The ageing population is a challenge, not a burden

All this talk about the ‘burden’ of an ageing society is starting to feel personal. It’s enough to make you reach for the Botox. Here’s what a friend wrote to me last week: “I have found it quite distressing lately that the emphasis seems to be on what a burden I am about to become – having hogged all the jobs, I am now about to hog too big a share of taxpayers’ money. I reckon any elderly people suffering depression and lack of relevance to another human being could be tipped over the edge the way things are going.”

In the UK and US ‘selfish’ baby boomers are under constant media attack. In Australia the generational war is also alive and well. Baby boomers – born between 1946 and 1964 – are routinely presented as trouble. Because of the sheer numbers, their future demands for health and aged care will threaten life as we know it. In the meantime, according to Deputy PM Warren Truss, they’re living it up, splurging their superannuation on “a few cruises and the luxuries of life” before falling back on the Age Pension.

It’s facile to blame an entire generation for the nation’s budgetary ills. The real problem is not the 5.5 million disparate people now in their 50s and 60s – it’s the policies that enrich some older people at the expense of others; it’s policies that widen the gap within the generations as much as between them. Baby boomers are not all rich or white, and they’re not all on cruises. They include Aborigines unlikely to reach advanced old age and post-war migrants who got stuck in declining manufacturing industries. About 200,000 people in their 50s and 60s are on Newstart, the unemployment benefit. Baby boomers write to me of shocking age discrimination, and of precipitous falls from middle-class life into poverty due to later-life divorce, unemployment, illness and bad luck.

And baby boomers aren’t all spongers: they support adult children living at home and, under new Newstart rules, will be doing so until they’re 30. They mind grandchildren for unconscionable hours and look after elderly parents. Many are working for longer than did their own parents – well into their 60s. They’re the big charity donors, volunteers and social activists. To borrow Mr Hockey’s Budget night theme, they’re contributing. Those who talk about the ‘burden’ of ageing neglect to mention this positive contribution; and those who hammer the ‘selfish’ theme overlook the many on Struggle Street.

However, there’s no denying significant numbers of people in their 50s and 60s have done extremely well thanks to the property boom and government policies. They’ve been enriched through negative gearing which allowed them to accumulate two or three houses; capital gains tax reductions, and family trusts. And the advance guard have gained access to the Age Pension (and heavily discounted medicines) at quite high income and asset levels ($1.1 million in assets on top of the family home). Above all, superannuation tax concessions, including abolition of income tax on super payments, have delivered huge benefits to the well off. And they’ll never have to work till 70…

John Daley, CEO of the Grattan Institute, told me the median household wealth of people aged 55–64 is $850,000; a decade ago for the same age group it was $550,000, adjusted for inflation. If economic growth falls below 2.5 per cent, as is possible, the generation – now in its 40s – will never be as rich as boomers. For the first time, a younger generation could go backwards. “It’s already happened in the UK,” Daley said.

But not all baby boomers can be blamed for demanding and voting for policies that skewed benefits to the well-off. Where could they go? Both major parties spruiked the super tax concessions. Only a few lonely voices warned of the future drain on revenue when John Howard doubled the generosity of the Age Pension asset test, as he desperately sought to shore up his well-heeled base. We shouldn’t be made to feel like we’re a terrible burden as we grow older. Australia is a rich, low-taxing, low-spending country by OECD standards. It manages to find money for fighter planes and the Iraq and Afghan wars. It can fund its growing health and aged care needs; the question is how fairly it will do so.

Last week’s Budget ushered in policies that will be harsh on young people, on some families, the sick, and the unemployed. But the major reforms needed to have significant impact on revenue – tackling the super concessions, the generous means testing for the Age Pension, closing tax loopholes –  have been put off for another (election) day, and so may never happen. Older Australians – and their lobby groups – should acknowledge not all older people are in the same (cruise) boat, and save their anger for changes that hurt the less well off. Pegging pension increases to CPI rather than to wage rises is harsh; taking super income into account for the Seniors Health Card is not.

Poorly targeted benefits going to people who don’t need them rob the young who face ballooning education debts and housing stress; but they rob many older people, too. In a decade’s time, 40 per cent of older people will still be poor enough to qualify for the full Age Pension. They’ll need decent government-funded health and aged care services. Older and younger people have a common interest in policies that lessen the divide within the generations, as well as between them.

Do you feel you’re a burden? Have the young got a case or are older Australians being made scapegoats? Please share your thoughts…