Don't Blame the Baby Boomers for Getting on With Life
Just before the Budget, the authoritative but little-known Parliamentary Budget Office issued some illuminating and non-partisan research into the costs of our ageing population.
And while these reports are manna from heaven for pundits, policy wonks and think tanks to put their own spin on there’s also plenty of food for thought for us lesser mortals i.e. those they are talking about.
But beware arguments over allegedly over-generous superannuation tax concessions, the family home being exempt from the pension assets test are other so-called inequities are sure to resurface.
It’s called ‘boomer blaming’ and as this piece in The Conversation spells out it, it does the younger generation no favours to blame their parents for any perceived injustices but it will not stop them.
Over the next ten years the impact of the baby boomer generation retiring will have some real effects on the economy by reducing income tax revenue and increasing spending of health care, the aged pension and aged care.
With fewer of us working and paying income tax, revenues will reduce by $20billion while the costs of servicing older Australians will increase by $16 billion.
“In real dollar terms, this equates to an annual cost to the budget of around $36 billion by 2028–29. This is larger than the projected cost of Medicare in that same year,” says the report.
The effects of this ageing on workforce participation and the age pension is already being felt but will peak over the next ten years although some of the ageing is offset by high arrival rates of younger migrants.
The report also warns the impact on health and aged care will be more gradual as these services are needed most as the boomers reach their 70s and 80s.
A regular intergenerational report looks at ageing over the long term, such as 40 years, but this budget office work is more focused on the next decade which it terms as a ‘particularly significant phase of demographic change.’
The demographers amongst you can soak up all the detail here but needless to say some of the findings have been used to stoke up the embers of the so-called war between the boomers and millennials.
John Daley, who features on our superannuation podcast (listen here) and his cohorts from the Grattan Institute have largely been given a free kick in the media to focus on the costly downsides of this inevitable process
We who are the living heart of this demographic bubble or bulge or what ever else you care to call this phenomenon have a duty to live for as long and as in good health and wealth as is possible, but someone will have to pay.