Greedy, pampered Baby Boomers

I’m a baby boomer, born in that particularly fecund period after Word War II and before The Pill made its impact in the 1960s. As such, I’ve more than once been critical of articles in the news criticising me and my compatriots for the apparent largesse of government policy with regard to pension entitlements, health care and the like.

Quite regularly some journalist comes out with a click-worthy headline like this one from last week’s Australian: “Greedy and pampered, our boomers are more than OK” [source]. Wow. What a bunch of entitled bastards we are.

The comments were predictable. “I worked all my life, never got benefits for kids, sent my children to school without assistance, bought my house at interest rates around 17% …” etc etc. And all of that is true. I aired my thoughts on this mindset back in 2019 (before covid) in Baby Boomer Bashing.

It is also true that older Australians, living in homes they purchased often decades ago, have benefited (if that’s the right word) from the property boom insofar as the value of their property has skyrocketed. However, rather like buying shares, it’s only worth something if you sell it – although, of course, this journalist supports the notion that the value of the family home should be included in the assets test for a pension. But I found it particularly annoying that the tone of the headline, and the fact that property values have risen (making it harder for younger people to buy houses) is in some way our fault. Grasping? Greedy? I think that’s called ‘click bait’.

However, he does make some good points.

“If re-elected, the Prime Minister said his government would increase the singles income test threshold from $57,761 to around $90,000 from July to give more seniors access to the [health care] concession card. The couple’s threshold will also increase, from $92,416 to $144,000.”

That strikes me as an awful lot of income for people in retirement. I also think it’s unfair that seniors can earn more money before they have to pay income tax than other workers.

But then the vast majority of retirees don’t make anything like that sum, particularly at the moment with interest rates at an all time low (assuming their income comes from investments).

In fact, this whole article is written about a tiny subset of wealthy, retired Australians.

“Grattan Institute economic policy program director Brendan Coates says the Seniors Health Card has been extended to singles holding an average of $1m in financial ­assets (excluding their primary home) and to couples with an ­average of $1.56m in net wealth.”

Really? Peter and I consider ourselves comfortably retired but we don’t have anything like that net wealth. If that’s an average then there would have to be a few billionaires distorting the figure. I wonder what the mean would be?

What about the cohort of retired seniors, particularly single women, who had little or no superannuation? What about those who through whatever circumstances never owned their own home? Yes, it’s hard for younger people to find the money to buy a house or even these days to rent one. Try renting a house when you have to live on an aged pension. And you have to choose between eating or paying the electricity bill or paying the rent.

By all means limit the largesse offered to obviously already wealthy seniors. But don’t lump the rest of us in with them.

Now let’s talk about the ‘skyrocketing interest rates’ which is, apparently, Scott Morrison’s fault. The rate has risen from a rock bottom, all time low of 0.1% up to 0.35%. For those with poor eyesight, that’s still less than 1%. Excuse me while we baby boomers roll on the floor laughing (ROFL). When my then-partner and I were paying off our mortgage in the late 80s the rate was 18%. Sure, the amount borrowed wasn’t up there with today’s values but these things are relative. (See Baby Boomer Bashing).

For anyone who thinks interest rates are influenced by the incumbent government, the Reserve Bank of Australia sets the rates and it is an independent body. In other words, the fluctuations (or stagnation) in interest rates would have been the same regardless of which party is in control in Canberra.