While sitting today I got very confused. I realised that I could really see future generations currently stealing resources off me in the way I keep hearing.
Now, as was quickly pointed out to me by my work colleagues’ resources are in fact being “stolen off me” in two ways:
- Future taxes will need to rise to pay for superannuation
- Knowing that superannuation is available, the older generation is saving less now and increasing consumption – thereby pushing up interest rates and the price of consumption.
Very good, we have our fundamental reason why superannuation is unsustainable – because tax rates will need to rise in order to satisfy the governments “balanced budget” constraint.
Now if we believe it is the hubris or straight selfishness of older generations that is behind the refusal to change the superannuation age to make it affordable – then frame it in terms they understand.
Say that, when they are retired it will be the next generation in charge. The next generation won’t be willing to increase taxes, and so will cut them off – forcing them to leech off their children or live an impoverished existence. If the younger generations show this degree of bloody-mindedness now then older generations will definitely cut back on consumption, and start saving for their retirement.
They might even be willing to “make a deal” regarding the retirement age.
So if that’s the way you think, stop saying how much Gen X and Gen Y are going to get hurt by the superannuation issue – point out the potential for the Baby Boomers to have the rug pulled from under them, giving them a miserable impoverished retirement.
Note: I don’t want anyone to suffer here. I’m just part of Gen Y, and we were raised during the reforms – so I’ve learnt to think about these matters in a more, say, clinic way.
Update: Bill picks up that the population demographics aren’t in favour of my proposal – while Eric indicates that no-one really is 😉 . I’d note that my joking proposal was mainly just a way of showing that there is a “cost” turning up, and we are thinking about how to share this burden between people – it isn’t just a case of baby boomers robbing everyone blind!