Fairfax’s Ross Gittins has nicely summed-up how the older generations are screwing over the young, and why our politicians are only too willing to oblige them:
…most young people have only a vague inkling of the extent to which successive governments have been screwing them.
The pollies’ problem is that they’d love to please everyone, but don’t have sufficient resources…
The people who pay most attention are the oldies – whose number is being swelled by the retiring Baby Boomers…
[Housing is] the most topical instance in which governments are allowing the old to screw the young…
Both sides of politics believe in high levels of immigration, but haven’t bothered to ensure sufficient additional homes are being built to accommodate the growing population…
But distortions in our tax laws – distortions other countries long ago corrected – are adding unnecessarily to the demand for houses by making them a tax-preferred form of investment. This is “negative gearing”, which means first home buyers are having to compete against well-established older investors with a lot more collateral.
It wouldn’t be a problem if negatively geared investors were adding as much to supply as they are to demand, but they prefer buying established homes…
[But] pollies are much more afraid of the anger they’d arouse among oldies benefiting from the tax lurk…
This means a high proportion of the younger generation will be renters all their lives, including in retirement…
But tax and benefit arrangements also discriminate against renters… [Owner-occupied housing] is excluded from the assets test in assessing your eligibility for a full pension…
Gittins has hit the nail on the head with this piece; although there are other ways in which the young are being shafted, such as through current superannuation arrangements that allow older, wealthier retirees to avoid paying tax (e.g. via zero tax levied on superannuation earnings for those aged over 60).
I guess the young should be grateful for small mercies, however, given they would have been shafted even more if the Abbott Government was successful in escalating university fees and blocking access to under-30s receiving unemployment benefits.
If I was a youngster, I would vote for any party that agrees to unwind the lurks benefiting older Australians, including negative gearing, the capital gains tax concession, and superannuation concessions, along with moderating Australia’s world-beating (and living standards-lowering) immigration program and tightening the assets test for the Aged Pension by including the family home.
This obviously leaves out the Coalition, which has refused reform of the above tax concessions and has pandered to the grey vote. If Labor was smart, they would take the initiative in the above areas as the Greens appear to be doing.
