I’m not sure the climate would lend itself to much swimming 😂
        From what I can see the home prices are close to double that of Adelaide (comparing like for like) and the median is at least 20% more.

        The Horrible Scott Morrison MP, where in Scotland and can you provide some links to comparable housing prices?

      • The Horrible Scott Morrison MP

        Stirling has a house price income ratio of 3 times average salary. It’s about 40 mins by train to Edinburgh and Glasgow. Not on the coast but you could slum it with a view of the Wallace Monument or Stirling Castle.

      • The Horrible Scott Morrison MP, 4x according to this article: https://www.sundaypost.com/fp/stirling-named-most-affordable-city-for-house-prices-in-the-uk/

        Also named the most affordable place in the UK, so it’s not really atypical by the sounds of it.

        I had a quick look at properties and this seemed fairly reasonable for the equivalent of ~A$300k: https://www.rightmove.co.uk/property-for-sale/property-64214637.html, but to be honest someone could do as well for $300k in Adelaide and be closer to the CBD, bigger block, etc.

        kodiak, each to their own, I don’t think the US would be for me, nor do I think the quality of life would be achievable for less than Adelaide. Many times people have provided examples of areas or cities in the US that are cheaper (price to income), but they are usually riddled with crime.

      • You can remain in ignorance if you wish, Joseph. Your cartoonish view of the US certainly doesn’t fit with my experience of 30 years there.

      • I’m not sure what you mean by cartoonish views kodiak. Which large coastal city (1m+ population) would you recommend in the US which has the lifestyle, beaches and home prices of Adelaide? Maybe it exists.

        What I priorotise doesn’t need to be what you priorotise. If you loved living in the US, then good for you.

        But these generic ‘better places in the world to settle, work and have life right now’ or ‘US is better’ comments are purely subjective and lack specificity.

        Some quick googling shows the most affordable beach towns in the US have price to income ratios that are similar to Adelaide, so I would expect the cities there to be more expensive.. https://finance.yahoo.com/news/most-affordable-beach-towns-2019-120030007.html

      • What kind of an ignoramus wouldn’t consider living in the US at some point in their life, especially because of their education given by Australian media, which is probably the most feeble-minded in English?

        The more dunderheaded Aussies stay away, the better as far as I’m concerned. At least there won’t be the bogan equivalent of Earl’s court in New York City. It’s amazing that you vomit this garbage given just how far Australia has fallen in the last 25 years. You can wallow in your unnecessarily made pig sty. Moving here has probably been the biggest mistake of my life. No doubt my children will return there, though as the credit bubble hasn’t destroyed innovation.

        I could name a dozen cities that would exceed your criteria for livability. And I’m not even a nationalist. I’ve lived a 3rd of my life outside of the US. But there’s something reflexively nationalistic about being Australian when it comes to anything American. As if you just can’t help yourselves. You should be wearing signs – although to be honest, you are wearing one of sorts. Straya was pretty good 25 years ago. Not so much anymore, sport.

      • kodiak: “I could name a dozen cities that would exceed your criteria for livability.”

        Also kodiak: /provides no names/

        ***

        kodiak: “I’m not even a nationalist.”

        Also kodiak: “Anyone who wouldn’t consider living in the US is an ignoramus”

        ***

        Classic kodiak.

      • Classic Joseph – Australian nationalistic pig who couldn’t consider living in the US ‘just because”. You are the typical Aussie knob who reads too much subpar Aussie news and knows something “just because he knows something”. Meanwhile I’ve been living in your crumbling “paradise” for ten years and would leave it in a second. I hope that most Aussies have the same prejudices as you ( they do) and choose to live in their festering shizhole. You deserve it for letting television take over what used to be your minds.

      • Geez you sound bitter kodiak. You are making a lot of assumptions about me when you know nothing. Don’t paint me with your bigoted prejudices because you are struggling with a choice you made and regret.

        There are other countries I’ve travelled to that I would consider living in (EU, NZ, etc), but for the most part living costs would be as high or exorbitantly higher than where I am for the same lifestyle.

      • I’m not painting you with anything but the usual brush except for Aussies who wouldn’t want to live in the US “just because”. I’m glad that most of you have this feeling. It prevents you from getting better than you deserve.

      • There are plenty of reasons I wouldn’t choose to live in the US. I could name a dozen examples that would meet your criteria.

      • I’m sure that you have a dozen things that you are pig-ignorant about.

        The US that you see on Australian television bears no resemblance to what it’s like to live there.

    • I’m over 60 but agree 100% with your assessment of Australia.
      The only solution that I can see is to have my generation die old, lonely and unattended while locked up in their mini castles.
      Somehow we’ve created a situation where our young will become as cold hearted as my generation, the old owning a house that they’ll never part with for less than $1M while the young are denying their elders basic care….
      what kind of hatred has invaded our hearts?…
      what kind of economic system guides their population into this dysfunctional corner?
      I can’t see any other solution so I sort of hope this happens. The punishment needs to fit the crime and there can be no greater crime than to deny young families basic shelter so that the elderly can maximize the value of their assets.

      • Mate….hate to say it, but you should see forums, social media comments section, on topics of the legacy of the Boomers and how they treat and view younger people….the younger people express what they really think at places like those, and it is not pretty. I speak of international forums.

        The deep resentment of young people towards Boomers is quite severe…Boomers have no idea just how annoyed younger people are, and they are waking up.

      • So you believe collective punishment is the way to go.
        I don’t think there’s any way to avoid it, The Pendulum swings both ways
        At the moment we’re stuck at one end and doing everything in our power to hold the social Pendulum at it’s maximum extension, sooner or later it’ll swing back and whatever additional energy we’ve given the system by jamming it in one direction will ensure that it jams equally in the opposite direction. So yes there will be a Punishment for this Crime
        The absolute worst case will be occur if the swing of the Pendulum is sufficiently delayed that the perpetrators of this social crime die before the balance returns to the young in which case it’s likely that our young will get shafted at both ends of their lives.
        This is the reason that we need to stop supporting this stupidity. It needs to collapse….but alas we’re no where near the tipping point even the trend is wrong, we’re still doubling down on the stupidity.

    • Fishing72MEMBER

      Whilst I can’t argue against elder Australians who berate your efforts, I can say that it’s not the fault of the labourer who managed to put a roof over his family’s heads if the value of his house has increased exponentially. Irrespective of his voting preferences the outcome was always going to be the same with both sides of the duopoly majors hell bent on the globalisation of Australia which resulted in the scenario we now endure.

      Plenty of elderly Australians are also without their own homes and are now paying the same exorbitant rents as they struggle to find secure work and watch in puzzlement ant fear as the nation they grew up in is irreversibly altered within a couple of decades.

      The fact that the man in the street may have benefited from the process is incidental to those who’ve implemented the direction our country has taken. Don’t allow the politics of division to flourish, that only aids them in their goal.

      • WHAT?? Of course they’re responsible they voted time and time again for policies that could have only one possible outcome.
        We’re living with that outcome…Cause and Effect they’re somewhat related.

      • fisho nails this…at this juncture in the 21st century where ignorance is a choice, where is ol mate labourer? lobbying for change? no he’s not, he’s keeping his head down, going along for the ride hoping he’s unnoticed. His kids will be slamming him hopefully

  2. there will be fewer working-age people for every retired person to pay for it. The number of 15-64 year-old Australians for every person aged 65 or older fell from 7.4 in the mid-1970s to 4.4 in 2014-15 and is projected to fall further to 3.2 in 2054-55.

    Do not depend on income tax. Britain and Singapore may have no natural resources, but Australia has just about every raw material:

    LNG, lithium ore, cobalt, nickel, manganese, zinc, bauxite, iron ore, coking coal, uranium.

    Tax the export of raw materials and phase in a land tax.

  3. The Horrible Scott Morrison MP

    It easy to win a war against an opposing group who can’t work out what gender they are.

  4. BBs may have more money than Silent Generation but quality of their lives is crap in comparison (or in comparison with today’s young)
    it’s not all about money especially when one is approaching imminent end
    BBs are the most miserable older generation on record

    • Arthur Schopenhauer

      DoctorX,
      Could you expand on that point a little. My BB relatives complain bitterly about two things: the indignity of aging and young people. (Mostly about their aging bodies.)

  5. reusachtigeMEMBER

    The problem with the youth of today is that they indulge in ambition destroying activities like playing computers games, taking unsociable non-party drugs and engaging in chronic masturbation primarily due to the over consumption of p0rn rather than setting out on the hunt for real relations (see non-party drugs).

  6. “Today’s young Australians are in danger of being the first generation”

    It happened a generation earlier. The majority of those born 80s onwards (probably even earlier) had to pay HECS, had to buy overpriced property, will not retire comfortably or at all.

      • I was born in 1981. The conditions had deteriorated comapred to my parents. They have deteriorated further since. When I talk to my parents and people their age about it they kind of get it but can’t fully fathom it as their experience was so different. At the same time most of their information on the world has been gaslighting the younger generations for years. Placing the blame solely at their feet as a sort of individual moral failure instead of a societal one. Too often an attempt to broach the topic is labled as leftist propaghandi. It’s a tragedy that won’t be properly acknowledged until it is too late.

      • Even StevenMEMBER

        Yes. Born around 1980 is the cusp. Can be further divided into those who bought property early, and those who didn’t. The latter category clearly being f$#%ed.

        Subsequent to those years, there is only one category: f$#%ed (unless you have rich parents).

  7. The Horrible Scott Morrison MP

    Lots of negative Normans on this site. The fact is that everyone in Australia can buy a property, put concessional savings into super for 30 years, and retire a millionaire. But the leaners prefer to spend their time changing their genders and waving jazz hands while they overdose on testosterone destroying soy products. That’s why the youth of today are incels.

  8. Australia is in danger of producing a 3rd generation of falling living standards. If a generation spans 20 years, then we have had falling living standards for at least 2 generations already.

    In 1960/1970 a typical man would walk into a job in his 20’s, support a wife and 4 kids, run a car or two, live in a house with backyard close to work, and later perhaps buy a pool, an extension, a boat or even a holiday home for exclusive use.
    Now mum and dad both work jerbs and live in a unit with no yard, each drive a long commute on expensive tollways to work, might have 1 or 2 kids later in life and might even Uber their cars as a “side-hustle”.

  9. Most people here have no idea how power works in our society. Our political system is a sham democracy, deliberately designed to give the masses the illusion of choice while leaving the reins firmly in the hands of a small elite of very rich and powerful people, only some of whom are elderly. They own the media to shape public opinion and effectively own the politicians by their ability to provide election funding as well as lucrative career and investment opportunities after politics. They are ultimately responsible for the bipartisan government policies that really are trashing the environment and ruining (especially) young people’s lives. Nor do most elderly people benefit from them, as they are likely to own little apart from a modest house, and sometimes not even that. Less than a third of them were ever in a position to pay tax even before Howard’s “reforms” (can’t get blood from a turnip).

    The major parties (and to a large extent the Greens) offer no real choice on these issues, and any opposition is fragmented and has the media against them. They are also free to change the rules if too many people vote against them, as with the changes to preferential voting for the Senate. The major parties also have millions of dollars to spend on advertising, and with compulsory voting, they can easily frighten low-information voters and convince them that there is no alternative, so they might as well vote for the major party that will put a few more dollars in their pocket. You can blame most old people for voting for them, but then you have to blame young voters as well.

    https://www.abc.net.au/news/2016-06-10/fact-check-would-voters-aged-under-30-possible-elect-a-green-pm/7467068

    Take a good look in the mirror. Your generation voted for this.