Could it be any better for Boomers and Beyond.

 

Proposals from the Long awaited Henry tax review are gradually being leaked in preparation for its release in the next few weeks. Already Dr Henry has proposed reduced tax rates for older workers and increased tax rates for the rest of us, so that we can support the health and pension costs associated with an ageing population.

It really amazes me some of the labels placed on ‘today’s youth’ by older generations, considering it is our generation which is to be left with the consequences of their excesses. Baby Boomers and beyond have failed to save for their retirement, they have racked up huge trade and now budget deficits, they have barely built any major infrastructure, have increased the costs of education and now it is proposed they receive tax breaks at the expense of younger workers.

There is something I am missing in this whole debate. Why should we pay for their high living ways? The whole lack of reform is smart politics of course but it is at the detriment of future generations. True reform of our taxation and welfare systems is needed. For starters quarantining capital inside the family home needs to stop. Our last blog entry focused on this, but the idea of the family home being some sort of sacred cow needs to end - it makes zero sense that those who cannot afford a home are paying extra tax so retired people can remain in theirs.

Similar debates need to occur regarding private health insurance. Health inflation runs at about twice that of the normal economy and insurers depend on young fit members, to cover the premiums of older members. Currently insurers cannot discriminate on the basis of lifestyle choices and are limited in charging extra premiums to those elderly members who have not been in private health for all their working lives. For a generation which is continually lectured about being responsible for their own actions such policies make little sense.

Baby Boomers are one of the most idealistic generations history has seen and whilst we are continually told in the climate change debate about leaving the world a better place, they can hardly use the same argument regarding the economy. In short if the status quo remains with Australia’s welfare and tax system ours will be a generation whose success will be stymied in the debt of our forefathers. What a legacy to be remembered by.