Are baby boomers a greedy generation? This is the question being asked in an opinion piece published in the Sydney Morning Herald this week.
In the article, Tony Shepherd says baby boomers shouldn’t expect future generations to pay for their current benefits, and he quotes Harvard professor Nial Ferguson as supportive of this thinking.
“[Nial Ferguson] describes the traditional intergenerational compact as our most important social contract and one that is being broken in Western economies,” Mr Shepherd wrote.
He continues:
“We have an ageing population, increasing life expectancy, an aged pension benchmarked to average male weekly earnings (the highest possible index) and the family home excluded from the asset test.
The aged pension costs us $42 billion a year and is estimated to grow at 6 per cent a year over the next 10 years – far higher than any predictions of inflation, GDP growth and real wage growth.
A person earning $80,000 who cannot afford a home pays taxes to support an aged pensioner in a $3 million family home. That home eventually passes tax free to the descendants. Hardly fair.
As we age our health care demands increase significantly. We provide a Senior’s Health Card, which excludes from its means test any untaxed income from superannuation.
The cost of aged care and ageing is more than $13 billion a year and is estimated to increase at 7.5 per cent a year over the next 10 years. The means test for aged care does not include the full value of the family home.
Gen X and Y while being left with the bill have not complained, yet.”
Mr Shepherd goes on to write that the current legislation was designed to support older generations, and based on the assumption that the fiscal support from the resources boom was, well, without an end in sight.
“The boom is over and the government is now forced to borrow to cover the ever growing shortfall.
“The dole, refugees, single parents and foreign aid are not the problem. Support for those most in need is threatened by support for those who are more able to look after themselves.
Of course we should ensure people and business pay their taxes. The over generous super provisions are another wealth transfer from the young to the old and should be tightened while not discouraging thrift and self-sufficiency (two words slipping from our lexicon). The potential revenue from these additional tax raisings are swamped by the growing budget deficit.
On cue, the left says simply raise more taxes from business and the rich to pay for the unaffordable. This is the European model, which has been a massive failure. Countries such as Sweden have rolled back company and personal taxes to encourage investment and jobs in an economy that was going backwards. The euro area has 16.5 million unemployed and an unemployment rate of 10.5 per cent.
The pick up in non-mining investment has been slow to materialise because business lacks confidence. No matter what happens to the official interest rate business continues to sit on its cheque book. Business employs 80 per cent of the workforce and is the only true generator of wealth and jobs.
There is no growth in real wages and inflation is at record lows. The average Australian feels they are treading water or going backwards.
Higher taxes are not the answer as they will threaten the very investment and jobs growth we so desperately need and disadvantage the young. We must bite the bullet and rein in expenditure, focusing our support on those who cannot look after themselves. The Baby Boomers should tighten their belts in the interests of their children and grandchildren.”
The Audit Commission recommended a single asset test for the aged pension including the value of the family home above $750,000 for couples to be phased in over 15 years giving time to plan and adjust. We recommended that the benchmark for the aged pension be tied to average weekly earnings again with the adjustment being phased in over 15 years.
In aged care we recommended including the full value of the family home in the means test. For the Seniors Health Card we recommended that untaxed superannuation income be included in adjusted taxable income to determine eligibility.
We recommended the superannuation preservation age and the age pension age be adjusted in line with greater life expectancy. We suggested that the superannuation tax concessions be tightened because they did not appear to be working to encourage more people to be self-funded.
In July, Baby Boomers should vote for posterity and not for themselves.”
What do you think of Mr Shepherds commentary? Are the Audit Commission’s recommendations fair?
Most of the baby boomers have worked for 40 – 45 years plus. We did without all the fancy trimmings that todays lot think is their right to have whether they can pay for it or not, paid our humble 3 bed 1 bathroom homes off at 17 1/2%, never got 16 varieties of govt family benefit handouts and were told we needed to put some away for our old age, which we did when we could, only to have pumped up “experts” like you telling us we’re greedy. Go bag your head you fool. Also if you think that these “refugees” are not a strain on this country’s finances you’re an idiot. They never work or pay tax and have got their hand out for money and houses, so you have no problem giving endless handouts to them but not to baby boomers who have worked all their life. No wonder this country’s heading for trouble if you’re an example of the brain power we have. It’s people like you that give young people the idea that all retired people are bludgers so hang your head in shame and think about your old age.
You are a disgrace! The people only expect what we have paid in for Social Security since we were very, very young with the promise of that being available when we retired….of course, some individuals are not going to have that benefit and what do you, SIR, want to do for them???? let them die??????
Your story will change as you get older…..I guess you want the monies that we have paid in to be distributed amongst the millenials who are a “what have you done for me lately” generation? I have saved for retirement but I still want back what I have paid into the system!!! I have paid taxes over the past 40 years and all that money is being handed out to the welfare recipients and the illegals who are handed things right and left, no questions asked….I want my money back!
I know that you have probably written this article for your own country but the same thing exists here in America!
Thank you for generalising ALL Baby Boomers into one pot…Strange that we, The Baby Boomers, were not called greedy when the millions of us paid our taxes for 30-40 years without help from the government, without handouts, without child care assistance, working two jobs to pay off a mortgage. As a single women I was never paid equal wages, struggled to buy a house (in fact banks would not give single women loans) and superannuation was unheard of. The governments were rubbing their hands from the 70’s to the 2000s and blind Freddy could see that these same people would ‘retire’ Nothing has been said until now because we now ‘a burden’ on the system . But, you, the younger generation X are not greedy (yet) or are you waiting for the day when the baby boomers inherit our “greedy and enormous wealth?” …Everything old is new again. In 20 years the new ‘greedy generation’ treadmill will begin again when Generation Y (our grandchildren) will complain about the greed of Generation X (our children)…and on it goes – or am I generalising just like you!
I’ve worked all my life since 17. Brought up my kids, – single handed from their early teens after my husband traded me in on a younger model – and on a much lower wage paid to women in work. I had to do without – A LOT – to get my kids through higher education into decent jobs, pay off a modest home and am still working at 70 with no end in sight of being able to have good enough super to afford more than 5 years retirement before a pension is forced upon me. I don’t know where you get the “$80,000 a week wage earners who cannot afford a home pays taxes to support an aged pensioner in a $3 million family home that eventually passes tax free to the descendants. Hardly fair.” WHAT UTTER CRAP!! My home won’t bring more than $700,000 currently – hardly a major split between my kids to show for 53 years of work and still going! We had to do without owning houses, cars, furniture and had to pay it off, unlike so many of today’s “kids of entitlement” who have to have it all and have it now and spend and use our resources like they are forever replaceable, the most unsustainable, spoiled generations yet!! And now you want to claw back all the benefits Baby Boomers had put in place through hard work and going without to help future generations who now waste it all.
Now, Corruption, inexperience and ineptitude is rife throughout our current governments, they don’t look after our own nationals as well as others, now that’s unfair.
Baby boomers fought for trade unions to protect wages, the Medicare system one of the best health systems in the world, cheap education options, all of which have been chipped away and eroded by current governments and our medicines smuggled out of our country to others who don’t have our health system, all money down the drain.
Baby Boomers haven’t all retired yet but our money is fast disappearing. I want to know where all our money went and where it is going now. Inept Government has a lot to answer for.
Tony Shepherd says baby boomers shouldn’t expect future generations to pay for their current benefits,
So who will?
“We have an ageing population, increasing life expectancy, an aged pension benchmarked to average male weekly earnings (the highest possible index) and the family home excluded from the asset test.
Yes we worked hard and we did not have super like current generations and could not borrow like now current generations.
The aged pension costs us $42 billion a year and is estimated to grow at 6 per cent a year over the next 10 years –
in other countries everyone gets a pension no matter what assests they have.
A person earning $80,000
We only earnt at the same age $15K if we were lucky.
Who cannot afford a home pays taxes to support an aged pensioner in a $3 million family home.
Most people do not live in a 3 million home.
That home eventually passes tax free to the descendants.
It may be given to their descentants its their choice.
Hardly fair.
Whats fair about your comments?
As we age our health care demands increase significantly.
Yes it does so we can live a comfortable life.
We provide a Senior’s Health Card, which excludes from its means test any untaxed income from superannuation.
The cost of aged care and ageing is more than $13 billion a year and is estimated to increase at 7.5 per cent a year over the next 10 years.
What should you do shoot us?
The means test for aged care does not include the full value of the family home.
I guess you are a renter and this is your issue. Go and get a second job like we did to buy our home.
“The boom is over and the government is now forced to borrow to cover the ever growing shortfall.
Thanks to labor.
“The dole, refugees, single parents and foreign aid are not the problem.
Support for those most in need is threatened by support for those who are more able to look after themselves.
Would this be the people that fought in the war so you have the freedom to speak rubbish.
The Baby Boomers should tighten their belts in the interests of their children and grandchildren.”
We have been doing this for our whole life.
We recommended the superannuation preservation age and the age pension age be adjusted in line with greater life expectancy. We suggested that the superannuation tax concessions be tightened because they did not appear to be working to encourage more people to be self-funded.
Many are as we saved , planned, and worked two jobs. Maybe you should do this and stop complaining.
In July, Baby Boomers should vote for posterity and not for themselves.”
I vote Liberal as Labor has alway stuffed it up.
What do you think of Mr Shepherds commentary? In stead of giving advice.
As they said in Baby Boomer times get a hair cut and get a real job or two.
Liz 27th May 2016
Maree on 24 May, 2016 at 22:04
Reply
Most of the baby boomers have worked for 40 – 45 years plus. We did without all the fancy trimmings that todays lot think is their right to have whether they can pay for it or not, paid our humble 3 bed 1 bathroom homes off at 17 1/2%, never got 16 varieties of govt family benefit handouts and were told we needed to put some away for our old age, which we did when we could, only to have pumped up “experts” like you telling us we’re greedy. Go bag your head you fool. Also if you think that these “refugees” are not a strain on this country’s finances you’re an idiot. They never work or pay tax and have got their hand out for money and houses, so you have no problem giving endless handouts to them but not to baby boomers who have worked all their life. No wonder this country’s heading for trouble if you’re an example of the brain power we have. It’s people like you that give young people the idea that all retired people are bludgers so hang your head in shame and think about your old age.
TAMMY on 25 May, 2016 at 03:30
Reply
You are a disgrace! The people only expect what we have paid in for Social Security since we were very, very young with the promise of that being available when we retired….of course, some individuals are not going to have that benefit and what do you, SIR, want to do for them???? let them die??????
Your story will change as you get older…..I guess you want the monies that we have paid in to be distributed amongst the millenials who are a “what have you done for me lately” generation? I have saved for retirement but I still want back what I have paid into the system!!! I have paid taxes over the past 40 years and all that money is being handed out to the welfare recipients and the illegals who are handed things right and left, no questions asked….I want my money back!
TAMMY on 25 May, 2016 at 03:31
Reply
I know that you have probably written this article for your own country but the same thing exists here in America!
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