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Hey, what have you got against late 60s babies?

I was born at the end of 1969. A proud Gen Xer who just last week danced in the lounge room with my old school buddies to every 80s song we could think of, belting out the lyrics without missing a beat.

I love that I’m a late 60s baby, even if only just. It was a time of The Beatles, revolutions, Woodstock, the moon landing, the call to give peace a chance, women’s liberation, colour television, To Kill a Mockingbird. It was, in all, a very cool time to be born.

We are not the Baby Boomers, the rigid and hard-working, world-changing, now ageing generation that loves to spend their time judging and tsk-tsking the younger folk, mostly the Millenniums and Gen Ys for their narcissism, laziness and sense of entitlement.

We are not the Millenniums, who – like the Baby Boomers before them with whom they battle today – are intent on saving the world one online campaign (the Obama ‘Facebook election’) or viral meme (ALS ice bucket challenge) at a time. So what that they are too impatient to work up the ranks, they have other tools at their disposal, and they’re not afraid to use them.

With half as many Gen Xers as there are both Baby Boomers and Millenniums, our generation is characterised by being pragmatic and independent, adaptable to change, the latchkey children of divorced and working parents. Gen X doesn’t get involved in the ‘you think you’ve got it bad’ battle, we are too busy over-parenting our children to make up for our deprived and lonely childhoods (cue violins) and creating little companies like Google, Twitter and Amazon.

Why do we get hit with every adverse change?

And so it is with discomfort that I raise this whinge-fest observation. As pragmatic as my stereotype demands I be, 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.

First there was free university education. From 1974 to 1988, those sneaky Boomers (and the very early Gen Xers) enjoyed free university education for the only period in Australian history. That’s right, as the Baby Boomers entered their university years, for the first and only time in history it became free.

Then, just when I was leaving school, in comes HECs and the cost of university education has increased sharply since. Now I don’t disagree with HECs, it has its merits, however it was so perfectly timed to affect me. And of course, many of us will have children at university when the federal government’s contribution to degree costs will reduce, so if I want to pay for my 4 year old’s degree, I’d best get saving now.

Then there’s the First Home Owner Grant (FHOG) scheme introduced on 1 July 2000 to offset the effect of the GST on home ownership. When you’re scraping your pennies together to afford a deposit, mortgage insurance and stamp duty, $7,000 helps (the equivalent of $10,000 today). I was almost 31 at the time, and like many of my friends in their late 20s, had bought my first teeny tiny flat the year before at age 29. No FHOG for me, I bought too early. Millenniums enjoy!

(Yes, yes I know house prices now make it impossible for Millenniums to ever get in the market, I get that, but right now this is my rant.)

Cheap housing for us? Hardly. The Housing Price Index started its upswing in the late 80s (as the late 60s kids entered the workforce) and continues today. No cheap housing in sight for us – that was the Baby Boomers boom.

I waited and waited for paid maternity leave until, at the ripe old age of 40, I caved and had my first and only child in 2010 (ok, I admit that wasn’t what I was waiting for). Less than a year later, on 1 January 2011, in came Australia’s first national Paid Parental Leave scheme. Missed out by a whisker again, all yours Millenniums!

And what’s yet to come?

Now in our mid 40s (ugh), we slowly turn our minds to the possibility that retirement is somewhere on the distant horizon. Of course, I can’t get to my superannuation benefits until age 60 where my Baby Boomer friends are accessing theirs at 55, and now my Age Pension age has gone up to 70, with the real value of future Age Pension payments set to reduce by the changing indexation.

It had to happen, but here are we late 60s kids once again taking one for the team. Good heavens, is this personal?! Am I just imagining this pattern of policy changes directly aimed at hitting us?

Ok, compulsory super came in reasonably early in our working lives, I’ll acknowledge that, and it’s been a good thing. There’s no way I’d have had the discipline to put into it what I have now – home ownership, school fees and holidays are much more fun.

But Super Guarantee started in 1992 at a measly 3% of salary, and it wasn’t at a 9% rate until 2002, by which time I’d already been working in some form or another for 15 years. It’s the Millenniums (and later the Alphas) who will reap the full benefit of the Superannuation Guarantee system.

Australia’s superannuation system is currently remarkably generous and flexible. Payments from super are tax-free for anyone over 60, and there’s no restriction as to how it is taken. No compulsory pension, once it’s released you can do whatever you like with it. There’s always pressure on the government of the day to attack this.

“Tax haven for the wealthy!”, “Middle class welfare!”, “Inequitable and unsustainable!”

You can bet - knowing my luck - that as those pesky, over-populated Baby Boomers swamp the age pension system by blowing their tax-free super benefits on holidays and their huge houses they refuse to sell, in will come compulsory lifetime pensions or annuities, capital gains tax on assets backing super pensions, caps on tax concessional superannuation benefits, the end of dividend imputation, the return of death duties and who knows what else.

You watch, it will happen. And these new measures will come into effect somewhere around 2030 just as – you guessed it – we late 60s kids retire.

Just saying.

 

Alex Denham was Head of Technical Services at Challenger Financial Services and she is now Senior Adviser at Dartnall Advisers.

13 Comments
Jan
February 07, 2020

There is definitely a huge difference in the lifestyle advantages of those who live in the capital cities and those who live in the rural/regional areas. It amazes me that while the tax rates apply to all Australians wherever they live, country people have to put up with inferior services and infrastructure. example: access to health specialists is a mere three or four hours' drive away (one way); tertiary education several hours away (although some courses are now online); roads falling apart'; little or no public transport and higher fuel and food prices; fewer professional job opportunities and inferior, slow, NBN, and many mobile blackspots. Yet, it is generally accepted that if you live in the country you should expect lower service levels. If that is so, then it is perfectly reasonable for country people to pay a lower rate of taxes to reflect this. Otherwise, they deserve the same level of services and infrastructure as city people.

David F
December 21, 2017

An excellent and accurate rant...and yes I do wonder what new and exciting policies the govt will try....

Ramani
March 26, 2015

Alex's explanation of analysing the position in the Australian, rather than the considerably worse global context, makes sense. Those in born the 1960s may well have a legitimate gripe, as do many others: the self-employed ignored by SG, those earning less than the threshold $450 pm and all accumulation-type members who scarcely comprehend the risks the system expects them to manage. Her 'vent', as she puts it, is useful to the debate in improving our relatively good system.

What I did was put it in a larger context that is necessary, while acknowledging her valid points, reaching a contrary conclusion or at least minimising its thrust. Left presumed and therefore unsaid is the looming plight of the party picking up the demands of vocal lobbies (including those born in the sixties): the taxpayer - already funding the unfunded age pension through a virtual mortgage on the unborn.

Amery's rejoinder (also helpful, if only as a contrary pointer to what one should avoid) about the fallacy of my larger context, if valid, would rule out every attempt by Australians (or indeed others) to learn off, and grow with, larger world phenomena. Toxic: if tomorrow an unknown nation discovers a cure for leukemia, by this logic, we would reject it as a fallacy - 'well, not our cure'. If in this interconnected world, we do not to connect the dots, as Amery would rather exhort, we risk becoming unhinged. Taken to its extreme, Amery posits a Rip Van Winkle world, that would begin and end with the person's bed(room)!

As Amery rightly divined, yes by personal profile, I am a boomer (like him, also prone to periodical bloomers). But unlike the average boomer he contemplates, as a mature-age migrant I had to fund my degrees in India and actuarial studies in the UK, and had a measly Provident Fund for half my working life, which virtually vanished during the exchange conversion (not to mention exchange control). The perils of ignoring dispersion around the mean, as we statisticians warn...!

Ramani
October 31, 2014

As the chap was moaning about not having a nice pair of shoes, he stopped, gasping mid-sentence. He had just noticed a man limping across on crutches without a working pair of legs.

There is something about us humans which makes it axiomatic that our good fortune is perceived as the result of our great effort, while the mishaps are someone else's fault. Behavioural psychology makes us prone to forget the times our trains arrive just as we hit the platform, while the occasions we have to wait a few minutes are forever etched in memory.

Add to this the social imperative to 'belong' to real or imaginary groups: nations, professions, races, generations, - Alex's views fall into perspective.

Much of what she says is founded on truth and personal experience, affected by irreducible personal bias. It is painted on a first-world Australian canvas. To ensure adherence to the edict 'change what you can, accept what you can't and learn to know the difference', a more global setting should help. Juxtapose it against Bangladesh prone to the 'unprecedented' ritual of annual flooding of Brahmaputra; the orphaned kids of HIV; the landmined Cambodian teenagers; the victims of recurrent religious toxicity, ISIS being just the latest; the extraordinarily renditioned collateral damage; Maldives residents serving tourists while the sea inundates them inch by horrible inch. In the aftermath of schadenfreude, we feel relief wafting through our innards.

When my first daughter (she is 37 now) complained at age 9 that her younger sister was privy to luxuries such as air travel she never had at age 5, the younger one retorted: 'But you had much younger dad and mum!' QED.

Perspective. Or in the words of oriental wisdom, 'this too shall pass'. If a whinge is the price of therapeutically letting off steam, whinge on!

Alex Denham
November 10, 2014

Touche Ramani!

In the context of comparison between Australian generations (and in fact it goes more micro than that), I stand by my rant.

Of course I would never consider myself unfortunate in a world context. I am indeed a very lucky person to be an Australian... it's just that the Baby Boomers appear to be even luckier.

The rise and rise of the internet provides us with - if nothing else - an excellent platform for a self-indulgent whinge. Thanks for being an audience to my vent!

Bob Amery
March 24, 2015

Love your work, Alex.

And in reply to Ramani - let me guess, you're a Boomer?

Either way, making a 'first world problems' argument is a classic fallacious tactic to distract from the core point, which was that Boomers have had a magical run and the cost of the profligacy enjoyed by their generation is being paid by Gen X-ers, then Gen Y-ers and the Millenials.

The intellectual bankruptcy of this style of argument is made apparent by transferring it to, say, gender inequality. Do you also believe that Australian female executives should get some perspective because at least they're permitted to be educated?

Craig
October 31, 2014

Absolutely agree. I once heard the comment that the "welfare state" has proven to be a form of wealth redistribution between the generations.

The baby boomers got free education, they got access to the aged pension (which was generously indexed) after early access to their superannuation, they get tax free access to their superannuation. This also ignores that conveniently the housing market soared for them, making it extremely difficult for future generations.

It seems that it is more that because baby boomers were so numerous, and often had the luxury of time as well, they organised to get various benefits which were often unrealistic in the long term (like tax free access to super once you're over 60, no matter how much you have) and that finally, when it is really clear that it can't be maintained (which is around the time we show up) then "Sorry, empty!"

Chris
October 29, 2014

I can’t help but feel that as a 37yo, despite my best intentions to provide for myself by holding assets inside of and outside of super (I will be a REAL self-funded retiree, unlike the boomers who think they are and still claim a part-pension) whilst paying 16% in (9.5% plus 5.5% salary sacrifice) but the Government will look at your super balance (likely to be well over a million) and then say “oh, you’re a “millionaire”, you’re rich, you don’t get anything from us.

It is a cliché, but being a millionaire when we retire will buy a whole lot less, thanks to inflation, and it won’t be such a glowing term then. Hell, I could be a billionaire / trillionaire if I was in Zimbabwe !

That’s IF I get chance to access my super, but I don’t think they won’t change the goalposts before then.

And those saying “eeeh, I paid taxes all me life”, well, do you not use hospitals or roads, or airports, or anything else ? The amount you paid in taxes is nowhere near what you use over your lives.

Tortoise
October 25, 2014

'72. I'm hearing ya!

But it has made us resourceful, flexible, patient, willing and able.

Some of the things I feel the younger generations will not learn.

Alison
October 24, 2014

Excellent article! All of this has also applied to me with the additional items:

Do not have children, so have never claimed a tax benefit or received any benefit

Have never claimed the dole or any other govt benefit, have always supported myself

Have paid off my townhouse with absolutely no assistance from home buying schemes etc

Am building up a super account to pay for my retirement

At this stage I predict when I retire I will not have received any benefit from the govt, paid tax my entire life so others can be paid all of those benefits, and will have to fund my own retirement without the pension.

Just love paying out for others benefits my whole life and not being eligible for a single one of them!

A 60s baby, a responsible adult who works hard, lives within my means, plans for the future - and get nothing from the govt - just the honor of supporting others who don't live the same way.

Not fair!!! Not happy!!

Simon
October 24, 2014

Noticed this too and thought I was being paranoid... If I stay healthy and go early, maybe I can auction my internal organs to help my child with a home deposit. 1967.

Shawn
October 24, 2014

Nice rant Alex. I am a 69 Taurus, and I can relate to all the things you say.
However I personally feel fortunate that the last 15 years of work has been very exciting and lucrative with the Mining Construction boom, where i have been blessed to earn more money and pay more tax than if i worked in finance.
Now that it's all over I wonder what I am going to do to keep myself occupied for another 25yrs as 70 is the new retirement age. I have managed to deal with all the obstacles that have been placed in our way, now it's time to think about what I want to do to keep me going til 70 as my current work is not where I want to be and i am not rich enough to retire yet.

Julie
October 24, 2014

Here here, Alex, what is it about the late 60s that gets up people's (govt's) noses?

The age at which we can access the aged pension went from 60 at the start of our working life, to 65 then to 67 and now, if the current Fed govt has it's way, 70. No other age group has had it's end goalposts repeatedly shifted as much as ours.

We have also had the age at which we can access our super shift from 55 to 60 while the widow's pension became an allowance (and most women had no choice but to find a job, even if they had never worked in their entire lives). And if you partner is born after 1972, no more claiming them as a dependent.

I am happy to take an active interest in my financially securing my future. But it just gets harder every time the rules change. If the govt fiddles with the future yet again, they risk a backlash as people give up their retirement plans as it's "just too hard". Be careful what you wish for......

 

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