Member Since: 11/27/2010
Posts: 9,806
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The Baby Boomer Supremacy & Cultural lockout
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Perhaps it is this very contrast, between the status of boomers and the younger generations, that makes bosses believe employees should be grateful simply for having a job, paid or not. But it also means that there must be something wrong with Gen Y. The level of full-time youth labour participation in Australia is lower today than it was a decade ago, by a difference of 10 percentage points. They must deserve it.
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The baby boomers have been the drivers of economic policy for decades. You can chart a kind of path through state spending, a path that begins with their birth between 1946 and 1964 and is ending now. The remaking of developed economies after the Second World War meant this generation’s rise coincided with the high-water mark of the welfare state. Beliefs about what government should provide and support – health care, education, unemployment benefits, and tax benefits – have reflected their priorities in a way that is more than coincidental: a governmental red carpet was rolled out in front of them. It is now being quietly rolled up in their wake.
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Somehow young workers need to be both agile and traditional, team players and self-motivating, in search of a good job and willing to work a job that isn’t paid at all. To be grateful, and, most importantly, to wait their turn.
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The experts’ predictions were stark. “There is a stunning generational unfairness in our [budget] settings and all those disengaged younger Australians need to wake up to the fact they’re being massively screwed by … what the baby boomers are leaving for them,” said Chris Richardson of Deloitte Access Economics. “Right now, we’re eating their future.”
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But the sheer numbers, wealth and cultural influence of the boomers have kept policies such as these in place long after their calamitous effects should have been recognised.
Negative gearing – allowing losses on rental properties to be tax deductible against an investor’s other income – has been the engine through which Australian property has become some of the most expensive in the world. It has been retained for decades, under the fig leaf that an attempt to wind it back in the 1980s led to increased rents. That was in Sydney and Perth only, and was likely the result of other factors. But this flimsy excuse has made it immovable.
In reality, the policy is just popular with the investor class, allowing property owners to avoid tax and push their equity higher at the same time. It has never meant lower rents or an increase in housing stock. Multiple properties have become the norm. “We’re seeing an older generation [that has] benefited from a combination of quite generous tax and welfare treatment and has also been in the right place at the right time as interest rates came down,” the economist John Daley told Lateline in June last year.
“Therefore asset prices rose and we have a quite wealthy older generation, indeed an older generation that’s much more wealthy today than people of that age, say, 20 years ago. And that’s the generation that’s got money now to invest in … investor housing.”
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