Welcome to Eureka Street

back to site

AUSTRALIA

The radical state of being content

  • 12 April 2018

 

The federal budget is already being pitched as boomer-friendly. At a recent doorstop in Port Macquarie, Prime Minister Malcolm Turnbull declared, 'we've come here to meet the people that Bill Shorten wants to rob'. He added words like 'disrespect', 'picking pockets' and 'cash grab of older Australians'. He later visited a retirement village in Beenleigh.

As Labor continues to tinker at fiscal structures, old chestnuts like 'intergenerational warfare' and 'the politics of envy' will be lobbed at them, too. It'd be a mistake to take this narrative for granted.

The divide is one of class, not generation. There is no other way to explain the 'tsunami' of older women under housing stress or homeless, caught in the same conditions as millennials and GenX-cuspers. There is also no other way to explain persistent, cross-generational disadvantage in regional and outer-suburban areas. The common denominator is lack of capital. 

Boomers have been cast as the villain in the piece, but it is the asset-rich subset, who benefit from Howard-era offsets and rebates, who are most resistant to changes in tax policy. Some of them are in parliament, where they can more directly defend the status quo.

They often do this by talking up savings, ennobling older generations as self-funded while disparaging younger ones. It is an incomplete picture of the conscientious retiree. The divergence in wealth accumulation, according to Grattan Institute director Danielle Wood, revolves around asset price.

The average person aged over 55 who purchased a house before prices took off from the late-90s is a millionaire. That doesn't make them good or bad people, and they certainly don't need to feel aggrieved about being objectively wealthier than many Australians.

But they can accept that their wealth is less about collective virtue than sheer timing, reinforced through a tax system that rewards property ownership and shareholding. Having an entry point into that system is an advantage by default. That has nothing to do with character, and everything to do with inequality.

 

"In Australia, the richest one per cent controlled 23 per cent of wealth in 2017, a three per cent increase from 2013. That doesn't happen on its own, as if good things only happen to rich people."

 

The average household in the 64–74 age bracket is $500,000 richer today than in 2003, but the proportion who pay tax has halved (to 16 per cent). 'Let them keep their money,' the rhetoric often goes — but that is precisely what

Join the conversation. Sign up for our free weekly newsletter  Subscribe