An unholy war is brewing. The young and the old are being pitted against each other. Neoliberalism comes in many guises. But this strategy is at odds with how a civilised capitalism should treat people in the autumn of their lives.
Cormac McCarthy may well say the good thing about old age is that it does not last long. To a degree McCarthy is right. Old age lasts substantially longer than was once the case. But if one is caught in the eye of the storm the final years race.
Baby boomers know all about the brevity of the closing years. Barely a week passes without mortality being thrust in their face. A favourite pop star from their youth regularly turns up in the obituary column. Only Keith Richards or Iggy Pop seem to hang on and defy the long journey into night.
Now along with tracking the latest famous figure of their youth to pass (as it is euphemistically called) older Australians are confronting an age war. The issue of a looming fiscal crisis of the state has landed at their ageing door. As the personal income tax base is forced to carry an increasing share of state expenditure there is a growing campaign to get those in aged care facilities to bear a larger burden of the cost of their accommodation.
An unholy war is brewing. The young and the old are being pitted against each other. The cry that the scales are tilted against young taxpayers subsidising entitled retirees is gaining momentum. The campaign is being framed around the notion that young taxpayers are struggling with stagnating wages and high personal income taxes that make owning their own houses a distant dream. The subtext of the discourse is the elderly gained their houses in more propitious circumstances and now should increase their aged care contribution in order to take tax pressure off the young.
Neoliberalism comes in many guises. And the ploy of setting the young and old against one another on tax issues is straight from the copybook of neoliberalism. Senior Australians are being softened up to accept a redistribution policy that on the surface only curmudgeons would deny. Oldies are set to be the fall guys for some pie in the sky idea that the young would get tax relief if only the old would shoulder more of their cost. A levy or user pays system imposed on the elderly as they enter the portals of an aged care facility is to be sold as fiscally responsible and ethically justifiable.
This strategy is at odds with how a civilised capitalism should treat people in the autumn of their lives. It is the case that today it takes an average income earner more weeks salary to buy an average house than their peer in the 1960s, 1970s and 1980s. But what this omits is that the elderly did not live through some halcyon period where home ownership and the good life fell into their lap. By the mid-1960s the post-war boom was exhausted. Those entering the workforce at this stage confronted decades of economic austerity.
Starting in the late 1960s, rising unemployment and high levels of inflation kicked in and stagflation was endemic during the 1970s. This impacted on everybody. Consumer purchasing power fell and the incentive to invest collapsed. A profits squeeze that had its roots in the 1960s took hold. As the capital accumulation crisis bit, those who had been regarded as cranks during the golden years of the boom stepped into the limelight. Led by Friedman and Hayek, the torchbearers of neoliberalism introduced a brand of economics that was designed to restore profit rates. The welfare state was trimmed. Trade unions and collective bargaining were in the crosshairs. Corporate taxes were slashed, as was the personal tax of the ruling elite. Privatisation and deregulation were rampant. The share of Australian income and wealth held by the super-rich skyrocketed. Economic inequality soared. Profit rates were restored.
This is the reality of the turbulent economic climate experienced by the baby boomers. There was no Panglossian economic history for the bulk of workers. They had to struggle to garner deposits for houses and the cost of raising and educating children. The wives of baby boomers became employees in large numbers driven by the imperative of helping with the mortgage and household expenses. That some frugal and energetic souls garnered some assets and showed the spirit that Weber noted drove the development of capitalism should not lead to them being confronted with a price hike once the gate of an old folk’s home opens.
A creative social democratic government has plenty of other choices to confront any fiscal crisis. There is no need to resort to a levy on current working taxpayers to fund the increasing cost of aged care. When that idea is mooted, it needs to be dispelled as quickly as any levy imposed on the elderly. There are plenty of other options. The government can start by applying stiff taxes on multinationals. Windfall taxes in the resource sector are long overdue. The British Tories have recently introduced them. The risible level of corporation tax that is then whittled down to single digit figures by the machinations of accountants needs revamping. The diesel fuel rebate scheme that lines the pockets of largely foreign owned mining companies needs curbing. The Stage Three tax cuts can be abolished. A wealth tax on the super-rich could be applied and its benefit flow to aspiring young homeowners. Norway, Spain and Switzerland have wealth taxes. The concessional taxation of capital gains could be wound back as could tax concessions for negative gearing. A stringent inheritance tax applied to the new owners of the houses bequeathed by baby boomers biting the dust would put a floor under the curse of multigenerational wealth. Targeted tax measures could benefit young home hunters far more than any levy imposed on workers or aged care residents. Generous state subsidies for first home buyers could be accommodated by sensible and effective tax measures.
The baby boomers have been a disappointment. History will be tough on them. The failures were many. The 1968 Paris revolt and its global reverberations petered out. The consciousness raising inspired by the anti-war movements was lost. In Australia the hope offered by the counter cultural movement exhibited by young people going to places like Nimbin and setting up farming cooperatives fell apart.
The baby boomers lost their visionary spirit and settled for putting all their effort into supporting what Burke (the father of conservatism) called the “little platoons.” The family, in other words, became the epicentre of their lives. They meekly accepted the austerity mantra imposed by neoliberalism.
But this was the generation that built modern Australia, and the remaining members of the heads of little platoons should be treated with respect and dignity in their twilight years, and not be hit with a levy or user pays system as they enter aged care facilities. Aged care facilities should be sourced within the public sector and intergenerational battles over levies should be cremated.
Let the old go gentle into that good night.