DOES THIS MAKE YOUR BLOOD BOIL?
The City News has been updated today, so for those who are interested, here is the article.
The cost of providing pensions to boomers and retirees is coming at the cost of an intergenerational war as younger people start to bridle at the economic weight of carrying Australia and its feted pensioners forward. ALEX DUNNIN beats the drum.
THE richest people in Australia are the baby boomers and retirees who collectively control the lion share of Australia’s wealth, real estate, super fund assets and share markets.
How ironic then it is that these same people who, after years of accumulating wealth on the back of sustained housing and investment booms and continually getting tax breaks, incentives and subsidies, have just won a review into their pension entitlements.
However, 10 of the 13 interest groups represented on the review panel, being aged care, pensioner and retiree lobbyists, means we hardly need to wait for the report or join the 11 city and regional centres public hearings roadshow to figure out that they’ll be recommending the $14,000 a year age pension is too low and that it needs to rise urgently.
If only younger people who no longer get free university education or health care, or who are locked out of the housing market by these investing boomers driving up home prices and causing the worst housing affordability crisis in living memory had this kind of political muscle.
But with two million age pensioners, the government had little choice, despite these age pensioners already receiving $26 billion in annual benefits, a figure that they are committed to lifting anyway following the Budget decision to relax the rules around how age pensions are indexed.
If you think these are tough words then it’s time you caught up with what’s happening in the blogosphere and what’s being written in newspaper letters to the editor pages because signs are emerging that young people are beginning to tire of all the handouts that seem to continually get thrown at the boomers and retirees.
Add in how generation X and Y are the ones who are now expected to make the economic and lifestyle sacrifices needed to fix the climate change mess left to them by their parents and forebears and it could reach a flashpoint.
However, the tension stepped up a notch when Prime Minister Kevin Rudd announced his plan to promote Asian languages in schools, causing a flurry of newspaper letter writers identifying themselves as pensioners to demand any language funding be instead immediately diverted to their pension cheques.
Given that the Budget surpluses that fund the post-60 superannuation tax breaks and that will fund the future pension increases are the direct result of our booming economic relationship with Asia, China and India, this is tantamount to a declaration of generational war.
But if it’s a problem now, it’s only going to get worse as the number of age pensioners doubles over the next 20 years while the number of working taxpayers they will be dependent on for their pension payments increases by only half.
And if young people feel ignored now, imagine how they’ll feel when they learn that this growing age pension expense is not only going to be a bigger drain on our national Budget but the requirement to lower national taxation rates so we can compete in a tougher global economy increasingly dominated by a low-taxing Asia means there will be even less government money available for education, health, housing and national infrastructure.
However, the pension problems of today’s retirees do have a silver lining. It shows young people why taking their superannuation and long-term retirement savings seriously is so important, unless we want to end up like today’s crop of struggling complaining pensioners.
Super might have just had its worst year on record but we must never forget that super and all the tax-breaks it offers will always be the best-possible structure for long-term saving. The sooner we climb on board that money train the richer and more powerful we will become, too.
Alex Dunnin is the director of research and editorial at the Rainmaker group.
An article by Alex Dunnin in the current issue of City News, a free paper in Canberra, has me so angry. Front page heading is "Do These People Make you Sick - they will if you are young and starting to realise the cost of providing ever increasing pensions to baby-boomers and retirees, the richest people in Australia who collectively control the lion's share of Australia's wealth. Alex Dunnin says an intergenerational war is emerging as younger workers start to bridle at the economic weight of carrying Australia's feted pensioners." This disgusting article is continued on page 13 under the heading "Why the young are getting cranky." You can google the complete article by going to Australian sites and type in CITY NEWS . I would like to see this publication inundated with responses, but I would also like to know what the participants of this site feel about it.
Alex Dunnin is the director of research and editorial at the Rainmaker group.
Yep, sure does! These people obviously don't have any close relatives trying to survive on a pension. They need to try living off $270 a week! And the politicians too for that matter! At 54 I'm at the younger end of the 'baby boomers' and on a Disability Support Pension. That's it. No 'accumulated wealth', I have a small amount of Super...and I mean 'small', not even enough to buy a new car...I own no real estate, have no investments and I rent privately. Some of us baby boomers need the governments help.