Single, childless millennials demand boomers share more of their wealth

Despite having paid tax and lived within their means all their lives, boomers are accused by younger generations of hogging the wealth of the nation.

We are living in a two-tiered economy but what we should be asking ourselves is whether those two tiers are just the retired and the millennials, or whether these two tiers are more serious, more nuanced, writes Angela Shanahan.

Some of the best things I have seen on television were on SBS – and some of the worst.

Insight is one of those audience discussion shows that often has interesting, even stimulating, subjects, and this past week the topic was the intergenerational wealth imbalance; you know, that recurring theme: “Old codger baby boomers hoarding all the wealth and real estate while hapless young millennials can’t buy a house.” It is getting to be a monotonous refrain.

The point is not hard to see. It is another left-right policy argument that boils down to millennials trying to get more money from retired and almost retired so-called baby boomers, whom one participant on Insight unashamedly referred to as “the people who have all the money”. This cohort want it redirected to the younger, seemingly “poorer” generation. To do this we need to (you guessed it) tax the older generation even more on the wealth and assets they have acquired, despite having paid tax while they earned it, and remove economic incentives for investment, which of course would also get rid of any incentives for the younger generation to do the same in the future.

The Intergenerational Report, released this week, once again focuses on the ageing population and the birth drought, something I have been writing about since the late 1990s when it became obvious Australia’s birth rate was falling precipitously. Well, the future is here. However, this report also has a positive message. It makes clear the disastrous drain on the Age Pension system, about which we were forewarned, is nowhere near as bad as was predicted 20 years ago, and the use of the pension is declining. Why? Superannuation.

Yes, that enormous great lump of money we are told the millennial generation so resents and is so keen to tax. Along with wanting to tax the money people have saved for retirement, there are proposals to tax investment incentives such as negative gearing on residential property and even the family home, both of which often provide threadbare millennials with a roof over their heads.

However, what I found most interesting about this and similar discussions (sometimes with my own millennials) is the tendency to the usual refrains. From the oldies it’s usually along the lines of “we lived in a one-bedroom shack, on the smell of an oily rag and never ate sushi when we were young”; to the younger group saying “we are locked out of the housing market and the cost of living is too high to save and not only that, the vegan alternative costs even more”. One Insight participant pointed out that if they all cancelled their TV and social media subscriptions and didn’t go out so much they might have a bit left over.

However, only briefly in all this brouhaha were children and family mentioned, usually by the older generation who had them, looked after them and were, as a consequence, too poor or too busy to do the things millennials take for granted. It is also that older generation, those despised baby boomers, who, having had their share of sex, drugs and rock’n’roll are now trying to help the younger generation, whether it is by going guarantor on property, lending money, or looking after their children.

We are living in a two-tiered economy but what we should be asking ourselves is whether those two tiers are just the retired and the millennials, the old haves and the new have-nots, or whether these two tiers are more serious, more nuanced.

Are there differences emerging between groups of people, especially the young? And even more importantly, are a wealth imbalance and a housing shortage causing the biggest demographic disaster we have ever witnessed in the West, a decline in births so precipitous it threatens our economic and social wellbeing?

This is the economists’ answer to the Western baby drought, and there may be some truth in it. But I doubt it is the entire answer.

So, what is really stopping people from having children? Perhaps it is not just having too many social media subscriptions, too many fancy things and no mortgage that is keeping millennials back, but a real lack of moral incentive, a values crisis if you will, and the main indicator of that is both the baby drought and what comes before it – the marriage drought.

The census and the big social surveys taken for the past century have all confirmed there has been a serious decline in marriage and a parallel increase in serial relationships. Although just over 30 per cent of children are born out of marriage, the decline in marriage parallels the decline in fertility. That is because people are not stupid and they know marriage and children go together. It is the compact that holds the family together.

Nothing shows the values gap more than the decline in the marriage rate. So the gap between the millennial generation and the older group is not just a wealth gap, it’s a values gap.

The Howard-Costello government was the only recent government to seriously attempt to boost the economy of the family with some serious policy. The current government has one policy it claims as a “family policy”, a huge increase in the childcare rebate for people on incomes of up to $500,000. However, in truth that is really just an attempt to lure more mothers of young children back into the workforce or longer hours, which in itself is not a family policy, it is an economy policy and it is not good for families.

If the Albanese government were serious about family policy it would support a suite of measures aimed at more choice for families, and at new mothers who want to stay home or work part-time. It would encourage first-home buyers with more housing and mortgage and HECS relief, especially for people with children.