John Menadue. Is there intergenerational theft?

Yes – there certainly is, but not in the ways that Tony Abbott and Joe Hockey suggest.

In his National Press Club speech on February 2, Tony Abbott said ‘Reducing the deficit is the fair thing to do because it ends the intergenerational theft against our children and grand-children.’

Joe Hockey has also been talking up issues of intergenerational theft in preparation for the release of the fourth Intergenerational Report (IGR).  He says we will ‘fall off our chairs’ when we see the numbers in the report. Apparently the government plans an advertising campaign to tell us how serious the problem is of our ageing population and the economic consequences.

Joe Hockey’s rhetoric is designed to resurrect his failed sound bite about debt and deficits. Unfortunately for him, the public is not listening to his message that the budget needs to be brought into balance. We have turned off because of his and Tony Abbott’s wild exaggeration on debt and deficits, and the obvious unfairness of his 2014 budget.

But we do have an intergenerational problem. There are several contributing factors.

The first and by far the most important is climate change. My generation is failing to take this problem seriously. Our failures will bring major problems, even calamity for our grand-children. Global warming has major impacts – rising temperatures, changes in rainfall patterns, drier and hotter summers, more bushfires, fewer but more destructive cyclones, rising sea levels, and destruction of icons like the Great Barrier Reef. This is an intergenerational threat on an enormous scale. The Abbott government has done less than almost any government in the developed world to address the Damocles sword of climate change that is hanging over our grand-children’s future. The Abbott government has dismantled almost every program to tackle climate change.

On the economic front the Abbott government has refused to tackle the issues that give privileges to older generations like mine.

Superannuation tax concessions cost the taxpayer about $32 billion p.a. and rising rapidly to almost $50 billion by 2017-18. This generous middle-class welfare benefits older generations. We don’t even have to pay tax on superannuation income once we turn 60. This is intergenerational theft. The Abbott government like its predecessors is dodging the issue. Vested interests in the superannuation sector and particularly the four major banks with their large superannuation subsidiaries are doing their best to protect the wealthy and the aged.  The unfair privileges for older Australians like me are being protected.

Older and wealthy people are putting their money into investor housing to get a tax advantage through negative gearing. The estimated tax loss of this is $7 billion p.a. Over 60% of bank loans for housing is for investor loans. Is it any surprise that first-home buyers – my grandchildren’s generation – are finding it extremely difficult to buy a house; something that my generation took for granted. A student asked the Reserve Bank Governor, Glen Stevens, at Club Central, Hurstville, ‘How am I ever going to afford a house?’.  We are engaging in intergenerational theft.

The discount on the Capital Gains Tax is largely at the expense of younger generations

Then there is the Abbott government’s proposal that we hear about so much from Christopher Pyne that will load up students with enormous debt in the future. Intergenerational theft!

The Abbott government proposes to penalise the unemployed, mainly young people, by denying them unemployment benefits for a period.

Now we learn that the government and the opposition are refusing to entertain any idea of including the home in the means test for the aged pension. Once again, the older generation like mine, will benefit, with many senior taxpayers with large and expensive mansions drawing the aged pension or aged pension concessions.

We do have a problem with the privileges that my generation enjoys. The scales are being steadily loaded against my grand-children’s generation.

Climate change is the most critical way in which we are refusing to acknowledge the rights of younger generations. We look like handing on to them a planet that is under serious threat.

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One Response to John Menadue. Is there intergenerational theft?

  1. Wayne McMIllan says:

    John, You are to be applauded for identifying this crucial issue, and giving it the attention it so rightly deserves. Climate change is going to affect generations to come and old economic thinking about Commonwealth budget deficits is a secondary concern.

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