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OK Boomer: fessing up that we’ve had it good

The newly-minted ‘OK Boomer’ movement is increasing attention on generational inequity. The New York Times of 29 October 2019 carried this heading:

‘OK Boomer’ is used by Gen X, Gen Y (Millennials) and now Gen Z (the newest generation) when a Baby Boomer says something dismissive, especially referencing the good old days. The younger person cannot be bothered explaining the ignorance of the older generation, and simply responds with ‘OK Boomer’. It’s pejorative, a put down. It has already been used in the New Zealand Parliament by a 25-year-old politician to stop heckling during a climate change debate.

Financial equality between generations is an emotive issue with legitimate arguments on both sides. Older Australians want to hang on to the outcome of their hard work, as they have legitimately planned for retirement based on a set of prevailing rules. Younger people see the Boomers enjoying property market, superannuation and investment conditions unlikely to be repeated. Already, the 27% of Australians who are over 50 hold half the wealth, and ASIC estimates 65% of the almost $3 trillion in super is held by fund members over 50.

Confining this article to financial matters, we will focus on:

  1. Superannuation contributions
  2. Residential property prices and the family home
  3. Equity and bond markets
  4. Cost of education
  5. Death duties
  6. Demographic change

It avoids the big social issues such as climate change, global political unrest, #metoo, over population or trade wars. Rather, let’s see how Boomers’ conditions have allowed them to build financial independence in retirement.

Now it’s ‘When I’m 84’

In 2014, Alex Denham, then a financial adviser, wrote an excellent article called ‘Hey, what have you got against late 60s babies?’ Born in 1969, she feels her generation missed out on many of the advantages that set up older (and in some cases, younger) generations:

“I’m getting a niggling feeling that someone out there has it in for us late 60s babies. We just seem to keep getting hit by changing government policy, and not in a good way. Too old for this, too young for that.”

At the time of publication, I recognised that many of the benefits had gone to Boomers. Born between 1946 and 1964, Boomers are now aged 55 to 73. I was born in 1957, the same year two lads named Paul McCartney and John Lennon first met, down the road from my birthplace. ‘When I’m 64’ is suddenly only two years away for me. I recently attended an amazing McCartney concert where he performed without a break for three hours in a spectacular collection of classics. He was born in 1942 and is now 77 years-of-age. Next time … ‘When I’m 84’.

1. Superannuation contributions

Super schemes existed for many employees before the introduction of the Superannuation Guarantee (SG) in 1992. By 1974, an estimated 58% of the public sector and 24% of the private sector had some form of super. However, SG was a massive step forward for widespread inclusiveness when it started at 3% in 1992 under the Keating Labor Government. The compulsory contributions gradually reached 9% by 2002/2003, and the current level of 9.5% was set in 2014/2015.

A Boomer born in 1964 may not have received compulsory super until the age of 28, and would have been 38 by the time the 9% level was reached. It could be argued they have not received the full impact of the super system.

This disguises the limits and the generous ability to put more into super which operated for much of their working life. The limits have been reduced significantly for the following generations. The current maximum annual concessional contribution, the most tax-advantaged way to put money into super, is only $25,000. At various times in the past, this has been as high as $100,000 a year, and was $35,000 for people 49+ as recently as 2017.

The biggest opportunity to put large amounts into super comes from non-concessional limits, the amount from after-tax savings. The current non-concessional cap is $100,000 a year, but for three years until FY2017, it was $180,000 a year, and $150,000 a year for many years before that.

One reason many wealthy people have so much in super is Treasurer Peter Costello allowed $1 million in non-concessional contributions for a period of 14 months until 30 June 2007. Although there was no limit on after-tax contributions before 2007, pensions were taxed so the environment was not as attractive.

What made money in super so appealing was that in December 2006, Costello introduced a Bill to allow people aged over 60 to access their super tax-free. Not only are the earnings on assets in pension phase free of tax, but withdrawals (following a ‘Condition of Release’ until the age of 65) are also tax free, whether as a lump sum or pension.

This explains why the then Treasurer, Scott Morrison, in the 2016 Federal Budget capped the amount that can be transferred to the pension phase to $1.6 million. Anyone with a total superannuation balance greater than or equal to the transfer balance cap now has a non-concessional limit of zero. Super above $1.6 million must be held in accumulation with a tax rate of 15% on income earned (or 10% for capital gains), still highly advantaged versus the personal tax system.

The tighter caps make it far more difficult to establish large superannuation balances, especially via the concessional limits. The $100,000 years were massively advantageous for high-income earners. In 2016, when the Commissioner of Taxation, Chris Jordan, explained why 2,184 people had over $10 million in super (and six with over $100 million), he said the balances had been accumulated over 30 years or more. That’s what high limits, good investing and compounding can achieve.

The rules around a ‘Condition of Release’ are surprisingly flexible. A person over the age of 60 does not even need to retire, they simply need to resign from a company. They can start work again the next day while also setting up a pension. Although the limits were tightened, a couple can still move $3.2 million into the tax-free phase.

While there is a requirement to take out the legislated minimum of 4%, anyone with other resources will leave the rest untouched because saving in super is subject to such low tax rates.

Let’s face it, if a couple with a large super balance pays no tax on $3.2 million of assets and only 10% to 15% tax on the rest, then Australia is not collecting taxes from many people who can afford them (acknowledging that tax was paid before the money went into super). Even if they earn only 5% on $3.2 million, that’s $160,000 of tax-free income which might otherwise incur personal tax at 45% plus a Medicare Levy of 2%. That's over $75,000 a year which can finance a decent Mercedes or a couple of amazing trips to Europe a year. Seven hundred Australians retire every day.

2. Property prices and the family home

The first property I bought in Sydney in 1980 cost $56,000, for a three-bedroom terrace. It’s now near a train station and would be worth maybe $1.5 million. Adjusting $56,000 in 1980 to current day dollars (using the RBA’s inflation calculator) gives $241,000. The real cost is up by 330% over 38 years, but that’s only 3.9% a year for inflation.

The second house, this time free-standing on the Lower North Shore, cost $104,000 in 1983. Let’s guess it is now worth $2.5 million. Current day dollars for the $104,000 is $333,000, a change of 220% at an average inflation of 3.4%.

These examples are typical, give or take, of millions of people who entered the property market 20 to 30 years ago. The following chart shows real property prices for Australia since 1970, adjusted for inflation. The index is set at 100 in 2010, and this is not the most expensive markets of Sydney and Melbourne.

It shows how far ahead of inflation, and similarly wages, house prices have risen, although it’s not a straight line. The index rose from 1970 until 1975 and then held its real levels for the next dozen years, with a strong kick up before the ‘recession we had to have’ in 1991. Many houses purchased in 1990 were worth less five years later. And yes, interest rates in the late 1980s were much higher, with the variable rate at around 13.5% for most borrowers. But anyone owning a house for the last 25 years has materially benefitted.

Australian Real Residential Property Price Index from March 1970 to March 2019

With this increase in wealth, consider what owning a family home gives under our current system:

  1. Tax-free capital gains. I asked a fund manager many years ago where he invested his own money. He said that while he held his liquid assets mainly in his own fund, the best investment for tax-free capital growth was Sydney houses on large blocks of land in great suburbs. And in his case, it needed to come with its own tennis court.
  2. Exemption from social security assets tests. Even for most people who have not accumulated much wealth outside the family home, but spent their life paying off their mortgage, they are now sitting on a substantial asset in retirement. A couple can receive a full age pension with other benefits such as cheap medical prescriptions if their assets outside the home are less than $394,500, and part pension up to a healthy $863,500. They can top up their cash flow through the Pension Loans Scheme up to 150% of a qualifying pension (the maximum age pension for a couple is $36,582 a year, plus pension and energy supplements). There are many reverse mortgage schemes which also give access to lump sums if needed.

For all the attention we rightly pay to superannuation, it is the ownership of a home, exempt from assets tests but giving access to cash flow through a reverse mortgage, which offers the greatest financial security and independence in retirement. Due to property inflation, newer generations are finding it far more difficult to reach this milestone, increasing the uncertainty of their futures.

3. Equity and bond markets

To avoid doubling the length of this article, let’s consider a few data points which show how favourable investment conditions have been over the last 30 years, even including the GFC.

The 2019 Vanguard Index Chart gives financial year returns for major asset classes, with the averages since 1990 of:

  • Australian shares, 10.0%
  • US shares (unhedged), 11.8%
  • Australian bonds, 8.3%
  • Australian listed property, 10.6%

Investors should be delighted if these returns are repeated in the next 30 years. Even a balanced portfolio with conservative allocations to bonds and cash has delivered close to 10%. With bond rates now at 1% and markets fully-priced, if anyone offered you these returns, bank them before they blink.

4. Free education

In 1974, Gough Whitlam abolished fees for university and tertiary education became free until the introduction of HECS in 1989. I went to university for four years from 1976 to 1979, with every year free. Now it is common for students to acquire $100,000 or more of HECS debt. I also benefitted from a Commonwealth Bank bursary that paid full salary while studying, but the Bank no longer offers such funding.

5. Death duties and super for estate planning

It is claimed that no other developed nation has policies that both exempt the family home from any form of taxation or social security test, plus imposes no death duties. It’s also argued this places the tax burden on income which is unfair to younger generations, encourages a brain drain to lower-taxed countries and reduces the turnover of property.

Australia does have a form of death duty. Non-dependant children who inherit a superannuation lump sum will pay 15% tax plus 2% Medicare Levy on the taxable component of the balance. The best way to avoid this tax is to transfer money out of superannuation the day before death. Get the paperwork ready.

This raises another point on the purpose of superannuation. While it is widely accepted that super is intended to finance retirement, the reality for many wealthy Australians is that super is an estate planning tool. Keep the money in a favourable tax environment for as long as possible before handing it over to the children, and whip it out of super before buying the coffin.

Somewhere along the way, the bank of Mum and Dad might help in the property market.

At the last Federal Election, the Coalition successfully targeted ‘death taxes’ as a Labor strategy, even thought it was not on the policy agenda. Such tactics ensure unpopular policies are removed from debate, when a death duty potentially lowers inequality and reduces reliance on other taxes. Dead people do not vote, but they enjoyed passing their wealth to their children.

6. The Intergenerational Report

Somewhere in this divide is the harsh reality of future budget constraints. The 2015 Intergenerational Report assesses the long-term sustainability of government policies looking ahead 40 years, and it includes:

  • In today’s dollars, health spending per person is projected to more than double from around $2,800 to around $6,500 a year. State government costs will also be significantly higher.
  • Aged care expenditure is projected to increase from 0.9% of GDP in 2014-15 to 1.7% in 2054-55, and from $620 to $2,000 in real, per person terms.
  • Despite policy changes and greater super balances, payments made through age and service pensions per person are projected to increase from almost $2,000 in 2014-15 to around $3,200 in 2054-55 per person in today’s dollars.
  • Most significant of all, “There will be fewer people of traditional working age compared with the very young and the elderly. This trend is already visible, with the number of people aged between 15 and 64 for every person aged 65 and over having fallen from 7.3 people in 1974-75 to an estimated 4.5 people today. By 2054-55, this is projected to nearly halve again to 2.7 people.” That’s a lot less workers paying taxes to support the elderly.

They are coming to get us

Boomers are a large voting group. High post-war birth rates and longer life expectancies mean it’s a cohort few politicians want to offend. We Boomers fight to retain our rights, as former Shadow Treasurer Chris Bowen discovered when he was completely out-muscled over franking credits.

There’s little doubt the Labor Party will abandon the policy. New leader Anthony Albanese recently told the National Press Club following the review of Labor’s election defeat:

“When you’ve got to explain dividend imputation and franking credits from opposition, tough ask. While the call on the budget of franking credit arrangements is large, many small investors felt blindsided and it opened up a scare campaign.”

Data from demographer Bernard Salt shows Millennials already significantly outnumber Boomers, and they will increasingly hold the power at the ballot box. By 2040, the first Boomers born in 1946 will be well into their nineties and life expectancy increases will not save all of us.

Time to fess up

Of course, not every Baby Boomer has enjoyed the good times, and this article makes sweeping generalisations about opportunities. It focusses on the prevailing circumstances millions have faced, not whether they were fortunate enough to grab them. Female Boomers also did not have equality in employment and salaries.  

Missing out on the war years and the immediate austerity that followed, Boomers have benefitted from a favourable superannuation system with high limits and then little or no tax in retirement, surging property prices, excellent bond and equity markets, free education and avoidable death duties … we could go on about cheap global air travel, rapid medical advances, low unemployment and a healthy environment.

The next generations worry about the climate change problems we will leave behind, how future education and health and social services will be funded, and how they will ever enter the property market.

Let’s cut a little slack and campaign less against every change that might adversely affect us. We’ve had the politicians in our pockets, next to our bulging wallets, but it will not always be that way. The younger generations include our children and grandchildren.

Truth is, it’s been good for us. OK, Boomer?

 

Graham Hand is Managing Editor of Firstlinks. This article is general information and does not consider the circumstances of any individual.

 

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156 Comments
Geoff
November 25, 2019

5,000 new retirees a week. Drawing tax-free pensions. Most not working. Lots of assets. Oh dear.

Chris
November 21, 2019

Interest rates at 18% are a furphy. Consider the average wage at that time, average cost of a house at that time and you have a particular multiple of income to houses, plus a certain percentage of wages being spent on paying it off.

Now, compare this (with inflation factored in for both wages and house prices) and you'll see that the "18% interest rates" are comparable to 7% interest rates today on the same, average house, with the same, average wage, because the former have raced ahead of inflation and wage growth. It is simply "more expensive" to get a comparable house, and it is further out from the CBD.

Ergo, housing is more expensive today and isn't as near to the city, because in the older days, most houses were, by definition, nearer by virtue of the fact that further out had not yet even been developed.

But the boomers will continue to muddy the waters with the 18% furphy.

David Tichy
November 21, 2019

Yes but you forget that the rates went from 8-9% to 21% for investment and 18% for owner occupier's in a period of about 6 months. Many people really struggled to hold on to their home when their mortgage doubled in that period and their income didn't do the same.

SMSF Trustee
November 26, 2019

Except that people buying their first home don't earn 'average wages'. We were way below average wages when we had to pay 17%. We went without brand new furniture in the house, we sold one of our two cars to help fund the deposit and other measures to afford it.

It was not a furphy. Unlike you, Chris, I actually lived it and experienced it.

Yes, the simplistic comparison of 18% with 7% exaggerates the impact, but it's not muddying any waters - it's fact!

Chris
November 26, 2019

Why the ABS would not use "median wage" instead (as this is more accurate) is beyond me, but to state that "people buying their first home don't earn average wages" can't really hold up. It means that the majority were either less skilled than the average person (to earn that 'average' wage because "work" is providing manual labour, skills or intellectual capital for a price), or there was such a wage inequality that either (a) relatively few people from the big end of town earned substantially more or (b) that most people were earning below the average which in turn skews it, in order to qualify this statement.

The statistical distribution has to follow a bell shaped curve and most people are in those "normal" distributions. Few are outliers as either very high or very low income earners, the probability is more like that "most people are on average wages and bought an average house".

Anyway, let's run some numbers and consider how expensive things were at two points in time. 1990, with the 17% rates and 2008, when interest rates were at their highest (and it was the height of the last boom we had). Sources where I obtained these are all below. The average is what we have to work with because of the above.

January 1990 - historically high rates of 17%. Full time adult average weekly OTE was $555. Average mortgage was roughly $71,000; therefore, $555 x 52 = $28,860 average annual wage, which means house prices were 2.46x wages and repayments on a house would be $471 a fortnight (or 42% of wages).

August 2008 - highest rate since September 1998 to the present day was 8.62% in August. Full time adult average weekly OTE was $1,145. Average mortgage was $287,375 for FHO, slightly lower for non-FHO. Therefore $1,145 x 52 = $59,540 average annual wage, which means house prices were 4.82x wages and repayments would be $1,078 per fortnight (or 47% of wages).

So far, houses are showing to be much cheaper in 1990 as a function of wages and repayments were about the same (again, as a function of wages), even at these 18% interest rates.

In terms of inflation, if you consider housing as "goods and services" (and thus, what your repayment would be, then $471 in 1990 would be equivalent to $752 in 2008 (Average repayments then were $1,078). Treating houses the same way, bringing that 1990s $71,000 mortgage into 2008 would be $113,389 at an inflation rate of 2.5% p.a.

So you actually paid LESS for your mortgage in terms of both dollars (when compared with today) and your repayments. Going back, that 2008 mortgage of approximately $280,000, when adjusted for inflation would have been around $180,000 in 1990s dollars and thus, the 17% rates were not really all that bad when you consider the 7-8% interest rates, everything else being equal. You paid less for your house, you had to borrow far less and your repayments were about the same.

QED.

Sources -

https://finance.nine.com.au/personal-finance/rates-1990-versus-2007/bb5d3c99-cd59-4f81-aaa1-f5bf02cabc99

(Weekly OTE 1990 ) https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6302.0Feb%201990?OpenDocument

(Weekly OTE 2008) https://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/204B6E4CD9CF1A71CA2575680010F6DD?opendocument

(Mortgage Size) https://www.abs.gov.au/AUSSTATS/abs@.nsf/2f762f95845417aeca25706c00834efa/b224e0d9ffc9dee1ca2570ec001b2a0a!OpenDocument

(Mortgage Size 2008) https://www.finder.com.au/australian-home-loan-statistics

https://www.smh.com.au/money/borrowing/todays-housing-crisis-is-worse-than-the-17pc-home-loans-of-the-1980s-20170224-gukd59.html

SMSF Trustee
November 27, 2019

No Chris, it's because they're younger and not yet earning at the average rate.

Chris
November 28, 2019

@SMSF Trustee, maybe so, but it's beside the point. Would you care to address the rest of my post ?

P.S. in 1974, average weekly ordinary time earnings rose 28 per cent in one year alone (and then rose 20 per cent the next year, and 13 per cent the year after). Can you really imagine that happening today ?!

Greg
November 20, 2019

Graham, Your article on Boomers was really interesting….especially to other Boomers!! Well done!

I would add that, for those Boomers of us fortunate enough to get well paid jobs in financial services we can thank Messrs Hawke and Keating for: (1) their Super reforms; (2) their decision to float the A$, (3) very importantly as a consequence, the removal of capital controls; and (4) grant banking licences to 16 foreign banks. Now many of these have since gone but the impact on the 1980’s work place was enormous.

I agree with you….Boomers have a lot to be thankful for!!

Cheers

Greg

Bruce
November 20, 2019

Graham, in the section, 1. Superannuation you state: A Boomer born in 1964.
Isn't the cut-off 1960? Is this an example of cross-generation?

And yes I'm a Happy Boomer in the very Lucky Generation in the Lucky Country. It seems it would only be Boomers with sufficient spare time to read all of the extensive comments on this hot topic.

ET
November 19, 2019

To quote former Prime Minister Malcolm Fraser, life was not meant to be easy, but is was meant to be fun. As a Boomer, I have had many benefits, but many challenges. University may have been free for some, but was not an option for most. With a parent on a TPI war pension, life was not always easy, but was enjoyable. I was encouraged to obtain work in a bank at age 17, as I would be 'set for life'. I was not. I married at 21, bought the house, had minimal (secondhand) furniture, high interest rates and all the other things life could throw. I was lucky to go to university at aged about 40, part time, and work as I studied. Finally, in my mid-60s, I have a small business and good income. The super is not good. I will be working until into my 70s, but life has been fun...

Boomer
November 19, 2019

I guess when you look at the figures we have had it good.

Boomer
November 19, 2019

Our mindset, trade, land, house, kids. Not uni, travel travel travel preach then at 35, what was I thinking? That’s right me me me!!! This wasn’t a practice run OMG.

Pre boomer
November 18, 2019

I am 79. I had little super opportunity, mortgage was 18%, university education was NOT free, as female, my salary was 75% of male salary for equal work, was not precious about being female and didn't hate males Jokes abounded, life was pleasant and folks were not continually cranky Also, people looked where they were walking..

Jeremy
November 18, 2019

Graham,

I’m reading your OK Boomer piece, and enjoying it…

It would be great to see finance journalists quote compound growth rates (especially when referencing property).

I get 8.8% for your 1980 property and 9.2% for the North Shore one.

Non Boomer
November 17, 2019

This is an understatement . The boomers are the most tax advantaged and privileged generation this country has seen and will ever see. And they should be very worried, because the demographics will change, the comparatively disadvantaged younger generations will be the majority of voters and parliamentarians one day and they will have their eyes firmly fixed on boomers capital and entitlements. Just like the current booked political class has endlessly legislated to their advantage with super and policies to inflate the assets of capital owners, the next generation will be grabbing their share to the advantage of their demographic voting majority. Expect death taxes.

SMSF Trustee
November 18, 2019

Evidence please.

Inefficient import-competing industries hiding for decades behind tariff walls were significantly 'tax advantaged' for decades before the Boomers became adults.

Privileged - yeah, when they got called up to go to Vietnam and have agent orange sprayed all over them. What a privilege that was!

Oh, and the recession of 1981-83 that took unemployment over 10%, then the next 'recession we had to have' a decade later that saw several years of job losses and unemployment at 11%. That was a real privilege to live through that.

Heaven help Australia if the future voters are going to base their electoral choices on such blatantly invalid, prejudiced, blinkered thinking as yours, whoever you are. The great economy that the Boomers have worked so hard to create for this country will be blown away in an instant.

Jan
November 28, 2019

Well, Non Boomer. I'll be dead. I grew up under the shadow of nuclear Armageddon.
Then, the seminal work, Silent Spring was published in 1962, warning that many species, including humans, were being poisoned by DDT. So, I was a very depressed young person and saw no future. I did not see any point in bringing children into the world so I had none. (Studies show that not breeding is the best way to cut emissions). This choice was confirmed when articles about climate change (then called the Greenhouse Effect) began to appear in the press. Had we done something then, we wouldn't be facing a major catastrophe now. The next human generation won't be "grabbing" my money because I will be donating my estate to environmental causes. But good luck, younger generations. You are going to need it. You may steal all the BB's wealth but you aren't going to have a very nice world to live in. No environment, no life!

Whatever you think, and however you calculate compared cost of living, BBs, especially the ones born in the 1940s, lived a much simpler life. Smaller houses, no 2 car remote-controlled garage, single bathroom, many even had the dunny down the backyard even in the late 60s; no aircon, little heating, no plastic bags, no dishwashers, no plasma TVs, no smashed avo and endless coffee. My father taught us to only buy something with cash, even cars, so we saved. Well, you couldn't get a loan without a substantial deposit.

Many years ago, when in my 20s, I attended a lecture where we were asked:" How would you like to earn a million dollars?' "Oh yes" we said. Well, said the lecturer: "Over your working life, you will earn a million dollars". The other important lesson I have never forgotten from one of the former ASX lunchtime lectures was the power of compounding. So, this is how over a lifetime of working and saving, BBs come to have enough money to fund a reasonable quality of life in their retirement years. That is if they don't have some illness, chronic pain or other malady due to getting older.

Non Boomer
November 17, 2019

Unquestionably. Nearly all facets of life are now 'financialised' and leveraged to within an inch of what is possible, particularly in Australia. We need a new inter-generational pact that will require wealthy boomers to actively invest for a better society not just their financial gain. In exchange they'll get a better retirement, with less risk of systemic financial collapse

Boomer
November 17, 2019

The younger generations have even greater educational opportunities than we did...by a long shot! They have greater work diversity...but less tolerence and patience towards step by step progress. Less tolerance of the mundane, if u will! Equality between the sexes has improved substantially over time in the first world. The younger generation want to have great experiences NOW...whereas, many of us waited much longer to have great experiences - mine started in my 30s. We accepted the wait! We had to wait...the finance wasn't there for immediate gratification for the most part. The younger generation seem to spend a lot more on their bodies (fake tans, nails, lashes, eyebrows, sculting, slimming, fillers, botox, fashion)... Appearance, and the NOW, must consume a very high percentage of their income. Also, eating out seems to be a very frequent activity... Costing out a younger persons current lifestyle, VS our lifestyle in our youth, I believe show where a lot of the new money is going. Most of the people I knew growing up didn't have a silver spoon in their mouths. They worked for everything they had. Those who were strategic generally succeeded. The GFC dismantled wealth for approx. 2 billion people in the world...most of the older people who lost their wealth will never recover from this...I have many of friends in their 50's who have negative equity...and feel that they will have to work into their late 70's, if not their 80's just to survive. It's worth having wealthy members of any society, they invest in companies, who in turn invest in employment. Most of them have paid mountains of tax in their lifetimes. The top 20% pay taxes and take nothing. In their retirment, the wealthy who remain off the governments books is an absolute blessing to the country. In Oz, 20% are wealthy and take nothing; 20% pay tax and receive virtually the same amount back in benefits; 60% are leaning into the system. Without the wealthy having contributed as they did for 40 to 50 years of their lives, where would society be? Many wealthy people are very generous... I believe that there is essentially abundance for most people...they just need to know how to strategically acquire it. Also, wages in Oz need to increase - the middle class needs to return! Money has to reach the hands of the lower and mid-income people soon. Confidence needs to return more so. We are all in this together...until we understand this, separation is the disease...'name calling' will never solve it...

Geoff
December 01, 2019

I like your comment '. . . there is essential abundance for most people ... they just need to know how to strategically acquire it'. So very true! Unfortunately too many people currently in the 20 - 40 age group do not understand self-discipline, simple financial planning and living within their means. I respected all 3 principles and scratch my head when they say 'I'm not saving for my retirement, we'll get the old age pension plus all the perks!'

Boomer
November 17, 2019

Lived through two recessions as a young working adult trying to start my own business.Putchsased my first home with 16.5% interest rates.Ran a business under sustained periods of high inflation,union militatcy, strikes, and increasingly unsustainable workers rights, 17.5% leave loading, all from the position of a small business.Could not afford to take holidays myself, and effecively lost control of my business with unfair dismissal laws.Generous super laws was the only thing that eventually enabled me to retire, on what was a very frustrating working life constantly being interfered with by increasing union demands and government regulations. No, we boomers had it tough.

John Bone
November 17, 2019

Graham - If I hadn't been reading Cuffelinks, Firstlinks for so many years this would be a time when I would be reconsidering my "subscription" which it isn't.
At what point in time do "the boomers" accept the mantle as being responsible for where the world is today? It seems that "climate change" and "economic benefits" are going cap in hand,
A lot of water passed "under the bridge" before we were here to make an impact and did we knowingly contribute to CO2 levels rising to initiate "climate change"? The world has always been in a state of flux economically and physically and will continue to be so, which makes prognostications tenuous at best and encourage the use of the "retrospectoscope" to see "the benefits" so accrued to, yes, again, "the boomers". I am not ready to lie down and start apologising for what has transpired. Are you?

Boomer
November 17, 2019

Yes, I agree we had good opportunities and still do. However I feel we also we were tempered and resilient and told to have patience and persistence. I believe that some people today have the, I want it and I deserve to have it now attitude! Whether through marketing or social media the latter seems to dwell on what you don't have rather on looking forward to what you're striving towards.

Boomer
November 17, 2019

How does someone earning $160,000 get taxed at top marginal rate let alone two ppl splitting that about, as you assert.

Graham Hand
November 17, 2019

I'm assuming this is their marginal tax rate to illustrate a point. There are other sources of income other than pension income, and it's a decent chance that a couple with $3.2 million in pensions have investment income outside super. That is my example, but of course, you could assume otherwise.

Non Boomer
November 17, 2019

This is an understatement . The boomers are the most tax advantaged and privileged generation this country has seen and will ever see. And they should be very worried, because the demographics will change, the comparatively disadvantaged younger generations will be the majority of voters and parliamentarians one day and they will have their eyes firmly fixed on boomers capital and entitlements. Just like the current booked political class has endlessly legislated to their advantage with super and policies to inflate the assets of capital owners, the next generation will be grabbing their share to the advantage of their demographic voting majority. Expect death taxes.

Tony Culberg
November 17, 2019

Tony Culberg, born 1950

In 1975 the top marginal rate of tax was 67%. Average rate of tax was over 50% for high income earners. At $40,000 taxable, tax was $21,220.

Boomers built:
The Telephone network
The Snowy Mountains Scheme, and other power generation
The eastern states electricity grid
The highway network
The rail line to Darwin
The standard gauge line Sydney to Perth, Sydney to Melbourne, into Brisbane
Many universities and Colleges of Advanced Education

Later generations have enjoyed the productivity gains from all of the above infrastructure. As Australia has no net debt, all users today get the assets almost for free - no interest bill!

Boomers paid very high electricity usage costs and telephone calls, knowing we were building infrastructure.

Annual University fees were equal to the annual salary of a (junior) white collar worker until 1973. Books and accommodation were additional.

Neilx
November 17, 2019

By the time younger generations are in total control, boomers will be dead. Then those generations will likely be envied by ones even younger. And the cycle continues.

Boomer
November 17, 2019

I was lucky enough to be able to work 100 hours per week for many years in two different careers to build up the retirement benefit I now have. Each of my children have chosen their respective paths, and the ones that are working hard and forgoing immediate “ lifestyle” options are doing well. The one who is in the “ the world owes me a living “ set, discussing life over the third latte for the day is not doing so well.

Gen X
November 17, 2019

Wow - by that comment, I'm sure that particular child knows exactly how little you think of them.

Boomer
November 16, 2019

A Hand to you Mr Hand for a Great article...but You didn't include Gen Y and 'The Great Generational divide' chart age groups are NOT Correct....Thanks : }

Graham
November 16, 2019

Hi Boomer, I didn't leave Gen Y out of the table. As the first line of the article says, Gen Y is another name for Millennials, the name used in the table.

Boomer
November 16, 2019

Yep I have been advantaged as the son of migrants who arrived as refugees in 1948. Born here I grew up with a working class father who was able within five years of arrival to buy land and build a house which was paid off by his super balance of $3,000 in 1970. My mother lived comfortably on the widow's pension as my brother and I left school soon after and embarked on our careers without tertiary education. We had the classic working class upbringing and never considered ourselves poor or disadvantaged, although looking back we like millions of others had a basic lifestyle which met all our needs and educational and medical systems which were excellent in their day. I was able toadvance a career in the social services and health sectors rising to a senior management role by 2003 which did set me up for retirement. I was able to sock away $100,000 a year for a few years and do the transfer to my wife to build up her super. I could never have imagined 20 years ago I would be as wealthy as I am now with assets outside our home of $2.5M including super. I realise this places me and my wife in the top 5% if not higher of the world's wealthiest people. I work in a charitable sector for a fraction of my last income 8 years ago and collect an indexed government pension tax free as well as sharing income with my wife from $1.5M in super. We have an income of about $200,000 pa of which only a small amount of my earned income is taxed. Should I pay more tax? Probably. However I find it almost incredible that our retirement incomes policy pays anyone a pension while they have $800,000 in super or indeed a home which can be reverse mortgaged to provide income in retirement. It would be a brave government that would alter the current settings. The Libs did it once and got away with it (just) so it needs a joint policy to look at fairness. One policy option is to apply a means test to aged care and have no government subsidy for people with a defined level of assets. After the outcry, this alone would drive quality in the aged care sector as people suddenly look at value for thir dollar, rather than taking what's on offer subsidised by the government. Heck, it may even drive non-institutional models of support for the aged. And families may actually start looking after their aging parents if it preserved family wealth. While my kids are in a good space compared to where I was at a similar age, my grandkids are less likely to be as advanataged as myself or my children. So yes there needs too be less reliance on earned income taxation and a focus on wealth taxes. There are certainly enough of us to make a huge contribution even if marginally taxed.

Boomer
November 16, 2019

Somehow need to go after the seriously rich before & when they die. It just perpetuates inequality when they “gift” their children & grand children money.

Boomer
November 16, 2019

Many biases in the article. 1. When you went to borrow from a bank in the early '80's to buy a home, a wife's income was not considered because she may fall pregnant. This restricted the amount you could borrow hence quality of property purchased. 2. Interest rates hit 18% for some of us.Cost of housing today is no different than it was in the 70's when indexed for inflation AND interest rates. 3. Typical for husband and wife to work x2 jobs to build a deposit and repay a mortgage 4. We owned our homes and perhaps a car and not much else. Our lives were simpler so all our focus was on paying of the home. 5. Air travel was too expensive. I'm in my 60's and we have just started to travel in the last 5 years

Gen X
November 16, 2019

As one of many skilled migrants, my husband and I started our lives afresh 18 years ago, paid our fair share of taxes, saved really hard to own our home today. It’s up to my siblings and I to support our parents as they never had the opportunity to buy a home, unlike my mother’s baby boomer siblings who had all migrated to Australia in the late 70s and have prospered. I doubt I’ll reach their level of prosperity when I reach their age mainly because of the differences in the state of the economy and government policies in place. I don’t plan to rely on the age pension at all if I can help it. But the government should not change the rules without much thought to people who have worked hard and saved to be self sufficient in their later years. Having said that, those who are wealthier than most in terms of super should perhaps pay some form of tax? Graham, you’d be happy to right? :-)

Non Boomer
November 15, 2019

Graham described it well: benefit from a free education and rising property prices funded by the next generation taking on world-leading levels of household debt, that also helped underwrite a world record run without a recession, and is all but impossible to sustain, let alone repeat. He also nailed it that the boomers are probably the best prepared, most politically active cohort that will fight tooth and nail to protect their privileges.

Boomer
November 16, 2019

Not "funded by the next generation". All the bonds issued to finance free university education had less than a 10 year maturity and government net debt had been reduced to zero by the 1990's. So it was the taxes paid by the SAME GENERATION, ie we boomers, that paid for that free education in the 1970's.

Which have also paid the pensions of our parents generation and the school education of the next generation.

We have to get over this false idea that the current younger generations have somehow been robbed by the economic success and prosperity of the previous generation. It's just not true.

C
November 15, 2019

What about quality of life. Do all the boomers really think that it is better now? It takes 2 people , working full time, to buy a property. It may take up to ten years to save the 100 k deposit. (rents are very high, no job security, very low wages growth and paying off help debt). Very common to spend a couple of hours a day commuting (tolls or sardines). Then they can’t afford more than 2 children (and childcare for 2 will take up one wage) Everything is very competitive and the constant pressure ( of population, for resources, of society’s expectations) makes it tough. I see plenty of young people working really hard and am tired of smug comments about how lazy they are.

Pre Boomer
November 15, 2019

I am a 1939 baby. It was tough for my family during the war years and tougher after when my mother and five school aged children, I was the youngest, moved into a tin shed in Little Bay Sydney, no electricity, we bathed in a tin tub and we slept on camp stretchers with army blankets dividing the male and female sleeping areas for 7 years. There was no Government assistance what so ever and my mum worked in Sargents Tea Rooms serving meat pies, mashed potatoes and peas to put food on the table. Child endowment I believe was first introduced when I turned 8 years old. I was forced to leave state school after completing matriculation at 16.5 years to help my mother. I got a job in a factory, moved a couple of times learning about life and the industry I was working in. Eventually I climbed the ladder and was asked to move to Melbourne at 23 years of age. There was 10 people doing exactly the same work that I was, nine ex Melbourne Grammar and the senior man (the State Manager) went to Wesley. I was not really accepted by anybody because I was "State School". Four years later the senior man was transferred to Sydney to become number two in the company and I was made State Manager. When I turned 37 I had my first world business trip. I travelled overseas on business every year for the next 30 years. During this time circumstances forced me to change jobs but I stayed in the same industry anyway eventually my last position was Managing Director. I was was reasonably well paid but never big money. In 1987 the day of the share market crash I spent even penny that I had and bought 1000 NAB shares @ $6 per share and eventually sold them for $31.5 each. This started my interest in the share market. I have had some good times and bad in the share market and today I have a few dollars and I intend keeping them for my family. In my opinion the younger generation has never had it so good. They want everything the Boomers have plus my generation have now without putting in the hard work and saving. I know of families with children in their 30s who drive BMWs, go skiing in Japan etc and complain that they will never own a home. I enjoy reading many of the "firstlinks" articles and could comment on some of them that are not exactly correct. For example I went to one of Australia's top Superannuation Specialists to set up my pensions, I had two, and was advised to start a Market Linked Pension that I cannot break and this pension is treated as an annuity and I pay tax on my pension. My wife has a very small pension as she stopped working after our one and only child was born and as a consequence of this is our tax free pension amount is $2 million despite the fact that our combined pensions are $3.4 million. I think that is enough. Regards, The Fish

Non Boomer
November 15, 2019

In attempting to "do the best we can" for our children we have "spoilt them" , raised their expectations too high and way above the level that MOST are capable of achieving. The result is that they are still ADOLESCENTS well into their 30's and sometimes 40's and incapable of independence or survival on their own ( a generalisation , but a pretty accurate assessment IMO ). They are RESENTFUL , envious and bitter about their own lack of resources and drive ; they want the entire World presented to them on a platter.....no sweat or WORK of their own ! Having said that , they tend to be kinder to one another and extend all sorts of allowances to the wrong sort of people , on the basis of 'fairness' and 'equity' , are gullible and politically malleable , know NO HISTORY , are vague about GEOGRAPHY , generally have NO PLAN for their lives or PERSISTENCE in attaining goals . I fear for them should ALL these peaceful years WE OLD FARTS have conferred upon them [ at considerable effort and expense to ourselves ] come to a crashing halt with a depression or worse , a war , because they show no resilience or strength of character and would be useless without their "smart phones" and other electronic gadgets to support their tenuous existence ! Sorry , but I don't see that these Generation X , Y or Z have done anything to cement their success. They have merely tinkered around the edges of THINGS invented by previous generations but FAIL to either realise or appreciate that fact ! It is sad......but simply shovelling money or some perceived benefits ( welfare ) in their direction , such as advanced education they neither understand or utilise or have to pay back UNTIL THEY SUCCEED ( like 1% of them !? ) is a waste of resources. They NEED to MATURE and become RESPONSIBLE PEOPLE and not continue as parasites and leeches ! IF you have persisted , I think that YOU will have reached a conclusion about MY opinion by now , so I will stop !

Boomer
November 15, 2019

Over my entire working life my annual salary averaged at under $25000 ( about a quarter what someone would receive today ).We still managed to do well by only buying when we had the cash to do so. No debt except for a housing mortgage. Our house was a 2 BRM brick and iron, no hot water , outside laundry and toilet. We still live in the same house which we have extended twice as the family grew. No holidays except maybe tenting in the country occassionally.No going out for coffee and cake, lunches ,dinners etc except very occassionally. Definitely no overseas travel. We always saved a little and fortunately started purchasing shares( no property unfortunately) and using compounding grew this to now self fund our retirement ( No government assistance ) How many of our later generations do any of this? I agree property prices went stupid driven by cheap money and greed ( gen X also had a good hand in this one). Property prices are still high but we chose not to take the pain of rebalancing prices, wages etc when the GFC hit, so now we need to play catch up which will probably take another 10-20 years minimum. My parents always said "remember if you earn $1 only ever spend 80cents." and you will do ok. You make your decisions and you suffer the consequences.

Boomer
November 15, 2019

Not all Boomers ( Gen Xs etc) are the same - as is true for every media generated category. Us "Boomers" born before 1956 (which is the majority 54%) had very different conditions to the post 1956s. We did not have free uni fees. I left school in 1966 and had done 2 UG degrees by the time uni fees were abolished 1/1/1974 - both degrees had full fees privately paid. 64000 of us were conscripted including me. About 16000 had to serve in Vietnam during a very active war. Most of us could not drink or vote until we were 21, or rent houses, sign documents etc without parental consent. Try making Millenials do that until they are 21. I started full time wage work in 1973 with super, BUT I was forced to cash in my super completely 3 times before 1990 because of changes of jobs. Thousands of us suffered systemic sexual and physical abuse at school and in other public and private institutions as children with no redress of any sort even now. Childhood death rates from infectious agents was very much higher through the 1940-50s. Children at my primary schools regularly (but not frequently) died from TB, whooping cough, 'flu', sepsis, etc. at levels now totally unknown/experienced. We had our own global existential threat of instant nuclear annihilation that was as ever present and more immediate than the very real current climate concerns - we did classroom 'duck and cover' drills for nuclear attack in 1956. But the real point is that every generation has its burdens and its benefits. Just looking at the advantages of one and the disadvantages of the next is a simple false comparison.

Boomer
November 15, 2019

Your comments in your article, Graham Hand, are all relevant. I am a financially independent female and up till age 62 I worked hard and then retired. At age 65 (I am now 73) I was entitled to an age pension, but have never taken it and hopefully never will. Every year I save the taxpayer $25,000? The family next to me has 2 adults and a son who for some strange reason can't work - they draw $75,000? in benefits every year. Why don't you included these statistics in your analysis. This Boomer is not "costing" the tax payer anything - I pay full price all the way.

Boomer
November 15, 2019

We went to work at ages of 15 & 16 and principally trained on the job in trades and skills which no longer exist, We did not have the opportunity of free education and university meant you needed a scholarship or external financial support as our parents could not afford it. we married young and had families young and were committed to mortgages in our early twenties. We did not have the same opportunities of tertiary education, Gap Years or Overseas trips. But we can enjoy our retirement at an earlier age.We did not have company supported superannuation until SG of 1992. I am a self funded retiree and my pension for the last ten years has been roughly equivalent to the aged pension without the benefits and my super balance has remained similar.At retirement we also downsized and down market our housing to get the benefit of equity to do some travelling and enjoy life. So not every Boomer got all the riches. But life is what you make it !! and it is interesting that all those who think things are unfair and need a hand out are the ones who have yet to put in.

Kevin
November 15, 2019

Haven't read the replies so much of this may have been mentioned.The myth of the boomer.
Spent my life working in a trade,I don't think any of the companies I worked for exist now.

Always wondering if I would have a job next week.
A house that cost around 4 years wages in the 1980s at interest rates of 18%, can be bought today for around 4 years wages at interest rates of 4%.I often have a laugh when I am told how everything was so cheap years ago .I rarely waste my time explaining nominal and real.

If something cost $40 in the 1970s it cost a week' s wages.If something costs $1500 today it costs a week's wages,it wasn' t cheap because it only cost $40 in the 1970s.

Everything is cheap these days,people don' t spend their lives working out how to make things worse and more expensive,they work out how to make things better and cheaper.

Something as simple as a CD,I still have CDs bought in the 1980s when they came out.They still have the price on $30,around 3 hours wages then.Imagine paying $100 for a CD now.

The player to play them on,$400.Bought a DVD player for the bedroom last week,plays everything,cost $30.Everything is just so expensive these days ( laughing loudly)

Deciding I may need to take care of my own future I borrowed money to buy shares,knowing nothing at all about shares.All I knew was how to compound a number at a given rate over a given period of time.Still wondering how I was going to pay the loan back,and would I have a job next week,and how high the interest rates were.

Thankfully the compounding rate I worked on was 7%,they compounded at more than that,and the period of time turned out to roughly be what I worked on,a few decades.Life must be so difficult these days when you can't spend $5 and retire with millions 20 minutes later.

Brings to mind a track from the Who live at Leeds .Young man blues, " young man,ain't got nothing in the world these days"

I think it was written in the 1940s or 50s.Then it carries on to say how the old man has got everything.Imagine if the young man in the 1950 s spent some money and waited 40 years for it compound.Imagine if the young man in the 1970s spent some money on an asset and waited decades for it to compound.
Now for something really weird,imaging if a young man ( or woman) in 2020 spent some money on an asset,and left it to compound until 2060,wouldn' t that be so weird and just off the planet.

Neil
November 15, 2019

Yes he forgot to mention the high interest rates that we had to deal with. There were times when I did not know if I was going to be able to. The big thing about the Alphabet Generations is they have much more opportunity than we had. We grew up and worked in a much more constrained economy. The high interest rates was just part of the transitioning cost to a more open economy. We paid that cost on their behalf

Dudley.
November 15, 2019

How would you ever get the younger to work hard and build there own wealth if they were not a little jealous and envious or at least shown what is possible?

Materially successful societies depend on it.

Boomer
November 15, 2019

We went to work at ages of 15 & 16 and principally trained on the job in trades and skills which no longer exist, We did not have the opportunity of free education and university meant you needed a scholarship or external financial support as our parents could not afford it. we married young and had families young and were committed to mortgages in our early twenties. We did not have the same opportunities of tertiary education, Gap Years or Overseas trips. But we can enjoy our retirement at an earlier age.We did not have company supported superannuation until SG of 1992. I am a self funded retiree and my pension for the last ten years has been roughly equivalent to the aged pension without the benefits and my super balance has remained similar.At retirement we also downsized and down market our housing to get the benefit of equity to do some travelling and enjoy life. So not every Boomer got all the riches. But life is what you make it !! and it is interesting that all those who think things are unfair and need a hand out are the ones who have yet to put in.

Non Boomer
November 14, 2019

But God forbid anyone to actually suggest they've had it good. They'll be seen in a hundred years as the 'golden generation'. The gifts of peace, modernisation & cheap property without the downside of globalisation, expensive property & aging populations.

Boomer
November 14, 2019

I actually think both are true in their own ways. I would like to see the mathematical comparison between the combinations of, yes, the lower property ownership entry prices in the ‘80s, but at several multiples then of what current charged, versus, again yes, the current very high entry prices, but at interest rates at historical lows. Seared into my memory is my first attempt to enter the Sydney market, at 15% interest, being told by the lender to go away and sell my car in order to be granted the loan. I see no such sacrifices today, and I think that is real; younger generations want it all NOW, whereas my recollection is of doing without in order to service the mortgage on a property which would be seen today as sub-“entry level” standard. However, we definitely dodged big bullets as far as education costs, although the bank of Mum & Dad was still hit with our kids’ HECS fees. The frightening statistic is the plunging number of working-age taxpayers being called upon to support the economy as Boomers leave the workforce. I am pleased to see the acknowledgement that tax (and lots of it!) was paid on the income that allowed superannuation savings to be made; those savings were put away as the result of many personal sacrifices, and hard choices to forgo many of the pleasures of life seen as a birthright by too many now.

Boomer
November 14, 2019

You mentioned 13.5% interest rates for most but not the 17% that a lot had to pay. Try explaining that to the ME generation who think 4% interest is high Then there is the matter of first home buyer grants/stamp duty relief & subsidised child care none of which was available to my wife & I. When our first child was born my wife had no choice but to leave work as child care cost more than she earnt. This was the norm. Almost everything has got cheaper in real terms, particularly the important items including cars, furniture, food and clothing. In 1981 as an 18 year old second year apprentice I purchased a Bosch drill from my local hardware store who had them heavily discounted at the time. It cost $600. That was more than 6 weeks pay! You can now buy the same thing from Bunnings for under $50. In 1981 it was a major investment that required saving very hard for a very long time. Now little more than loose change will buy the same item. In 1984 I purchase my first TV, 28 inch cost $850. Again multiple weeks pay. 16 years later I purchased it's replacement, another 28 inch TV which cost $800. A few years later a 39 inch TV cost me $350 and recently a 65 inch TV cost less than $600. I could go on with endless similar examples. In 1980 when I started my apprenticeship in the metal industry some workplaces considered apprentices to be disposable, literally. Thanks to the efforts of Boomers everyone now has a reasonable expectation of not only coming home from work alive but without serious life changing injuries only to be thrown on the scrap heap. The ME/Now generation are the ones who benefit the most from the medical/Health advances/longer life expectancies brought about by Boomers. The super advantages you talk about generally only benefited the wealthy, not ordinary folk like myself who simply don't have the wealth required to take advantage of the concessions you mentioned. Again, super was not available to me until the 3% SG come into effect. Average house sizes have doubled in less than my life time hence the term McMansions which the Me generation expect to have as a first home in a location that suits them perfectly. Recently a 27 year old woman said to me the problem with her generation is they expect to have everything their parents have but without working 40 years to get it. Can't argue with that. Oh how I wish I was 20 and starting out now, it would have been so much easier!

Chris
November 21, 2019

That's because in those days, a Bosch drill was made in (West) Germany and was a quality piece of equipment, so you paid for it and it's probably still going just as strong today as it ever did all those years ago. Now, everything is cheap and disposable, but if you want, you can still buy quality equipment...you'll just pay (comparable) prices for it once inflation is considered. 

Tony Dillon
November 14, 2019

I'm not sure about the existence of intergenerational warfare. It certainly was topical around election time, and it was beat up by the Labor Party economically, and The Greens more socially. Both decried the wealth created by so-called Boomers, with The Greens also poking the climate change bear, targeting the vulnerable thinking of the young. It's been said before that "if you're not a socialist by 20, you don't have a heart; if you're not a conservative by 40, you don't have a brain". No wonder both parties have pushed for a lowering of the voting age to 16 in the past.

The fact is the world has moved on. It’s easier to travel, connectivity is constant, and we have the technology revolution. Millennials have different priorities, different challenges, and generational experience doesn’t repeat. You adjust to the conditions of the time. And interventionist policy to try and equalise generations is pointless. Let the market play out and allow the participants to adapt.

Robyn
November 14, 2019

Graham, you are in a position of power and influence.
I hope no politician or wannabe reads this stuff.
Mostly sweeping generalisations based on on a narrow experience of your luck riding the Sydney property market.
Most Australians have not shared in your personal prosperity.
You may well afford to give away some of your wealth in increased taxation.
I can't.
You may speak for your uber rich Sydney mates.
You don't speak for me.
I am comfortable in my modest and self funded retirement in a regional area.
I could never have afforded Sydney housing.
Graham, you need to get out of your privileged bubble and see how the rest live.

Boomer
November 14, 2019

It's somewhat simplistic to blame the current state of the world upon one group, and your comment regarding the fact that not all boomers benefited from the opportunities of the past few decades is a salient and important point. Not all boomers were fortunate enough to attend universities and achieve high paying employment as a result. Many boomers did not enjoy fruitful interesting employment that offered little more than a living wage. Not all boomers worked in white collar industries. Many low skilled workers endured years of toil in factories and the like. While some received free university education, others, like me (although being 57), attended university later in life and paid full fees. In in the early nineties I also endured high interest rates, a business collapse and a loss of the family home as a result. Which ultimately mired into a divorce. While the bigger political, environmental and economical events may fill the future's not-to-distant horizon, taking up screen time and column inches and filling younger people with a sense of dread; it's possibly the smaller day-to-day personal events that individually impact each of us that shape our world view. The OK Boomer cause and arguments like it fail to see that each and every generation has it advantages and pitfalls. My parent's and grandparent's generations had their own challenges. A couple of World Wars, a Depression and the Vietnam War certainly coloured and shaped their views of money, entitlement and opportunity. Each generation forges it's own path, and while it's prescient to learn from the mistakes of the previous generation, it's foolhardy to blame those who have gone before. Those who have for the most part acted in what they believed were the best interest of themselves and their families; and thus for the greater good. While the present may appear miserable for some, the past would show that in the future there is always some promise of improvement. And that doesn't break us, makes us stronger.

Carolyn
November 14, 2019

This is the best summary of the life cycle advantages of being a Boomer that I have read and the generational imbalances inflicted on most, but Not all, younger folk. I was born '46, rode every wave in every sector, saved and invested, therefore now relatively wealthy. Voted Labor in May, '19 due mainly to their franking credits policy from which I get approx $14,000 p.a. in credits back from the ATO therefore from the public purse. Have known for years that this return is unearned, undeserved and unfair and was a big supporter of this ALP policy and their other policies. LNP manipulated an uneducated electorate into crying "foul" against their own best long term interests. Now I'll take the money and run, if THEY insist, but share it around in more generous assistance to those less fortunate. Will sell some inherited property ( from war- time saver parents born 1915 and 1916 ) and pass on windfall to my 2 hard working, thrifty, educated but low income mature adult children as hefty deposits on house each, so sharing the 3 generational wealth of this family unit. Not everyone is so fortunate to get a hand up through handed down wealth. The shrinking worker base carry too much of the load. The pyramid is all arse apeak. Thank you for a clear, articulate piece of work. This is my lived experience and I know what you have written to be valid and true. Trust your piece can be printed or posted. Good to share some dispassionate facts, some light in the fog. Cheers, Carolyn

Boomer
November 14, 2019

yes we did have it good but we also used that free education to get good jobs and build careers, those of us women bbs had to fight hard to break new ground and as such we have paved the way for the next generations to have opportunities they now take for granted. there are always many sides to a story and many options for envy. i also believe many bbs are sharing their wealth with the next generation not just by leaving it behind but by helping the next generations now both with our money and our time - how many bbs are minding grand kids : great nieces and nephews etc on a regular basis and providing real financial help to those coming thru now , great article by the way!!

Chris
November 21, 2019

Mine aren't. They're both in a care home and whatever money they have (from selling the family home too) will go on their upkeep. I'm not getting, nor expecting any inheritance from anyone at all.

Boomer
November 14, 2019

I'm 68 and received very little of the reported benefits received by my generation. My wife and I are where we are today because we worked bloody hard and saved what little we had, no other reason. After the children left home, I held down two jobs for a period of my life and my wife worked also for 30 years. The only family holiday we ever had with our children that I can recall was a solitary trip to the Gold Coast. Most of our savings evaporated funding university education for our children but frugal living late in working life still allowed some super to accumulate. In retirement, we have enough to live comfortably from our super savings but an income which is still less than that of somebody on a full aged pension and $395K of financial assets! I see young people today with much better lifestyles than we ever had, spending money like we could only have dreamed about 40 years ago. Before retirement, we only ever ate out once a year and that was only because it was the company Xmas dinner and it was free! There is obviously a group of people who had/have a high income allowing high super contributions but we weren’t among them. The same group has also done well from property price movements, but we weren’t among them. My wife and I are not a tax burden as commonly suggested and we actually save the country money by fully funding our retirement, a fact that I never see mentioned anywhere. So please don't generalize, lumping everybody into the same bucket. Be a little more respectful towards the many people like us. Acknowledge our journey and achievements. To the younger generations, I say . . . No-one is forcing you to buy a house in inner Sydney or Melbourne. There is plenty of real estate in regional areas that is affordable. The house you are buying for $1.5M can be had for $350K in my street! It’s your lifestyle and your choice so stop whingeing!

Lyn
November 14, 2019

Graham, You are so Sydney or Melbourne centric.
Many of us boomers live in regional areas or Adelaide so have not been part of the huge property value increases that you have enjoyed.
You need to get out there and see the other Australia

Boomer
November 14, 2019

Actually I'd like to say yes and no. If you were born immediately after WW2 your life experiences were significantly better, booming post war economies, full employment, job's for life, defined benefit schemes, a manufacturing sector that still made stuff, cheap housing, strong unions and the best standard of living in the world, and when the bad times started in the 70's you were by and large home and hosed, and I have friends in their late 60's to 70's who brag about this all the time. But if, like me, you're a late baby boomer and came of age during the Whitlam years, life was a lot more challenging. Yes we had free tertiary education but fewer jobs when we graduated, constant oil price shocks and boom bust recession every couple of years, trying to find a new job and starting all over again really takes its toll and has made us lifelong saver, we saved to pay off our houses, we saved for renovations and then we saved for our retirement all before we bought brand new cars and travelled the world. This is not every BB experience but its not the rose garden younger generations seem to envy so sneeringly. And by the way, houses have ALWAYS seemed expensive and out of reach, supply and demand teaches us that vendors will always ask as high a price as possible until people stop paying it. Thats why its called " REAL ESTATE "...

Boomer
November 14, 2019

My husband & I lived through 18% mortage interest rates. I had to go back to work with 6 month old twins and he worked 6 days ( and sometimes 7 days) for nearly 2 years so we didnt loose our house. Very hard on a marriage & young family but we survived - took us quite a few years to recover & 7 years to be able to afford to lay carpet! So yes it was not a cruisy period in our life !!

Pre Boomer
November 14, 2019

As a preboomer, and female, my life has been difficult, but we survived and succeeded by using strategies, growing our own fruit and vegetables in the Sydney back yard, camping in national parks, taking food never eating out, taking a thermos for coffee, had we had the expectations of todays youngsters for entertainment and restaurant life, we could not have saved the $10,000.00 dollar deposit for our modest home, nor survived my husband being retrenched with no money other than minimum day a month holiday and his final pay one month before Christmas, when all engineering works shut down till February,and would not recruit before the end of March. As a graduate ,I had been responsible for training and lecturing the management trainees, 19yr old male school leavers all earning on starting $500 a year more than I, female, was paid, Do you still think we had it easy?

Boomer
November 14, 2019

70yrs without war. All the benefits of a growing population which was us.Deregulation of finance which introduced the mother of all property booms - at least in the anglo countries - enabled by a steady decline in interest rates for 30 odd years consequently our properties have grown in value at a ridiculous rate.

Boomer
November 14, 2019

Not to mention the benefits of testamentary beneficiaries trusts for inter generational wealth transfer and tax minimisation. Since the death of my parents and with the benefit of cranking credits my children have had a very healthy tax free income to finance education and capital city accommodation

Boomer
November 14, 2019

Yes, we've had good opportunities, but we made the most of those opportunities. I started work on the farm at age 11, and worked every school holidays until I started full-time work at age 16. Coming from a family of 8 kids, if I wanted something, I had to earn it for myself. After taking early retirement, I worked part-time over another 10 years. What I have now is the result of hard work, a good work ethic, and sound financial decisions. These advantages don't just fall into your lap - you've got to work for them.

Boomer
November 14, 2019

Great summary of our lucky situation.

Pre Boomer
November 14, 2019

At 76, I am willing to share some of the financial advantages we pre boomers & boomers have had. Of Course Politicians, Public servants, CEOs , Company directors, Clergy, Judges,etc. etc. must be included as part of a sacrifice, not just those who own Australian shares..

Non Boomer
November 14, 2019

This whole "debate" smacks of Millennials simply being jealous of the wealth Baby Boomers have accumulated. It's natural that the longer you've lived the more you have. Then again, the Millennial mindset is always to find someone else to blame for their (perceived) troubles and Boomers are an easy target.

Non Boomer
November 14, 2019

The Boomers grew up after WW2 with the knowledge that financial security meant not spending more than you earned and saving for necessities was the mantra of the age. Now they enjoy the rewards!

Boomer
November 14, 2019

The 1950’s were tough for our parents. The 1960’s I had to do national service. The 1970’s and 1980’s mortgage rates were very high. We were not advantaged over todays generations

Boomer
November 14, 2019

Younger people have the advantage of contributing to super at start of working life. Boomers didn't really start until after 1992 but we were able to buy property. So I think it probably works out fairly evenly even if they don't get to buy their own home

Boomer
November 14, 2019

I agree we have had opportunities although clearly not everyone has had the financial resources to take advantage of them.

Boomer
November 14, 2019

It's not anyone's fault, it's just the circumstances we happened to live through (I'm a late boomer - 1963). Today's young get to travel from age 18 yet we never had that opportunity really, you got a job, bought a house and brought up your family. It's swings and roundabouts in some ways, yet I acknowledge things seem harder these days for the young.

Boomer
November 14, 2019

Being able to build wealth in a time before the country accumulated the highest private debt in the world

Boomer
November 14, 2019

Every generation has its opportunities. My father had a better standard of living and opportunities than his father and I have a better standard of living and opportunities than my father. I'm not convinced that my son won't have a better standard of living and opportunities than me yet.

Boomer
November 14, 2019

We had free education, however we have ridden the cycles just as younger people will have to. The GFC was wealth destructive and our generation was the product of depression earlier this century and wars. We were lucky to be part of the recovery from these major events.

SJ
November 14, 2019

I’ve been working in financial services for five years now (a veteran!) and I’ve found very few articles that bring context to my generation’s financial struggles. I felt that it acknowledged (in a much more articulate way than I can manage) why it’s so important to understand why these conditions are different to what has been experienced before, and consequently, why financial literacy is so important.

My father was also born in 1957, but he moved us to Australia in 1996. He sold everything that my parents owned to afford us this opportunity. In the 23 years since his fresh start, he has been able to purchase a home in Sydney and pay off the mortgage, build a modest but decent amount of super and still live a relatively comfortable life while doing this. I am not so sure that he would have reached the same outcome if he migrated in 2019. I think it’s easy to see that there are tougher conditions now – but this article provides deeper context as to why I haven’t purchased property at the ripe age of 26, why I haven’t saved as much (it’s hard to when HECs payments make any pay rise I have negligible) or why we have differing (lightly put) views on taxation policy reform, climate change and social policy reform. These things really matter to me because they have a direct impact on the quality of life of people my age, now and going forward.

There’s a lot of room in financial services to engage younger generation and do some good – sometimes it’s just acknowledging that there’s room to compromise on policy and progress to offer a bit of relief for those inheriting the system.

Thank you for an incredibly refreshing take – I’ve forwarded it on to a bunch of my mates who have already sent it along to their parents.

P.S – Gough was controversial but remains my favourite Prime Minister. Nice to see him in an article from our industry without being completely trashed.

AMC
November 14, 2019

The problem is that the classic image of a 'Boomer' is a grey-haired man in a suit, possibly with a wife. These are the people who have done well.

I have never agreed with categorisation of Boomers as those born in the 20 years after the end of WW2 - Generation Jones feels far more accurate. My parents were far too young to go to war, and by the time I was a teenager, the good times were well and truly over.

With a recession when I left high school, two more in the 80s, one in the 90s then the 2000 Dot Com bust and the GFC, I've had over a hundred jobs (and no, I'm not joking); as a result, I've been part of the precariat for forty years. Some paid well, almost all paid less than the men around me received, but none of them came with superannuation until it was compulsory; very few women were even allowed to join the company super scheme.

I was retrenched a week after getting married, when I had my child my employer insisted that I'd resigned instead of taking maternity leave, another employer gave male staff a 33% payrise when they turned 30 while stopping pay increments to female staff, and one employer fired me when I refused to move into his house to get 'polish'. My ex refused to work, so I was stuck providing for the family on a female wage - one manager told me to 'let my husband take care of me' when he retrenched me.

I have never experienced the life that so-called boomers are supposed to have had - employment was always hard to get and uncertain, houses were impossible to buy as banks wouldn't lend to women unless they had worked for the same company for a long time and had a very large deposit, and job opportunities and wages were always inferior to those offered to men with the same or lesser qualifications and experience.

I might not get things right, but I have been increasingly concerned about the environment since the 70s, and just like the millennials, I'll be working in casual jobs and renting until the day I die.

Non-Boomer
November 14, 2019

current economic policy also perpetuates this bubbling asset prices to the asset rich. short sighted and selfish economic policy.

Non-Boomer
November 14, 2019

There's no value in complaining about things you can't change, get on with your life and do your best.

Non-Boomer
November 14, 2019

They could afford a mortgage on a minimum wage job, yet mortgages for two-wage families are getting more and more difficult. They had access to free or very cheap health and education, including higher education, and each year students are increasing their debt just to get into the market, let alone be competitive. I have to constantly study (time & money) just to stay relevant whereas they could remain in the same, stable employment for decades. Boomers had the benefit of a strong community and we get to live in splintered and fractured times.

Peter Bayley
November 14, 2019

As a young boomer we grew up with more dangerous diseases, could only afford a few clothes, rarely could afford to buy a record, got a mortgage but had no money for holidays, going out for meals and coffees, never had a new car until I was 50, etc. it was not an easy ride as you may think. Try 19% home loan interest rates and high unemployment in the 1980s and again in the 1990s.

Non-Boomer
November 14, 2019

Every parent and grandparent hopes to pass on assets to the next generation in time of their choosing but many assist financially along the way. Stop complaining Generation X Y Z or whatever. Your time will come.

Non-Boomer
November 14, 2019

Boomers captured the benefit of a historically a favourable allocation of GDP towards labour (vs capital), which, together with the economic upswing following the world wars allowed them to accumulate wealth. As boomers have gathered assets / wealth of their own, they have benefited as the allocation of GDP between labour and capital swung back in favour of capital, to the point now that asset rich older generations are (I think?) capturing a historically high proportion of GDP.

Non-Boomer
November 14, 2019

My parents are boomers, but the younger generation are complaining while standing on a platform that has been provided to them through the hard work of the boomer generation. Boomer kids grew up poor which gave them a different appreciation for hard work and money. It's an attitude to be admired and learnt from rather than criticised.

Non-Boomer
November 14, 2019

The weight of numbers have dictated the election outcomes

Non-Boomer
November 14, 2019

The world may be changing and mind-sets/perspectives may be different but the world will be a better place if there are people who are respectful of others, seek to understand another's point of view and form their views on climate change by looking at all the data/science available.

Non-Boomer
November 14, 2019

I was born 1965. Being grey haired and balding, everyone just assumes, and lumps me on the other side of that arbitrary year line (I do not identify as Gen X either). Having fixed, selfish, backward-looking ideas is not a function of birth year, you don't have to be a bunch of grumpy, old, selfish, Luddite men and supplicant, dutiful women.
Shake it up Boomers.

Boomer
November 14, 2019

We had an advantage over the previous generation that grew up during depression and WW2. We (or at least I) grew up in the austerity of post war Europe, experienced the long period of 'stagflation' and had to work extraordinary hard to get where I am at now - buying my first home at age 51. Hardly any holidays for 20 years... typical immigrant story perhaps, and yes, now 70 years old I am well off, but at a cost! My kids have it a lot easier, even though the challenges are different. Traveling the world, luxury and so on. The concept of deferred gratification seems to be alien to many of the present generation.

Boomer
November 14, 2019

Boomers never had the convenience of smart phones, social media, the wealth of knowledge from the internet, etc

Boomer
November 14, 2019

Our generation had much more racial and gender prejudice

Boomer
November 14, 2019

The ability to buy a house at 3-4 times salary was a great advantage in 1990s now it would be closer to 10... but every generation has an advantage over the next... I'm sure health etc will be substantially improved as time goes by ...

Boomer
November 14, 2019

We were particularly blessed with free tertiary education.

Boomer
November 14, 2019

We have had a good run but as a result we are able to assist the next generation way more than we got helped. But that is our job.

Boomer
November 14, 2019

Sure have paved the way for the following generations in many positive ways but the sheer number means they have too much political, economic and social power.
For now though, they represent a massive economic opportunity as they age, retire and die.
Call to nextgen: 'make hay while the sun shines'. (Although they probably have no idea what that expression means.)

Boomer
November 14, 2019

The economic growth post WW2 favoured Boomers only as far as those born during the Depression didn't have the same opportunity. The subsequent generations have had similarly good opportunities to Boomers, but the opportunities have been different.

Boomer
November 14, 2019

we had nothing given to us. it was hard work and determination that allowed us to succeed. there were no expectations other than to get a good education and find your way in the world.

Boomer
November 14, 2019

Every generation has its advantages. Remember washing clothes by hand and writing letters. No mobile phone, internet, bank loans with zero equity etc etc.

Boomer
November 14, 2019

1/A good start to a better financial future is spending less than you earn.
2/Stop whingeing and get on with it.

Not Boomer
November 14, 2019

Oh ok boomer.
https://www.buzzfeednews.com/article/annehelenpetersen/millennials-burnout-generation-debt-work

Boomer
November 14, 2019

Graham, Graham, Graham after editing so much commentary on the franking credits proposal of the ALP ahead of the last election you should know better than to call it a 'benefit' to the Boomers. The benefit, if there is one, is zero tax on much of the retirement income. Franking credits are just very good policy implemented fairly - and they apply to anyone who has low taxable income, so all those gen x and gen y folk who are not yet earning much should get on board!

Dian
November 14, 2019

Boomer
My husband was a tradesman. I did not finish high school. We started our own business at 25 in 1980. Now married 45 years and retired. We have lived through 4 recessions and the GFC! We worked our butts off! Now our only child (a millennial) has just been gifted from us the 20% deposit she needed for her first home. We never received anything but wisdom from our parents!
Our daughter has 2 degrees and a great public service job.
Yes, I agree that Climate Change will be her greatest challenge, but her generation has the education, and hopefully the work ethic to deal with this, passed on to them by their Boomer parents!

Paul Salmon
November 14, 2019

Great Writing Graham. My wife and I are 5 years too old to be boomers but identify as such. We did learn frugality. Pubs shut at 6pm rather than at 2am. We took lunch to work, had Commonwealth Scholarships to University and did not buy takeaway coffees. We did not have the sense of entitlement to want our first house in a beach side suburb. We also experienced the tail end of rationing at the end of the war. We feel we are much tougher than our kids and grand kids who we are able to financially support because of our ingrained savings habits and and we know we are not alone here.

Steve
November 14, 2019

In the interests of thoroughness how about some balance. OK the older generation has done well, largely due to the fall in interest rates over the last 25 years and the mathematical certainty of compounding of many years. This is the number one reason asset prices have climbed - because they are more affordable (affordability should be a key metric here). Older generations also faced (a) higher risk of unemployment (a wealth destroyer par excellence), (b) higher marginal tax rates (less take home pay to build a deposit), (c) higher interest rates, (d) much less childcare support (so loss of one income in many cases), (e) higher cost of living for imported goods from high tariffs pre free-trade. And they had less years to accumulate wealth via super. I also abhor the examples of "six people with over $100 MM in super" as if that means anything to the population as a whole - you don't take the massive outlier as the basis of a policy argument, that's primary school debating at its worst.

Boomer
November 14, 2019

I have enjoyed the benefits/advantages that my parents fought and wished for. My kids go forth with my hopes that they will also enjoy benefits/advantages to which I aspire for them.

Boomer
November 14, 2019

We've had good times and there were lots of us so we easily created our own "era" and are still dominating the decision process.

Boomer
November 14, 2019

Didn't travel til 45
First 12sq home scrapped and saved to build in the outer suburbs
Boomers only crime is allowing our children to have it so easy
The easier they have it the more entitled the become
I'll never apologise for living within my means and planning ahead

Boomer
November 14, 2019

I bought land in 1978 for 13K and built as 4 bedroom home with fences and driveway for 28K. I was earning
about $25K pa so this investment was about 18 months of gross wages. I now earn about 150K pa or 225K in 18 mths. Comparably the avg cost today (say 1-1.2m in same area of Sydney) is 4 to 5 times what I earn in 18mths.

Boomer
November 14, 2019

The indulgent spending patterns of the young (largely debt funded) are the curse of their generation/s .Some degree of restraint is crucial in mid life .No debt by retirement age is the only mantra.

Boomer
November 14, 2019

We dealt with interest rates in the high teens to low twenties. We knew the difference between wants and needs and tailored our budgets accordingly. No credit cards or after pay. We had to prepare to support ourselves for retirement, paid higher tax in the hope of getting a pension if needed. Didn’t get Family Benefit A to Z or any of the other benefits handed out now. A different mindset. Now we are getting about 1% interest on any savings and many will end up on the pension. This is not beneficial to the economy. Every generation has its struggles, but the boomers cannot be held accountable for every problem the younger generation encounters.

Boomer
November 14, 2019

Don't forget I paid 30% tax on my super contributions (Division 293). And more tax on earnings and capital gains during accumulation phase. So why should I pay tax again on my heard-earned savings when I eventually start drawing down?

Geoff Larsen
November 14, 2019

"Already, the 27% of Australians who are over 50 hold half the wealth, and ASIC estimates 65% of the almost $3 trillion in super is held by fund members over 50"

What would anyone expect? For most of us, when we start out we have no wealth. We build up our wealth over time and max out when we finish our working life.

Comparing wealth held between generations is a futile exercise.

"The younger generations include our children and grandchildren."

What great insight. Any article which attempts to pit generation against generation I find obnoxious and will publically call them out. Simply because I think this is a wasted, doomed, exercise. This is one of the better articles.

Our family, grandparents, children and grandchildren, support each other; emotionally and financially. Just as our parents supported us. That's what successful families do. We helped our children get a leg in the Sydney property market and since then have shared wealth bequeathed from our generation,

Paul
November 17, 2019

Here Here! It is so easy to write divisive articles such as this Graham Hand which gets everyone off side. About time we all worked together and showed more compassion between all generations.

Michael
November 14, 2019

As Graham Hand said, the article makes wide sweeping generalisations. My partner have 17 siblings born between late 1940's and late 1960's. only one has more then one house and seven do not own a house. However, of the nephew's and niece's born in the 1970's and early 1980's one has 12 house's, one has 8 house's and another has five house's with a number of others having two house's. So my opinion is it is not how young or old you are, its being in a position to take advantage of the opportunities when they come along.

Boomer
November 14, 2019

As an older boomer, I had to leave school (my father died when I was 15); the most you could hope for to help with tertiary education was a Commonwealth Scholarship, which paid costs only. My mother needed my income and the university fees prohibitive. My husband left school at year 10 and went to "night school" while working full time. It was great that I had no problem getting full time work, but my preference would have been to continue my education with help and part time work (rarely available). I married young and had children, as most of us did. We were able to afford a mortgage on 1 income (a plus) with penny pinching undreamed of today. We could never afford a coffee out, just fish and chips once a week. Just as well I didn't have to work: child care was unheard of, no workplace would have thought of allowing my middle management husband to have leave from work to help. The biggest advantage we had was that we've learnt to be frugal and how to be self reliant. Yes, we now own our own home, but in our early 70's are still working and expect to keep on doing so.

Rob
November 14, 2019

I think this comment details my own situation pretty well (late boomer, male) and my parents also. In dollar terms house prices were low, but in real terms vs the salary of the day they were still quite high. Further education was a bit of a joke really and not many of my peers ever went to uni. We all got jobs, bought houses, brought up families with little or no leftover money for treats or holidays. It wasn't all roses.

Boomer
November 14, 2019

But with problems comes the opportunity to solve those problems which is the opportunity :)

Boomer
November 14, 2019

Every situation has its advantages and disadvantages. Same half glass of water - some see as half full and some see as half empty.

Boomer
November 14, 2019

Good opportunities and an ethos of hard work has seen many of us have a good life.

Non-Boomer
November 14, 2019

Boomers have had it exceptionally well. House prices in most capital cities were affordable (even at 17% interest which is one of their retorts and only lasted for a few years), free tertiary education, no need for private health care, unprecedented economic growth. They have had it very well.

Non-Boomer
November 14, 2019

"Duh. Free university (at least for a period), free health care, excellent infrastructure, affordable housing, economic boom before the environmental constraints started to bite, solid social safety net........ Yet over the last 30-40 years, even though Australia is richer than it has ever been, good and open public education and health is unaffordable according to the very people that benefited most from it.

Yes, boomers had the cold war and the threat of nuclear Armageddon, but as the US and Russia didn't start a nuclear war it was a threat that never materialised, whereas climate change is materialising before our eyes and will only get worse.
While I wouldn't generalise a whole generation, the reality remains that many of the great challenges we face today have been known about for decades and yet the leaders over that period, who have mostly been boomers, have not risen to the challenge and may be the first generation to leave society (world wars aside) and the planet in significantly worse shape then when they inherited it."

Boomer
November 14, 2019

The super system has given some of us the opportunity to accumulate a fairly substantial amount but for many boomers, the fact that they entered the system at a time when concessional contributions were at the low end, and salaries were comparatively small, means they don't have that much to fall back on. As for free tertiary education, let's not forget that many of us supported our kids through their Uni years when it was no longer free. Let's also not forget the fact that while growing our wealth, some of us paid high tax rates so it wasn't all happiness and light. We had high mortgage interest rates to contend with but I acknowledge that one of the issues now for Millennials is that the quantum of the deposit is daunting,

Boomer
November 14, 2019

There was a work ethic which included saving for later in life during these years that seems to be missing from this current generation

Boomer
November 14, 2019

You say we had it good 17.5% to pay off a mortgage on $400 a week super did not start till the 90s there was not a lot left to put in extra till late on missing out on compounding not much in way of family assistance no child care no tax break against school costs and who can tell what the next 30yrs will be like?

Boomer
November 14, 2019

Free university education, no tax on pensions, tax exempt house

Boomer
November 14, 2019

However there was no first home grant, no child lump sum payment, high mortgage interest rates and very little equality between the genders - women like me were often overlooked and underpaid in favour of a man

Boomer
November 14, 2019

Early boomers had greater good fortune than later boomers - eg super cheap but clapped out inner city housing up to about 1980 and full employment in the same period. Later boomers still had it good but not the same windfall advantages

Boomer
November 14, 2019

Everybody at a young age should self educate and plan for the future with their super and finances. We all have the opportunity no matter what generation to work hard and save.

Boomer
November 14, 2019

Access to education, communication, and global markets is far better now

Steve from the classic year of '62
November 14, 2019

Yes it seems the obvious maths isn't so obvious. Older people will always have more assets as they have put a lifetime of saving aside. Asset prices are largely impacted by interest rates; lowest interest rates in 5000 years (OK a bit of a stretch) and no surprise people borrow more and bid up prices (mainly the gen X, Y & Z's outbidding each other I suspect). And when the oldies eventually and inevitably shuffle off where will their vast remaining assets end up? Won't be as many complaints when the inheritances start to come through.........Patience might eventually be rewarded..

Emma
November 14, 2019

Oh man, this article is brave! I worry it will increase the generational divides when I have spent the last 5 years trying to make peace with my jealousy of the Boomers ?? But hopefully, we can pull together for the sake of our children and their children.

Pauline
November 14, 2019

Graham, what exactly is the point of this article? As a retired 'baby boomer', I am very tired of reading articles like this pointing out how advantaged us lot have been and how disadvantaged are the younger generations. Are you trying to make us feel guilty? Well I don't. Every generation has its ups and downs, it’s advantages and disadvantages. I could write about all the advantages that the younger generations have had that we never had, which others have also written about, but what is no point? Where does it get you, this envy of others? It is futile comparing yourself with other generations or indeed other people. We all have our financial problems along the way. Better to get on with your own life, work hard and take advantage of the opportunities that do come your way, rather than sitting back and grousing about injustices, perceived or otherwise.

Alex Denham
November 14, 2019

Bravo Boomer! A brave display of Boomer humility. There does seem to be a whole lot more talk lately around asset testing part of the home... just in time for us Gen Xers to retire, you can be sure of that! :)

Non-Boomer
November 14, 2019

I am born in 1969 and DO NOT identify with my generational "traits"

James - born in 1984
November 14, 2019

Grabs the popcorn for this comment section - so far 4 out of 5 commenters are open to an OK boomer reply.
Great article Graham.

Boomer
November 14, 2019

But not all have. People prepared to have a go have in a large part benefitted. However, some have not taken advantage of the good times whether from circumstance or poor financial decisions.

Boomer
November 14, 2019

"Tax breaks in particular. However, I am right on the cusp (1964) and don't regard myself as a Boomer - completely different attitude to life. For we younger ""so called"" Boomers, life was getting harder just as we left university and went into the work force. We had higher house prices and a recession to deal with as we tried to get established.
But I could see life was harder still for those younger than ourselves, with the ridiculous full fee university courses and house prices even steeper than what we have encountered, and frankly selfish Boomers taking every perk the government doled out to them as if it was a birthright. The recent uncapped franking credits fiasco is the most recent example. The problem for society with full HECS, impossible house prices and full taxation for the younger generations, coupled with ridiculous tax breaks for the Boomers and older generations, is that the younger generations quite rightly feel that they owe society nothing."

Boomer
November 14, 2019

Few wars. Improvements in living standards, free university education, good fearless public servants, some visionary politicians, more agreed upon civic values

Boomer
November 14, 2019

Good free public education, low unemployment and full-time employment, no world war, cheap housing loans

Non-Boomer
November 14, 2019

Current Generation of Gen Y and X etc have never had it so good....the last Australian recession was in 1991 so most 18-30 year olds have never seen economic hardship. As such most people in this age group are privileged and entitled. However the truth is they are emotionally weak and have no capacity to deal with any kind of adversity.

Chris
November 21, 2019

And boomers AREN'T entitled ? All that I seem to hear from them is that "I paid taxes all me life (sic), the government should look after me". How about "no" ? How about saving for your own retirement ?

When Gen-X retire, there won't BE a pension. If there is, you won't want it because it will be poverty line wages and you won't qualify because your house (if you own one) will be well over $1M by then and they'll means test you, including the home. Watch.

Non-Boomer
November 14, 2019

I'm not a boomer but we shouldn't forget that most of us have had it good. Fewer major wars, an economy powered by migration, open trading policies and falling interest rates for 30 years along with massive advances in technology have benefited (almost) everyone. Some of the boomers have received out-sized benefits, but many haven't.

Non-Boomer
November 14, 2019

It is more the way non-Boomers have a different expectation of how they spend their money - they are more consumable focussed, and live for now, rather than thinking about the future. Non-Boombers have also not known the hardship that comes with recessions, not having lived through one. You also have to consider that someone like me (b.1968) and my wife (b.1976) have a fair age gap, which also affects considerably how our future plans have to be dealt with. Generalisations are good, but the individual cases can be significantly different from what is presented as middle of the road.

Non-Boomer
November 14, 2019

We must move from an attitude of entitlement to eligibility

Boomer
November 14, 2019

It’s all about attitude. Eg cup half full v cup half empty. Baby boomers have wet nursed later generations who often take responsibility for nothing, are lazy, and like to blame others. (It’s not all of them though)

Boomer
November 14, 2019

Opportunities have nothing to do with the generation and what people of all (age) generations in any economic cycle do with opportunities: grasp them, ignore them, worry about them - or, just get on with life and make the best of it.

Boomer
November 14, 2019

It's true we had certain advantages over the previous depression and wartime generations. However, the modern human has the advantages of everything built by those that went before. Including tech.

Gen Y
November 14, 2019

Graham you are playing with fire. This forum has one of the greatest OK Boomer senses of entitlement I have ever come across. Good luck!

Non-Boomer
November 14, 2019

Until intergen wealth transfer evens things out a bit!

Boomer
November 14, 2019

The children of Baby Boomers will inherit much more $ on average than baby boomers do from their parents!

Gen Y
November 15, 2019

By the time that happens we will have slogged out raising a family in a house that is too small, we'll have spent our whole working lives commuting long distances and we'll have paid half our wages in tax in order to fund the Boomers' tax free retirements & rising health care costs.

Tony Culberg
November 17, 2019

Gen Y needs to look at Australian Tax tables. At 2.5 times average weekly earnings (AWE), that is $200,000 taxable income, average income tax is still only 33%. And 80% of all in the workforce is on less than AWE...
Commuting is part of the price paid for wanting a larger house. Life is a compromise. It is a matter of sorting your various wants into the order you are prepared to work for.
BUT, tax rebates like Senior Australians and Pensioners Tax Offset are a gross distortion, and were purely a vote grabbing ploy by John Howard, as were tax free superannuation pensions. I suspect that there is no constitutional authority for giving older Australians a free ride. Perhaps some younger taxpayers might run the case to the High Court, trying to find which section of the Constitution supports such discrimination.

Julian King
November 13, 2019

Of course older people have more wealth and assets - it’s a simple function of time. Being invested in property and shares for 40 or 50 years will do that. But what 80 yo millionaire wouldn’t give to be a penniless 20 yo?

Mart
November 14, 2019

Graham - in my view probably the best, most informative article you've written. Julian's comment is correct - time / compounding matter hugely. As a boomer I'm in agreement with you but (like you) I can recall tough times at the start of my journey (tiny flat in way outer London, no furniture, mortgage took 90% of earnings etc) but eventually you can move up the ladder. The key to all of this is save some of what you earn and invest it prudently - do that for 20, 30, 40 years and you'll be OK. I have great hope for the current generation in this respect as they seem far more savvy that I ever was at their age (FIRE, debit not credit cards, auto invest robo ETFs, fintechs like Raiz and Finder - to name but two - to assist and provide great advice). However there aint no substitute for time - do all this stuff for long periods consistently and you'll be OK


 

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