Hockey’s hinting at pushing up the retirement age. Something’s got to be done, but if you’re banking on a political solution, or relying on the pension in retirement, it’s a risky strategy.
Joe Hockey put raising the retirement age back on the agenda over the weekend.
The economic case is pretty clear. The pension is looming as one of the biggest drains on the budget going forward, and Australia needs to get on top of it.
But there’s nothing new here. The population data are pretty steady and predictable. We have a very good idea of how many people are going to be around in the next ten to twenty years.
And we’ve seen it on the political agenda before. Labor pushed the retirement age back from 65 to 67, which in turn followed Peter Costello’s lead, in what ended up being called, a little unfairly, his “work ‘til you drop” policy.
And so the “ageing crisis” gets a run every few years, normally when a new Treasurer looks at the numbers and pees himself a little a bit.
Take a look at this chart here, for example. It comes from the Treasury in Canberra. Using ABS population projections, they expect health care costs will expand from 4 to 7% of GDP, and aged care costs will double from 0.8 to 1.6% of GDP.
Sorry Mr Hockey, do you need a moment?
It’s a bit of a scary thought – just how much all that health and aged care is going to cost you. Especially, if you’re already worried about where the budget’s heading.
And the burden of the baby boomers moving into retirement will be felt for a generation. It eclipses any political or economic cycles – and threatens to hammer them both.
Because it’s not just that we’ll have more retirees to look after. We’ll be doing it off a shrinking per captia economic base.
For a long time, Australia’s demographics have worked in our favour. Each year we had better and better dependency ratios. That is, there were more and more working people for every person who couldn’t work (because they were too old or too young.)
But that turned (a sharp!) corner in 2010, as the first baby boomers started entering retirement. And the dependency ratio just gets worse from here on, depending on what assumptions you’ve got about future population growth (see chart).
You also see it in the participation rate. After increasing year after year for many years, engagement with the labour force has started falling. Partly this is cyclical, but partly it reflects the weight of population moving into age brackets that don’t have such high participation rates.
Another good way to get a sense of it is to look at the number of Aussies in their peak working years (45 to 54), and the number of elderly who are 65+. That’s what this chart shows (thanks again to MacroBusiness).
What it shows is that in the thirty years running up to 2010, these two were in lock step. For 30 years, the number of Aussies in the peak years was equal to the number of elderly.
But from 2010 on, that story changes dramatically. The peak year Aussies is still growing at trend, but there’s a massive ramp up in the number of elderly. It’s a pretty major change in the constitution of the Australian population and economy.
And what it means is that the ageing of the Aussie population is going to put more and more burden on those who are working to support those who can’t.
And the way that burden is generally expressed is through taxation. The working people pay tax to fund government-delivered health and aged care.
And so that’s the shot across the bows we got from Hockey this week:
“We have also got to recognise that there are unique costs associated with that and you have got to ask if the current system is able to cope with that on a sustainable basis.”
Translation: “We can’t go on like this. Either get used to less, or be prepared to pay more tax.”
But this potentially sets the stage for an intergenerational war.
Because imagine it comes down to the crunch. You could end up with the situation where either the working young have to pay more tax, or the elderly will have to accept less generous conditions.
Which one will you vote for? Well, it depends on how old you are!
And the baby boomers will be just as powerful a political block as they are now. Plus, they already control a fair chunk of the country’s wealth. It could be father against son, mother against daughter, the rise of retirement village militias.
So what can we do about it?
Well, as Hockey points out, it probably requires a bit of sacrifice of personal interest for the national interest. (This includes making sure that the government pension is only going to those who actually need it!)
But on a personal level, I wouldn’t be holding my breath for a political solution. Politicians on 3-4 year electoral cycles haven’t shown themselves to be that good at dealing with problems across generational time frames.
So do we ‘work til we drop’? That’s hardly appealing. Especially when you consider there’s still a bit of a stigma against employing anyone over 60. How do you think you’ll go once you’re 75.
And who wants to work more any way. The whole point of building wealth is the financial freedom that comes with it, including the ability to retire early.
… not later!
No. To me, it’s more motivation to take charge of your own finances. If your plan is to let the government to look after you, it’s a risky strategy. Better to look after yourself, and the best way to do that is to put the time and energy into your wealth strategy now.
And I mean right now.
You’re not getting any younger.
my name is not important says
I read the other day that when the pension age was set at 65 years the age most people died was about 55 years – so basically people were “working till they dropped” now with greater longevity and “entitlement” attitudes that has changed. There needs to be huge shifts in attitudes, expectations, self responsibility and education so people are able to support themselves in their retirement and maintain their health for as long as possible. Codes and regulations need to be adjusted to allow “tiny house” and earth ship type building developments, with their lesser drain on resources. The upcoming advances in energy production where nanotechnology (see the TED talk by Justin Hall-Tipping) will allow us to go “off the grid” and produce and store electricity from our window panes and manage heat inflows, with a by product of water. It’s time to champion self sufficiency and self reliance – when people are freed from the ever rising costs of energy and huge mortgages / rental payments etc. the issues of the “retired” population will lessen significantly and be much more manageable. Once the “tipping point” is reached and the greed, power struggles and scarcity economics are history all these issues will be resolved – and we have to be envisioning and working towards that outcome NOW.
Citizen says
Baby Boomers are still the majority block, so they will still continue to have their wishes taken care of over everyone elses. Democracy at work….
Eileen says
It does no good having the young -v- the old people attitude. It’s not the old people’s fault they got old, nor the young people’s fault they’re expected to pay for them. Remember the old were young once and they had to pay for their ancestors who went before them.
Many old people drifted into a pension. They had little or no savings and expected the government to look after them. They had no super schemes as we do now. We should learn from our mistakes. We should expect to look after ourselves in old age. There must be a compromise now between higher taxation and lower benefits on the government pension scheme. Neither parties can afford it, but something’s gotta give!
brenton says
funny thing you say.low income earners are forced to be low income earners.the selected wealthy and pollies wont and need this.and is it there hard earn cash that support the young or elderly.NOPE.as a society we support each other.they call it tax.young ppl have to pay more tax.fees for education up.bills food etc etc .pensioners have all just received letters from government with decrease payments.but bills and living sky rockerts.i hate when we get pay increases.you get a dollar but expenses cost u 5.so to me your 4 bucks worse off.dont know how many pensioners in aus.but the thousands I assume out there got there letters dam quick.and for those who deal with centrelink.its slow as a wet fart floating through an elevator.
Chris Smith says
I don’t feel sorry for the people who had a good job and who have over spent on new cars every few years, extravagant holidays and the biggest TV that they can fit through the front door.
They had the ability to provide for a comfortable retirement but never used it !
The people I feel for, is those with little education and low incomes ….they need to be assisted with social security .
There is a saying “there is no satisfaction without gratitude”
We are blessed to live in the greatest country on earth .
Con K says
Chris, I totally agree with your comments regarding those who spent their money on the “good life”, but I would go one step further. For over 15 years we have had unprecedented free education and learning resources via the internet, not to mention the previous 50+ years of access to public libraries.
Therefore, low education and low income is a choice some people have made. I would not feel sorry for them.
Those for whom I feel sorry are those who are injured, incapacitated or have some ability issues which preclude them from designing a fabulous life, no matter what the challenges.
For everybody else, there is no excuse. There is plenty of room at the top, success is open to every body, no matter how old, how smart or how educated. It is simply a choice ………
Kerry Smith says
Here! Here! For almost a generation, thanks to Whitlam profligacy, free tertiary education was available to everyone, and at the end of it you were almost 100% assured of obtaining employment. If a person failed to take advantage of it, then “Let them eat cake”. My children and others of their generation finished their tertiary studies with a massive debt hanging over them, and job prospect about half the rest of the work force. They’ve been locked out of the home ownership by policies that have allowed house prices to rise beyond their ability to repay a house loan almost in the rest of their lifetime. Do you think they are going to be affable to supporting “the real ME generation” in its time of need, when it failed to support them in their time of need? Do you think they will want to fund people, through the taxes they pay, who failed to plan for their retirement, because of the bad habits they developed and the bad choices they made. Do you think they will want to continue to fund pensioners to live in single unit residences, to smoke, to drink, to go to the club and play the pokies as they please. I don’t think so! Get used to working longer. It’s the reality.
Ken. says
Baby boomers are what kept this great country going when their forefathers dropped dead from the toll they suffered fighting to keep this great country free. All I ever hear from is all the scum that came here for nothing, and bludged on the work of the baby boomers and their parents and descendants.
Ken. says
Give Hockey and all bludgers a cane knife and put them out in the mid summer sun in North Queensland to slave on a banana farm and they will soon squeal like the fat soft pigs they are and they will scream for a reduction in the age limit by at least 20 years. Also, competition is so fierce in business that that is their problem. Opportunity, or (choice,) is often a fantasy and excuse of the rich who raped their fortunes off the mentally under privileged.
Thomas says
The concern I have is when the baby boomers come to sell off their retirement assets or cash in their super accounts to go and enjoy their retirement. This may flood the market with assets throwing out the supply and demand ratio – perhaps an excess of supply will lead to reduction in price! That’s how it works doesn’t it? Take a look at Japan, they are still working through their baby boomer equivalent bubble and their economy has been been out of first gear for years.
Just another view on things.
Correction says
…..haven’t been out of first gear for years.
Robert Kline says
Hi Interesting statements/comments. The pivotal year was projected back in the early1950’s, that 2011 would be the peck of the Baby boomers. Govts around the Western world have been well aware of these statistics.Much of the Super “schemes” have been too late in their implementation. Singapore was much smarter & is certainly much better prepared for what is next.
The next stage will not be particularly pleasant for many. It will be interesting to
see how they attempt to “rape” the Super industry . We may well see a very hostile, Gray revolution.
Cheers
Eileen says
Speaking as a baby boomer I have no intention of selling up and cashing everything in. The first rule with investing in property is never never sell! I hope to be able to live off the income it provides. I don’t think the bb’s will distort any figures if they’re smart. I have travelled a lot over the years and I think that Australia is still the Lucky country. Where else could I buy property with the bank’s money and have the tenant pay the mortgage?
Glenn Woodley says
lets all start a panic “to make a panic”, in a crisis it takes 3 hrs for a IGA type store to run out of food & anarchy prevails,,,practice your shooting skills!
Caroline says
We need to provide for ourselves in retirement. This should be a key motivator for generating wealth. But so many people are driven by the consumer mentality, and lack the discipline to pay off their debts asap and accumulate assets. Most people aren’t adequately funded for their retirement.
The government pays for the infrastructure required such as public hospitals to look after our health.
It seems that proper planning and implementation has not taken place. We will also be paying heavily for all the money that has been recklessly squandered by previous inefficient and deceptive governments
Sigi Scherrer says
check out the figures on how many folks are in nursing homes, how much money they have, how long it takes them to be penniless, how much the government has to pay for them.for what period of time and how many % of GDP that will be. Give us a bit more of statistics Giaan.
AngryAussie says
We have a huge problem in Australia and have done for the last 25 years or so.
This is how I see it at least. We have such a large country and a small population. Of that small population we have less than 50% working full time. The govt of the day, whatever persuasion is always ready to sacrifice industry and jobs plus essential services for cold hard cash.
The reason they do this is because they have a view that their only concern is to BE concerned about how they will look as they perpetuate the mess of this countries finances over the next 3 years.
THIS NEEDS TO CHANGE ! The entire way the country is run needs to change, how we are governed needs to change, the reasons we do certain things as a nation needs to change and we need to stand up when there are some things that must NOT change.
For 25 years Australia has attempted to emulate social policies from much larger economies such as the UK and USA. Which is ridiculous really. Just look at the size of the share market in Australia as an example.
The truth of the matter is that if this wonderful country slipped under the waves tomorrow, nobody would miss us. With the possible exception of the US military. Australia who ??
Spending reform has to take place from the top down, not the bottom up.
Our Govt needs to put on the table where our hard earned taxes are being freely spent by them !
And WE need to APPROVE their spending, how much and on what and to whom !!
Govt officials need to be 100% accountable for their decisions just like you and I .
We have too many councils, too many tiers of govt, too many social policies that are eroding our society and what this country stands for. It is incumbent on the public to start taking more interest in what is going on behind the scenes and why.
Stop watching football and cricket so much and use your grey matter a bit more.
Read newspapers, talk to people, discuss things, open up debate. LEARN about where you live for heavens sake.
Only a COMPLETE overhaul of our system of Govt will fix this mess we are in.
It has got nothing to do with how much penny pinching we can take from public hospitals and services.
Australia has the highest number of public servants and politicians than ANYWHERE else in the modern world !! THIS IS OUR FIRST PRIORITY TO SORT OUT !!
So take an interest in why that is, take an interest in why jobs go overseas, take an interest in why corporations are allowed to utilise foreign slave labour markets and still sell the product to you at the highest price the market can stand ….. not what the product is worth.
Then ask yourself why our politicians allow and facilitate this. Ask yourself how did this country support itself for 200 years on cattle, sheep, mining and heavy industry turn into a nation dependent on foreign students, foreign cars, foreign cheap food, and 457 visa’s ?
Ask yourself why are houses so expensive, why is food and essential service such as water and electricity so expensive ? Why do we pay so much for cars, trucks, land, rates, transport, roads, bridges, fuel, public buildings etc .
Why do Coles and Woolworths have such a stranglehold on the nation ? why do we pay top dollar for inferior products and services ?
Who decided we should be part of a global economy ? and why ? who benefits from this ?
Finally, learn to ask all these hard questions and research the answers, if you can get them.
But most important of all understand that the govt has a vested interest in keeping its population uneducated about matters of significant importance.
The best example of this is the much touted unemployment figures.
So we have 6% unemployment do we ? Really ? Do you think we are that stupid and ignorant ?
Try and find 1 document provided by the Govt that shows openly and transparently exactly who is NOT eligible to fit into their criteria for classification as unemployed. I pray someone can find this.
As a nation we are being conned and lied to every day by the people we are supposed to respect and revere as they go about what is in the best interest of their political party NOT the nation.
I should close here but these views are open to discussion on my new website at http://www.angryaussie.com.au along with anything else the public feels we should educate ourselves about. Please feel free to register and participate, its a brand new site eagerly awaiting population by those who can share views and opinions, thoughts or experiences.
Have a great day and lets get Australia back to being Australia !
Eileen says
They say people get the government they deserve…………..
Well perhaps that’s true. No one puts pressure on the candidates to cut foreign aid, (in particular to Indonesia) which I call racketeering since I get the impression they might cause us problems if we stop the aid.
Why help them build their army with our cash? The boats Julia Gilliard sent them to detect the illegal boat arrivals to Australia were deployed to the north of their country! I didn’t realise the people smugglers took them on a scenic tour via the Philippines!
Why do we allow two supermarket chains to dictate the price of food in this country? Let’s get some competition into Australia. The price we pay for food is one of the highest in the world! Wouldn’t cheaper food help the pensioners weekly costs?
One hour’s paid employment gets you off the unemployment list…………that’s a joke isn’t it? I think unemployed people should have to ‘sign on’ so they find it inconvenient to claim the dole. I don’t mind paying extra for their fares to get to the dole office. Perhaps they might go to bed early enough to keep down a job! It would also make it difficult for them to work and sign on at the same time.
I think the internet helped to make us a global economy, with people thinking outside the box, relocating factories, bringing in cheap labour etc. You can’t put the genie back in the bottle! Australia needs to educate the children so that they are able to compete on a world market. We have such high labour rates in this country that we need to invent IT products the world needs.
In spite of many years of taking advantage of cheap labour in third world countries, they are starting to prosper and their standard of living climbs. We simply can’t compete with them on the global market. Only when they have wages on a par with Australia will it be a level playing field.
There’s a touch of karma there!
Denise says
100% agree with you Eileen, well said!
Norm Black says
There is an issue here that Government seem to have no interest in, but, in my view where they should be looking first in order to sort out this mess. It is fine for Joe Hockey etc to tell us we need to work longer and raise the retirement age however Employers have to be brought into the equation. I wonder how many retirees really want to be retired and living on the Pension. Government intervention is probably a dangerous thing considering the mess they make of everything, however, there should be an incentive or directive for Employers (who hire over a certain number of people) for a percentage to be New Starters and a percentage to be Retirement age. Mr.Hockey why are you so naive Employers in the current workplace environment will not hire on Retirement Age Workers. I state my own experience, I was a Maintenance Supervisor in the Mining Industry until (due to a downturn and closure) I was retrenched May 2013. I have a very good work record am physically fit and at 67 don`t really want to be retired. Mr.Hockey find an Employer who will put me on as a Supervisor or Tradesman and I will quite happily work till I am seventy. I have applied without success for numerous jobs, most Companies these days don`t even have the courtesy to reply to an application if unsuccessful. Mr.Hockey if you are going to change the rules at least give us half a chance to play the game (I am not relying on the Pension but still feel very strongly on this issue).
Ingrid says
I am with you all the way. I have been basically unemployed since being retrenched in December 2012. Four other work friends my age or older were all put off then too and are in the same boat…..except they have working wives and don’t count in the stats. They gave the jobs to younger people on 457 visas, who can be exploited for less money and just say “yes sir” without contributing. I am a hugely qualified and experienced architect but can’t get a job as I am over 60. I can cut 15 years off my CV but I can’t pass for under 45 which seems to be the line in the sand. The state of the economy doesn’t help. I felt so blessed I had a good interesting well-paid job for so long; when many of my friends were unemployed. When I signed up to work women could retire at 55- now its 65 and rising…..but are ‘they’ going to overcome their age prejudice to give us paid work until then? Are ‘They’ prepared to waste a whole generation of experience? Or is it that the government just don’t want us to cash in our super so they can snag it for something else, and hope we die before we can spend it.
Linda says
The multitude of comments show the concern of many people , spanning all generations.
In fact , I would hope, that concerns by the older folks with regards to a reasonable retirement , and by the younger folks with regards to the difficulty of affording a reasonable future of good standard would encourage more debate / information / knowledge on a loud and regular bases in the media .
And perhaps demand that the crap-fodder stories about the likes of Schapelle Corby are banished to the paper shredder , where they belong .
It is quite clear , that apart from suspect / manipulated figures by any given Government , and to suit their own , short-term goals , the media plays a big part in keeping people ill-informed , and therefore in ignorant bliss.
To get real news , anybody with a mother tongue other than English , as I do , will switch to other news channels , and get a much better informed picture.
As mentioned by previous writers, nothing will change , if people do not seek out knowledge , facts and motives .
The ‘she’ll be right” attitude is one that is to the detriment of the people of this beautiful country .
You must learn and be informed. Whether Corby wants to eat crab , or not , is really an insult to what needs to be discussed, or who had butt-implants, or who bonked whom, or who checked crying into some rehab facility. Argh , please give us all a break !
What concerns me is , whether, in fact , my privately educated / university graduated children ( at great expense and sacrifice) will have a future in their given choices and fields. Whether they , and I , have wasted our time for non-existent jobs/careers. Whether they’ll be able to get onto the property ladder ? Whether I’ll be able to afford decent health care in my dotage ?
The list goes on and on ! We all , in our quiet way, need to implement changes.
I’ll give you one of mine, which has to do with the absolute control/ pricing of food supplies to the general public.
You know the ones – that screw the farmers and the customers all at the same time ??
And tell me on tv – they LUURVE ME !! Argh ! Please – don’t love me !! – ( You mean my cash , anyway !! )
Upon returning from Christmas Holidays fridge was devoid of fruit and vegetables.
Shop at one of the 2 . tomatoes $8.00 kg , apples $6.00 , leb cucs $4.00 grapes $ 8.00 and so on . I really fancied a peach , or 2 , picked up a couple , went to the check-out , looked at the total , incl of $ 2.00 for the 2 peaches , and spat the dummy !!
I asked the cashier to remove all fruit and vege, told him politely to let his managers / board know one comment : RIDICULOUS !! and left .
Next day : Local , but not well-known Sunday Market : Go about 2 hrs before close : Tomatoes $ 1.50 kg , apples $ 1.50 , leb cucs $1.00 , grapes $1.00, peaches $2.00 ( all per kg) and could barely carry it all . I spent $ 15.00 for 2 weeks fruit and vege, and had some to give away to the kids.
Please vote with your feet . Complacency and laziness does not serve you , but the extraordinary profits for mentioned suppliers and their boards greed .
I may add , that I have nothing against the principle of business and profits, and have earned my living in such a fashion for over 40 years.
But it is the control of competition , which is ruthless, the destruction of anything / anybody that does not comply. Farmers being some , others are emerging, smaller food suppliers, the customers .
So you want change – change your habits with your consumer – dollar ! Of course , this is not possible in all sections , you will find it hard to bargain/ deal with rents / property prices / energy / fuel prices etc.
But wherever you can – do !! Many places , and situations , vote with your spending habits
That is INSTANT . No election needed !
But above all – more discussions like this – good start ! Libraries ( I know – old fashioned, old-fart, whatever !!) still free ! Seek out other forums , that impart knowledge .
Coming back to issue on hand – we will be expected to work longer , pay more taxes , face cuts in health care, age-provisions , and what ever age you are , tighten your belts, find ways to invest early and wisely , and most of all , be self -reliant. And teach your kids to be .There won’t be an awful lot of pennies around to look after us all ! That scenario covers not only Australia , but most other developed places as well. !
Happy learning ! Happy debating !
Tu says
it may be a good thing to let us work longer,it gives us that opportunity to have of job availability for an age that people are normally shun on ,sometimes some people are just not ready to retire and they prefer to work longer because the economy is so high in standards a pension paid by the gov would hardly potrude the surface wherears a full paid wage can, help tremendously,would you like to retire broke and unhappy or work to survive some or a lot of people may have this opportunity to do this and may be lucky but some may have not got enough super to do so or even that opportunity to get ahead,and also by working longer for some may also have health benefits and physiological benefit the fact of information on our health now the new tech and medication on how to stay alive longer is readily available to us now than ever before,i believe that our bodies are a well made machine,mind and body must be well maintain for longer lasting I am a 52 years old who is holding two jobs in order to get ahead I have leant to maintain myself through gym and martial art classes,and working physical hard jobs really hard to keep in shape through out my years I have work out a system,that works for me,i dont feel my age feel 30 years young can work for quite along time if needs be,maybe there are others out there.my philosophy is that you will get more done if you are working than if you are not working.
Kathy says
Really good to see some well informed, well thought out and absolutely correct comments here.
I don’t want to point the finger at any one generation, but the demographic blip that was the baby boomers and made for unprecedented boom times have raised expectations for everybody that simply can’t be sustained. It created a cradle to grave welfare system and boosted asset prices, which everybody assumed was the norm. It was not, and we are now reverting back to the mean.
When Otto von Bismarck of the united Germany created the first universal pension and made the age it could be claimed at 65 or 70 (depending on what references you read), the average life expectancy was in the mid 40’s. When Australia and the UK introduced a universal pension scheme in the early 1900’s and made the claimable age 65, life expectancies then were still in the late 40’s. When the US introduced a universal pension age in the 1930’s and also made the claimable age 65, life expectancies were still only in the mid 50’s. The idea of a pension was that at best it would be paid for a few years, not for 20 plus years. The pension was not prepared for the medical advances made post war and our increased life expectancies.
We also have much more welfare than just a pension, with a mind boggling array of welfare available on tap with the disability payment just the latest in a long line, not to mention our “free” hospital and “free” education and free other boondoggles, not to further mention unbelievably generous payments, allowances, perks and lurks for politicians (we currently have an astonishing SEVEN former prime ministers!!!), bureaucrats, public servants ALL of which are paid for by private enterprise, a shrinking pool of real productive, useful, wealth creating overtaxed, overburdened bunch of sods. Our first port of call should be to completely abolish state governments in the first instance.
And then look at asset prices. Stocks have risen on the back of good times, and Australian housing has been pretty much in a government supported bubble for the last 40 years. In a properly functioning (ie. no interference from governments and central banks) economy, housing prices rise in line with inflation. I have a wonderful graph that illustrates this beautifully, showing that when adjusted for inflation from 1880 until 2010 housing prices pretty much stayed flat with small, minor blips until about 1970 where it took off, and really went parabolic in 1980. So much for them always doubling every 7 to 10 years. 30-40 years is not always. At the end of the day housing is a consumable item, not an investment item, it’s where you park your wealth, not use it to become wealthy. We will not become a wealthy nation simply by selling houses to each other.
If you want to see our and most of the developed world’s future, look at Japan, which is now entering it’s 24th or so year of the lost “decade” as their baby boom period peaked just over 20 years ago. Their stock market and housing prices have never recovered since the highs of the 90’s. Anybody who uses that tired argument that housing will always go up here because of population pressures just needs to look at Tokyo with a population higher than the total Australian population. Have their house prices increased over the last 20+ years? Nope.
We are heading for major asset deflation, and however much our politicians and central banks increasingly desperately try to stop this with various quantitative easing methods, they will ultimately fail.
Australia is in a slightly better position than most as we have a fairly large demographic that came after the baby boomers, and our population is increasing, but this is not due to an increasing birth rate, which has dropped below the 2 required to replace a mother and father again, but through immigration, which brings problems of its own. And the question will be whether the next generations of X, Y, next and future generations will be happy to be for today’s consumption with tomorrow’s money.
What it all boils down to is everybody taking responsibility, and governments need to lead by example by making the hard decisions that will have further reaching effects than just the next 3 years that they expect to be in power. Start by reducing their extremely generous private taxpayer funded conditions. People need to plan for their own retirement and not expect the government to look after them. And this includes looking after their own health as health spending is also expected to grow enormously. People cannot expect to drink, smoke, eat crap and not exercise and then be surprised when they become sick and expect taxpayers to pay for their health care.
And China will not save us, like they did during the GFC (which is by no means ended, merely postponed). They have their own housing bubble bust, economic slowdown and demographic crisis to worry about. Their one child policy has drastically cut the upcoming generations, as they are effectively halving their population. For a welfare system to work, it stands to reason that the next generation is bigger in order to pay the taxes required to support the previous generation.
In short, educate yourself. The days of a job for life, or job security are well and truly over. Going to school, getting good grades and finding a “safe” job is last millennium’s way of thinking and no longer applies in our global economy.
Glenn says
well Kathy, I hope you are never genuinely injured when working- your diatribe about the disability pension shows you have never experienced serious injury,and needed, and been very greatful for the safety net- I have. To lose your health, career, dignity, goals, dreams and spend the remainder of your life on the junk heap and dependant on others is one of the most soul destroying things that can happen, often in an instant- and through no fault of your own- and then when your employer and insurance companies move heaven an earth to (try) avoid paying out a paltry sum that can NEVER replace what you have lost – health and independence… after that, and only then, can you comment about the disability benefit knowledgeably…. I do concede there are many bums and rougues rorting the system, but there are also others (like myself) that are truly greatful for the social security system that this country has. I have travelled extensively, and can honestly say, I know I am lucky to be in Australia, even after all that I have experienced.
Ken says
Kathy, you are not in Germany now or anywhere else for that matter. You need to find out why the Baby Boomers are called that. Most of us are the children of the Soldiers who kept people like you and I, from speaking German, Japanese and Italian, and maybe anything else, other than English and Russian. Best to keep quiet and learn your history then criticize. Most of us, if not all of us are bloody proud to be Baby Boomers. If my father got 50 cents a day to shoot your relations, good on him. Cheers, Ken.
peter says
Wow such comment , much interest, so controversy. Super annuation is a joke. Its either or. Cant be both the way the laws are right now. People put as much into their super before retirement. Get taxed less. Then before they retire they buy the expensive mercedes. They buy their kids one also. They go around the world and send all our money overseas on extravagant holidays. They buy the waterfront house or penthouse and apply for the pension. Live a modest few last years and the rest of the money has gone to the dogs. Im sure some have a nice cash stash one way or another on the side. Till the gvmnt decides to fix this nothing will change.
Ingrid says
Lets see if that what you do when your time comes and you lose your job at 60, can’t get a job, still have a mortgage and wonder how the small amount of money in your super will last for another 30 years….unless euthanasia becomes compulsory! Dream on Babe!
Christine says
As a baby boomer in my 60’s and still working, I think the younger generation will be better off than us as we did not have compulsory super till the last decade. We were brought up to think the government would look after us, now we are panicking as we comtemplate living for maybe another possibly 30 or 40 years in poverty if we haven’t made the right investment choices. Also our kids will have a better inheritance as families now are much smaller than in years gone by. Finances should be taught in school instead of a lot of the useless rubbish we were taught.
Eileen says
Kathy, you said:
I have a wonderful graph that illustrates this beautifully, showing that when adjusted for inflation from1880 until 2010 housing prices.
Any way to display that here please?
Thanks!
Ari says
All that talk of lifting retirement age is a load of rubbish, unless Government and employers address age discrimination in employment, effectively.
Ken says
All that talk about people dying of old age at 40 or 50 is crap. Just look at the Jap prisoners of war, they survived till their 80s and 90s. Sounds like you are trying to get on the good side of Hockey and raise the pension age. People never got breast or prostate cancer at 12 or 16 either, it was an old person’s disease. I recon we are dying younger. The only thing helping us live longer now is medical knowledge.
Anton says
If we look at human society throughout history it has been structured in the shape of a pyramid. The Pyramid is a very stable structure unless it is inverted so that the pointy end is at the bottom. However, that has never occurred in human society because the few at the top have always ensured that their needs have always outweighed the needs of the many at the bottom. Financial freedom is thus an illusion because those few at the top of the human pyramid believe that must be able to exploit the efforts of the many at the bottom of the pyramid. Financial Freedom is thus based on the notion of the exploitation of the many toilers by the few thinkers. It is not possible to have a world full of entrepreneurs. Who would deliver their products and services to the many at the bottom of the pyramid on which thinkers rely for their financial freedom. The ageing of the population has been caused by the medical pioneers who have been obsessed with the “need” to improve everyone’s quality of life. This has created the problems we are now beginning to experience. And since governments are in parliament for short term gain they have avoided the key issue. The taxing of income rather than land and assets over the past 200 years has enabled the few at the top of the pyramid to avoid their obligation to society. Increasing the pension age is a band aid solution. What is in fact required is a long overdue generational change of the tax system and the replacement of corporations by worker collectives. Only when capitalism in its present form is swept away by such changes will there be financial security for all rather than financial freedom for the few.
A. Aylward says
Unemployment levels averaged at 6% hide that fact that YOUTH unemployment is way much higher. Let the older people retire and the younger unemployed ones take up their jobs. With a shrinking work-force there really is NO excuse for any unemployment — get every youngster started on a career and then we will have a much bigger contributing base to care for the elderly.
Michelle Joseph says
I’m a Gen X feel a bit rippped off by the Baby Boomers. Example, in New Zealand, they had all their university education paid for by the government. Then when it came their turn to pay for Gen X, didn’t happen! Gen X ends up with a big student loan. Being such a large political force, Govt policy has always favoured their interests. Baby Boomers have spent all their money on themselves and now they want Gen X & Y to pay for their retirement?!?! Give me a break
Eileen says
I was born in the UK so I don’t know what times were like here in Australia prior to 1976. My husband lived in Australia since he was 18 months old. He went to university in Sydney. He worked many part time jobs to pay for his education, (he’s a baby boomer also). His taxes helped pay for aged pensions whilst most of the wages paid for his studies. He’s reaching retirement age in 2 years and the government are trying to postpone his pension so he will a very old man before he qualifies to receive it.
I don’t know your circumstances Michelle, but we have a daughter (24yrs) who has interests in three properties. She bought the first (at 20yrs) with a guarantee from her parents, (since we knew she could be trusted to repay the loan). She didn’t have a deposit, nor did she receive any money from us, just our good name. She refinanced at 22yrs when she bought into another property. We are no longer guarantors and she was able to do all this because she has a secure job. She’s disappointed that she can’t afford to move out of our home, (yes, she does pay rent) but she is getting there.
Life isn’t fair Michelle, stop feeling sorry for yourself and get out there and make it happen! You’re older than gen Y…….Many BB’s haven’t squandered all their money. It’s true, some have ……..and on gen X and Y too! That’s their choice. BB’s are the generation that didn’t always have super paid by their employers, you do!
We anticipate there will be NO pension for us when we eventually qualify, (under the means test). Don’t count on getting anything, that way you won’t be disappointed!
Ken says
Michelle, Where do you get your info from. It must be from your own head. Typical of all knowall young brats. The only things you will ever know is what you all ready have told your self. Wake up to your self and grow up.
Caroline says
I can’t tell whether you being sincere or winding people up but you seem very immature. Most Baby Boomers I know have worked hard to give their children (the various gens) more in life than what they had when they were growing up. It doesn’t seem like you appreciate your parents.
Mel says
That’s a classic photo of Joe Hockey, Jon – it really sums up the drama of this matter! 😉
There is a lot of food-for-thought & some good ideas contained within everyone’s comments (this would be one of the longest comment threads I’ve read in these newsletters.) I’m a Gen X’er & have NO doubt there will be no pension in future, so I’m all about setting myself up for the future & also ensuring my extended family are not going to suffer a poverty-based retirement. The over-arching problem I have with any government’s agenda regarding the “pension”, is the fact our pollies, especially Hockey, seem soooooo concerned about “ending entitlement mentality”, while holding their fat mitts out for their tax-payer-funded “entitlements”! Hide of the Rhino, Joe & Co….
Our “pension” was certainly established as somewhat of a safety-net three to four generations ago, at a time when many people did not live long enough to see, qualify, or make use of it. Work hard & die young – don’t burden your country, so sayeth Joe between-the-lines!..
Now the pension is seen by many (primarily our well-fed pollies) as a drain on the public purse – just like health/Medicare/PBS, aged care, education, environmental issues & anything else that costs money to run in this country. Which would be, ummmm, EVERYTHING!?…
For all of those latter items, the current governMental solution, state & federally, seems to be privatising/selling off EVERYTHING, so that the govt can say they’ve cleared the books of all this nasty debt & we can happily move forward into an Australia of “Sunshine & Lollipops” (cue The Simpson’s soundbite 😀 ) All with the promise of “better days ahead”, despite massive job losses, inevitable foreign ownership take overs & an inability to care for those who worked & paid taxes here to help build this “lucky” country!
For those saying we need to change our political & taxation structures to move ahead – absolutely agreed!! The top-heavy, bloated, superannuation favouritism, “jobs for the boys”, lobbying/consultant systems that we now see as “the norm” in our govenrnment, are where the REAL drain on the public purse starts… And to my way of thinking, this issue should then resolve itself with the fact that in the future, we should NOT have “democratic” elections of the kind we are used to : who needs to vote in fat-cat “government”, with their own entitlement-agenda, when Private Corporations are running the country & deciding on the fate of it’s residents, social needs, business interests & physical infrastructure?…
How about we start reforming politicians wage structures first, so that it is purely performance based? If you do a shit job Joe (& you’re right on track there, dude) YOU don’t get paid. We would soon have a country of pollies living on pension rates if that were the criteria set!.. 😀
Failing that, we might actually see the cream of the crop rise to the top, for those that DO give a crap about Australia’s future, instead of career politicians clogging the system like a festering, blocked up drain-pipe, thinking of only their next three-year stint….
And about that $94MILLION a week being spent to “stop the boats” – could that POSSIBLY be better spent on ANYTHING else, like a pension, or healthcare, or aged care, or education???….
Sorry Joe – you have earned my middle-finger-salute!.. If you want the plebs to work til they drop, best take a look at you & yours’ (lack of) performance first, before deciding WHO is not worth a few hundred bucks of pension after working themselves into the ground til they’re 70+….
Eileen says
Mel, are you saying you wouldn’t mind if you were having dinner one evening and half a dozen people walked in and sat down to eat? Then they went into the bedroom and laid down to sleep and you’d have no problem with that? $94m will seem like a ‘drop in the ocean’ compared to all the illegal boat arrivals in the recent past. we will be paying forever for all the children and grandchildren of these people.
Every boat that carries economic refugees puts a drain on this country. I am a swinging voter, so don’t think I’m talking politics here. I don’t like the idea of people arriving on our shores, (and I’m speaking as a migrant myself) and deciding they want to stay. I haven’t heard of too many asylum seekers who flee their country with $10,000 and their documents, only to lose the money and documents when they board a boat to come to Australia.
I’d like to see how many ‘boat people’ end up claiming the dole (and everything else they can) while hard working Australians can’t afford to have the large families and leisure time they enjoy. Before you call me racist let me say I have no problem with anyone who is here legally who works, I do have a problem if you’re here to claim benefits.
When I lived in the UK I used to pay National Insurance Contributions (compulsory) and you couldn’t claim unemployment benefits unless you had paid a sufficient amount. The system was there to help you out after you had paid your dues. Nowadays as long as you can get to Australia………….. it’s a free for all!
I agree with you about the pollies wages, but let’s face it…..Mark Latham was the ONLY politician who actually reduced their super benefits, (for new pollies) in all the years I’ve lived here, so don’t hold your breath!
I think there needs to be such a ground swell of voters complaining about ‘pollies perks’ that they get nervous, (the Queen ended up paying taxes after the people revolted). We need pollies to wait until THEY retire, to touch their super benefits too! After looking at a few YouTube programs made in the UK, things are going to get really, really tough here too!
We ain’t seen nothing yet!
Mel says
Funnily enough Eileen, the amount of illegal arrivals here is actually the “drop in the ocean”! This wasn’t designed to be a post around boaties, but it is relevant to the debate in an economic sense.
We take far less of “our share” of refugees worldwide (regardless of their circumstances) than almost any other developed nation. For the media hype that has been created in recent years, it really is a whole lot of nothing, but it sounds BIG & dramatic.
Until the recent media blackouts to try & shelve the topic, there was nothing the media liked more than to point out how we were being invaded by illegals. Now Mr Morrison basically says “there’s nothing to see here anymore folks – we’ve won, trust us…”
I personally have a far greater aversion to having my government lying to me about how it can’t afford to support it’s own tax-paying (or previously tax-paying) citizens, while throwing our money at a problem that will NEVER stop, in a desperate bid to “look tough” on border security – keeping a few thousand desperates offshore! Then having the gall to try & cover it up or play it down, while telling Australians to tighten their belts. No more pensions, Medicare, or penalty rates for you, slackers – Aussies cost too much to upkeep in this country, but we will splurge on keeping some foreigners out!
I would also be interested in knowing how much is spent on the dole for “approved” refugees, but clearly it’s not news-worthy enough to make headlines, so I’m betting it’s less than $94M a week…
For years there have been opportunities for successive governments here to tackle the people smuggling rackets head-on, if they were actually serious. Primarily by setting up processing centres within Indonesia & other hotspots, to help cut out the middle-men, but these strategies have been ignored by our same governments in favour of keeping this political football in play… Neither side wants to blink first, even though more practical solutions are staring them in the face.
Whatever people think of the “refo’s” coming here, they are obviously desperate enough to seek a new life & I personally think most of them would have to have balls of steel to get on a leaky boat, thinking everything will be fine & dandy on the other side!.. Who knows – in another life, if you or I were that desperate, maybe we would make the same choice & run for someone else’s shore?…
As you say, many are economic refugees, who have had enough money to get to the smugglers & make the final journey. Many of them also, were skilled workers in their respective countries & could be assessed as such for regular migration criteria, if our govt’s here did give a damn about processing people instead of punishing them for political points scoring purposes. Many others again have had some horrendous experiences & felt the need to escape their previous lives.
I’ve heard every redneck retort under the sun about queue jumpers, terrorists, sink the boats, etc. But practical solutions for sorting these people out & bringing them in to work just like any other skilled migrant, (increasing Australia’s tax base as is often preached about) instead of leaving them to rot in detention centres, have been ignored. In the game of rich vs poor, the poor can rot in hell. We all know money makes the world go around – as one of Jon’s recent articles said – if you have millions of dollars, you can stroll into Australian residency & visa requirements, no questions asked. So questionable characters flying in with money are cool, but questionable boat arrivals get the room with the razor-wire view. I’d happily wager $94M of tax payer funded dosh, that the refugees who make it here with their lives in tact, will get a job & they’ll pay their way, probably working a lot harder than many of the born-&-breds here that I’ve met!… 😉
Eileen says
Mel, as far as Australia’s intake of refugees are concerned, last time I looked we were SECOND only to Canada! I’d say we were ‘punching above our weight’ in that respect!
The English are famous for queuing, so naturally if you tell me the few boat people arriving here unannounced are a drop in the ocean, I say well let’s swap them for the people rotting in the Indonesian camps where refugees are legally trying to migrant.
If you insist on maintaining our intake of migrants, I would ask what percentage of them actually work when they get here. I would analyse which countries the non workers came from and stop all intakes from those countries.Anyone who thinks that sounds harsh, open up your wallet!
I have always felt that an employer who does well can be more generous with his employees. If Australia is travelling well, then there will be less hardship for it’s people. I have no wish to derail this discussion either but when we talk about wealth, it’s important to acknowledge that any drain on the public purse is a drain on it’s taxpayers.
Oh Mel, one you forgot to mention is bleeding hearts!
Mel says
Hehe – I could get my tiny violin out & start playing, but I will simply say, at least my bleeding heart hasn’t forgotten it’s humanity, Eileen. And if the English are famous for queuing, there is another thing I do remember that my Pommie ancestors & mates are famous for – it’s called whinging! 😀
As far as maintaining migration goes, the govt already sets strict criteria, primarily on what a migrant will add to the economy – that is, being a skilled worker. As a general rule, those people have applied to come here to work, for a better life & have been accepted. By your comments, you were one of those people?
Back to the boaties who have NOT applied, but are coming anyway : at the moment we are all opening our wallets (& also those of our grandchildren) to foot the current bill plus interest, for the BORROWED $94M p/w to keep these people out of the country. (This is one of the reasons Joe H wanted to raise the debt ceiling to infinity & beyond, the week after the election.) So, if we apparently don’t have money to run Australia as it stands for the good of it’s residents, WTF are we doing borrowing more heavily, just to prove a point about which government can be the bigger bastards to a load of refugees?..
My bleeding heart still has a practical, if not mercenary side to it! It would be cheaper & more productive to Australia’s future wealth to scotch the big-spend idea now & process asylum seekers into being productive members of society here. Let alone showing that NOT all Australians are the bunch of pricks that our successive governments are trying SO hard to turn us into!
I wonder why I see such a “lack of/not enough” scarcity-mindset in many of the comments spread across Jon’s blogs – including yours, Eileen? Without getting all “The Secret” airy-fairy : are we not able to create abundance & share the “more than enough” philosophy, in physical form? Isn’t that part of the reason for our personal creation of wealth, which also relates to the entire economy of a country – fair funding for it’s taxpayer citizens, pensioners (which is what this discussion WAS actually all about!) & even allowing for those less fortunate from other lands?..
That is how it should work IF our elite ruling class were also doing the right job for the country, instead of selling it off & flushing our collective futures, in the name of short-term profits for just themselves & their friends! Or are we in the “lucky” country meant to hoard what we have & deny others a chance to learn, work, live & “share the love/wealth” – just because they lost the “birth lottery” & then bought a ticket on a leaky boat, to try & win a new life?
If you, Eileen, can get our government to open up & actually be honest about who/what/where these people have come here from, would be a start to answering your questions. Will migrants & refugees potentially derail our economy by not working? Or would they be willing to take up many of the jobs that Aussies don’t want? Only if people are given a chance, will anyone ever know! So let me know if YOU can find the stats to answer your own questions – even a quick Google search can open up a world of opportunity!…
To get you started, here’s some recent figures on Australia’s refugee intake – which was ranked 49th in the world, NOT 2nd to Canada, in 2013 – http://www.smh.com.au/federal-politics/political-news/refugee-figures-a-reality-check-for-australia-20130619-2ohpa.html (the .pdf stats are available for full perusal by searching “Australian refugee intake statistics 2013”) This was just one short review of where we stand today.
As a nation built on the backs of convicts, boat people & migrants ourselves, it is a pretty piss-poor standing! Barely giving a damn about others in this big Monopoly game, beyond the agreed-value per person of a debt-based-fractional-reserve-dollar. Just like the bulk of the developed world, where we somehow easily justify the “not enough” mentality, while having it all. Developing nations still shoulder the greatest burden, while our “bugger you Jack, I’m alright” Aussie philosophy carries us through the day, guilt free & nary a bleeding heart in sight! 😉
AngryAussie says
This blog has been epic and very interesting to read, so many good points made and thoughts aired. This is why its important we do this, in my book anyway.
Can I ask everyone who contributed here to visit my site http://www.angryaussie.com.au and create your login. Feel free to cut and paste your remarks from here if need be. But PLEASE continue talking about this stuff.
Australia needs a wake up call, for our kids sake, in my case include my grand children.
Looking forward to talking to you all more
Eileen says
Mel, from what you have said I have gleaned this much……..
You are in favour of economic refugees breaking Australian laws. This is in spite of not knowing whether they have a history of violence, disease or if they’ve ever worked or not, (you’re not the only person who can put words in people’s mouths). You seem content to let the type of refugees I’d like to see migrate rot in Indonesian camps, to accommodate the queue jumpers who wreck our facilities and cost us millions of dollars repairing the damage. You say we have no money, yet you’re willing to take ‘all comers’! Well let’s swap the last arrivals with the same amount of people in Indonesia and let’s see if there’s a queue!
I may have been born in England but I don’t have a drop of English blood in me, (not a whinging pom). It appears that if my opinion differs to yours, I am a redneck!
Call me old fashioned but what I advocate is maintaining the law, controlling our borders and paying our way. You appear to support people drowning on the high seas and anarchy! Your humanity has cost over 1,100 lives so far. That’s just the people we know about drowning at sea. How many more don’t we know about? The road to hell is paved with good intentions! You must be so disappointed that the number of boat arrivals are declining.
Just how many people are ‘too many’ in your opinion? As far as I’m concerned ANYBODY who wasn’t born in Australia missed out in the ‘birth lottery’ ticket, so by your definition the whole WORLD should jump into boats and start paddling! You don’t have a monopoly on compassion. I believe we should help people IN THEIR countries, not simply transfer their problems.
It always concerns me that the government is living beyond its means. This is a great argument for stopping all migration. I’m sick of people saying we need migration to give us a greater buying capacity, to pay into the social security pool, taxes etc. Most of us at some stage of our lives will need help with hospitals, pensions and various other schemes the country has on offer, migrants often need more help.
The government’s strict criteria for migration is if you have enough money to buy your way into Australia, you can stay. I’ve heard stories of money laundering going on here too. Homes being bought and then sold shortly afterwards…… for less…….all overseas buyers. I wouldn’t allow any purchases of farms to Chinese interests (leases only) as it’s usually the Chinese government behind them.
If the UK is anything to go by, the Australian government will be drastically curtailing disabilty pensions, social security payments and child endowment payments. There will be lots of things for you to complain about in the future!
Many, many people agree with me. You can say what you like Mel, this is my last post on the subject, so hit me with your best shot!
Len Edwards says
Jon, cynical I am but the “Inquiry” into foreign investment is just another froth & bubble from the government. A smoke screen until it all dies down & goes away. On the day he was elected Prime minister, Tony Abbot was on television saying he welcomed foreign investment, or words to that effect.
Instead of making the “workers” of Australia work longer, because we are not generating enough income to sustain our pension fund, maybe the legislation should be changed regarding retirement entitlements for MP’s. I would hate to think how much it costs us, the taxpayers, per annum, especially when we have no say in the matter. After paying taxes for 40 odd years, I didn’t qualify for the pension because my wife was still working full time & I had one investment property. Consequently, at 68 I am back working full time. Where’s the level playing field?