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Generation X have been betrayed by neoliberalism and baby boomers

By   /  May 8, 2014  /  28 Comments

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NZs intergenerational theft is always loaded against Gen Xers. With so many Gen Xers fleeing NZ to pay their student loans off, Baby Boomers forever have the tyranny of the majority to ensure their cradle to grave Government subsidy will never end.

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Apr 27 starGenX1
Brilliant article today by Susan St John on the the continued generational theft from Gen Xers by baby boomers…

Viewed through the lens of population change, the future looks alarming for those born in the baby-bust years following the post-war baby-boom.

This Generation X, now aged 28-48, are not all “whiz kid” executives on high salaries. Many have student loans and mind-boggling mortgage debt, and many face the high costs of parenthood and the growing needs of their older relatives.

As retirement looms, they see the baby-boomers take an ever-increasing share of the economic pie, not just in the form of superannuation but in healthcare too.

Treasury figures show that spending on NZ Super in 2010 of about 4 per cent of GDP will rise to around 8 per cent by 2060. This overstates the true cost, as some flows back in tax, but ageing pushes up healthcare costs too, adding a further 3 per cent of GDP by mid-century.

If the baby-boomers take more, how will the younger generations fare?

…NZs intergenerational theft is always loaded against Gen Xers. With so many Gen Xers fleeing NZ to pay their student loans off, Baby Boomers forever have the tyranny of the majority to ensure their cradle to grave Government subsidy will never end.

We have so much to thank Baby Boomers for. They forced social change, increased personal freedoms and demanded accountability from Government. They protested Vietnam War, feminism, nuclear free NZ and the Springbok tour, but what they failed to protect was the very universal provision of social services that set them up so well in later life.

Gen Xers were the first use pays generation. They had to pay for their education, then save up money for a deposit on a house in a property market speculated out of their reach by baby boomers while also saving for their own retirement. In short, Gen X have been treated as poorly by boomers as Paula Bennett has treated beneficiaries. Happy to benefit from universal provision, but not happy to share it, the charmed existence of the boomer hasn’t existed for anyone but them.

A progressive Government coming into challenge this intergenerational theft should first consider reapplying death duties to redistribute all that boomer good luck to other generations.

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28 Comments

  1. The Real Matthew says:

    I struggle with death duties as a tax policy.

    Whilst they work well in theory I can’t help but think it would be relatively simple to circumnavigate via Trusts and distributions to family members prior to the date of death. It would also be a poor policy for “rebalancing” between generations as the tax would only apply at death which is after the fact.

    As for the sentiment of your article, the only constant in life is change and the world changes with it. I see little point in rehashing the policies of the 1960’s, the world has moved on.

    • Stuart Munro says:

      Governments find death duties convenient because except for a few anomalies like Judith Collins most cadavers don’t struggle much.

      The trust rules should be tightened though – except for charitable purposes or minor orphans no tax advantage should exist.

    • Green Pirate says:

      Ireland gets around this with a tax on all assets held in trust, simple.

  2. meconism says:

    In his book Generation X, Douglas Coupland identified this generation as being born between 1961 and 1971. I don’t consider the post war baby boom to have lasted for twenty years.

    • Serpentor says:

      Douglas Coupland is a fraud/hack/idiot. Baby Boomers are 1945-1963. Gen X is 1963-1981. Gen Y is 1981-1999. Millenials are 1999 and on. It’s not rocket science, add 18 starting at the last year of the previous generation.

  3. Lachy Paterson says:

    I hate this ageist rubbish. Not all bombers are wealthy and lots (working class ones) got shafted by Roger Douglas then Ruth Richards etc. This talk of “theft” is also counter productive. Theft is stealing something you are not entitled to. Using the logic of this terminology nobody should get pensions, healthcare etc unless they can pay for it out of their own pockets themselves. If we want social provision for generations to come stop calling it “theft”. Otherwise this is just more right wing bullshit.

    • fatty says:

      Ageist? Or do you mean generationist?
      I don’t remember anyone from Gen X bemoaning the war generation for setting up the welfare state, and providing their siblings with full employment.

      “Not all bombers are wealthy”

      Yes, and now that they’re moving into retirement, they’re beginning to realise this. Blaming the boomers for the introduction of neoliberalism in no way assumes that all boomers are to blame, nor that all boomers have benefited from individualised capitalism – that’s illogical. It’s like the Pakeha Party saying not all Pakeha benefited from colonialism because there are poor Pakeha, or that not all men benefit from patriarchy. It’s a simplified and individualised reading of macro-changes from generation to generation.

      “This talk of “theft” is also counter productive. Theft is stealing something you are not entitled to. Using the logic of this terminology nobody should get pensions, healthcare etc unless they can pay for it out of their own pockets themselves.”

      That’s an extremely market driven idea of ‘theft’ based on right-wing Libertarianism. ‘Intergenerational theft’ in the way bomber has used it is the opposite of your perspective.

      Take a look at where Generation X are at and consider that Generation X have to provide the means for the boomers’ superannuation. You can even take an individualised view of the next 30 years and you’ll realise that the boomers have screwed themselves by screwing Generation X.

  4. Tiger Mountain says:

    Each generation has to fight both for fresh advances and to keep past gains.

    The unionised workforce by the late 70s had made considerable gains but this was substantially undone by the ECA (Employment Contracts Act) of ’91 and Rogernomics (me me me Neo liberalism) which fitted the kiwi SME model perfectly in terms of driving down wages and conditions.

    Kiwis of many ages contributed to this backsliding, not just boomers. Yes there are obvious offenders who had free tertiary and now sit in mortgage free homes with a renter on the side, but hundreds of thousands of boomers do not and are doing it hard too.

    Less labelling and more political organising is what is needed.

  5. what a load of hogwash, the baby boomers did not put a price on education a National Government did that, nor did they create the climate of today that sees house prices escalate out of reach of GenX, that’s thanks once again to a National government trying to keep an economy going after wanker bankers ruined the world for everyone except the super rich.

    • fatty says:

      …Labour as well. Under Helen Clark student debt and housing prices increased dramatically. The baby boomers voted in these governments after a lot of them had become educated and bought relatively cheap housing.

    • shona says:

      Absolutely and what always seems to be forgotten is those 22% interest mortgage rates of the 1980’s and the unemployment of the late 1970’s and early to mid 1980’s. Also there were no universal student allowances until 1978 and if there had been student loans many of us would have finished our degrees in one hit instead of going out to work then doing a year or a semester ‘s study here and there so we could fund ourselves. No accommodation
      allowances either.

  6. jane says:

    So when did it become okay to do ageist? Racist? oh no no slap on the head. Sexist? Ter-whack!
    Some baby boomers own ten Harleys and ride from investment block to investment block via Chez Cafe at Taupo every other weekend.
    Others do it hard in a conked out bus sitting in the Coromandel where their dole got cancelled by Helen Clark.
    Superannutaion could be means tested.
    I mean, really, does “Sir Bob” have to hobble down to the ATM each week to withdraw his cash?

  7. Darth Smith says:

    with have been screwed and thats before you get to the enoumous pile of dedt thats being left behind there has to be some intergenerational justice boomer bought there homes at 3 x income not 7=12 we paying now they got the best years and we being left with the hang over not good enough not fair!!!!!1!

  8. Andrea says:

    And the purpose of all this faked up angst is? The gross sweeping generalisations? The flinging of loaded words such as ‘Free!’ and ‘Theft!’? The generation of frustration and envy and pointless raging? For what?

    Among all the ‘boomers’, how many have the power, influence and means whereby to ‘redress this grievous wrong’ against – their own kids?

    SOME ‘boomers’ had all these advantages.

    SOME Gen X, Y and Z have the same.

    Many, many, many of all those generations do not.

    It’s dull being practical, I know, but creating more divisiveness, when many ‘boomers’ are working to raise grandkids, help their ageing parents, etc and so on, just like the generations before them, is not very wise.

    Helpful might be to look at how older folk who both want to work, and have to work, can get past the ageism and discrimination so they can continue contributing to the wider population.

  9. fatty says:

    The response to a post about generational inequality never fails to amuse me. For some reason a structural/systemic perspective gets thrown out the window and defensive individualism comes out.

    On left-wing blogs if ethnic inequalities are rejected with an individualised justification (I’m white and poor), then this is shot down and people rightly point out that historical & structural racism means that broad generalisations are useful.
    If gender inequalities are rejected with an individualised justification (I’m a man and I’m poor), then this is shot down and people rightly point out that historical & structural sexism means that broad generalisations are useful.

    …but if generational inequalities are pointed out, then it becomes fair and reasonable to reject the issue with an individualised justification (I’m old and I’m poor etc).

    Then the GenX who point out these inequalities get told they are divisive and they need to work together? Fuck that. I’m a white cis male who speaks out against sexism and racism in all it’s forms. I’d never tell Maori or women or trans* to stop being divisive (and I’m not saying the younger generations face the same oppression as those groups).

    Any GenX or GenY with a reasonable grasp of history doesn’t want to go back to the post-WWII social democracy – that was built on sexism and racism. But the boomers need to throw us a bone when we point out our shitty economic situation, and our shitty economic future. Pointing out generational theft is an argument for all of us isn’t it? Surely it just means that neoliberalism has screwed us? It doesn’t mean that all boomers had a sweet ride.

    …and people wonder why we don’t vote

  10. Aaron says:

    So to deal with the problem of the Baby Boomers not passing on their wealth to the next generation you’re proposing taxing them at death – just as they’re about to pass on their wealth to the next generation?

    Or are you saying that they’re definitely not passing on the wealth? – in which what would be the point of taxing them at death?

    I’m sorry but this makes no sense. The real problem is the wealth gap between rich and poor, not between two arbitrary age groups.

    Also, most Gen Xers will get by just fine, it’s the next generation that’s really going to notice as difference – as has been discussed on this blogsite.

  11. adam says:

    I’m X gen and I say – yes boomer is right – when the baby boomers took power from the previous generation economically they impossed neo-liberalism. I did’nt see any boomers fighting back against it, they were all so fucking happy that Rob was gone and they now were able to have some material wealth. Or should I say 30 pieces of silver – is that clearer for you?

    I did not see one boomer standing on the line when the cops beat the shit out of us for opposing neo-liberalism. I’ve never seen a boomer put their ass on the line to oppose neo-liberalism, never, not once. Many of my generation have, some have even died fighting it. But, baby boomers (and by baby boomers I do mean the white ones) they moan and put hand on heart and go, it’s so hard – we feel your pain. But, they don’t ever give up their comfort.

    Well I say, let them have neo-liberalism till death. Fuck I’m looking foward to the time the boomers get to retirement villages – Who is going to look after you? What market mechanism? Or are we going to have to remind you baby boom arseholes that you treated our grandparents like fucking shit – here your turn fuckers.

    I’ll tell you what, as a X’er I’ll take the hit for greed and desires for material wealth. But I’m going to call you the selfish self absorbed generation you are, I’m going to point to you as a warning to all of humanity that following self focus, self indugent crap is the doom of us as a species. You as a generation are a fail, get over it – your not that fucking great. Were not saying were better, were just saying your shit does stink and your fucking full of yourselves.

  12. Lara says:

    More tax? I don’t think that’s the answer.

    Most of the older generation who have wealth have it tied up in property. I think the market will take care of the value of that quite nicely.

    The bit that really gets me is universal National Superannuation. The “I paid taxes all my life and now I deserve my Super” mantra coming from people who live in comfortable mortgage free homes with investments on the side, who do NOT need a payment from the government.

    Either a universal basic income, or means test the lot. Picking one group of people and giving only them a non means tested payment is unfair.

    They seem to think that part of their taxes went into a piggy bank to be paid back to them at retirement. But it didn’t. It was spent. By governments they voted for, on them and their families.

    They know this intellectually, but still demand that those working now pay them something, because they were “promised”.

    It’s the non means tested payments to wealthy retired people which needs to stop. If they have enough to look after themselves, they shouldn’t be taking from others as well. This is only the second generation in NZ history that has a non means tested Super. And their parents had to deal with the surcharge for a while, and oh how they complained about that!

    • Barry says:

      Which is why the Kiwisaver concept is so good – the payments go into your future – not the future that some politician wants it to go in.

      We had the opportunity several decades ago to do this but it was allowed to slip by.

      • Draco T Bastard says:

        Saving money is worthless as it fails to save anything while demanding continued, unsustainable growth.

    • fatty says:

      “Most of the older generation who have wealth have it tied up in property. I think the market will take care of the value of that quite nicely.”

      Do you mean the market will drop and the prices drop? Because from what I’ve seen we have been using, and will be using, rich immigrants to keep our housing prices inflated for the next 30 years. We need more refugees and less millionaire property investing immigrants.
      Or if the house doesn’t get sold, the wealth gets passed on to family and social mobility continues to drop (it’s already low now).

      “It’s the non means tested payments to wealthy retired people which needs to stop”

      I strongly disagree with this (and all means testing). Means tested welfare is the root of our problem – it has failed us with every other form of means tested welfare we have tried. The answer is to tax wealthy people more:
      Tax the rich
      End GST
      Financial transaction tax
      Capital gains tax

      …or an easier way of saying it is MANA’s policies.

      • Lara says:

        “Means tested welfare is the root of our problem – it has failed us with every other form of means tested welfare we have tried.”

        I completely and utterly agree.

        And to Draco – I agree on your comment re continued unsustainable growth.

        And I think a huge part of the answer in how to fix both lies in the structure of how our money works.

        Changing from an interest bearing debt based system, to an interest free demurrage system would have enormous benefits for the entire country. And quite quickly too. Then we could very easily afford a UBI. Non means tested. For everyone.

        No more perpetual growth in a finite space. No more heavy welfare system. Zero growth and full employment.

        http://issuu.com/margritkennedy/docs/bue_eng_interest

  13. Stephen says:

    It is really exciting to be able to put on the clothing of self-righteous outrage; but actually it is both unhelpful and unrelaistic – see Keith Rankin’s article on economics. Strip away all Bomber’s rehetoric (“theft” and so forth) and let the facts speak. I come from a generation which enjoyed (and I use that term absolutely) free education, free health care, controlled rent on our state house and so on; as a result I was the first ever in my (intergenerational) family to get School Ceertificate, and ultimately a university degree. I have fought against neo-liberalism, and like ALL of us I have lost that fight – just as much as a 40 year-old Bomber must, I take responsibility (is that the right term?) for being on the losing side. The consequence of that loss is that my children and grand-children are much worse off than I am; at the age of 64 after working all my life (I loved full-employment as a government policy and a social expectation!) I now own my modest apartment mortgage free, and I also own the wee one next door that I rent out (yes, gerasping bugger that I am!).
    Of course the cancellation of taxes designed to smooth inter-generational wealth accretion – gift tax, death tax – has absolutely enhanced inequalities. So now, like most people, all generations of my family look forward to my death – we all hope it will be early, and that no huge health costs are run up – so that what I have worked for all my life can get to my kids. Do I trust governments any more? Not likely! So the Australians are moving to make old age pensions asset and means tested – requiring old people to sell their homes to pay for their own expensive lives so the young fdon’t have to pay their pension – and we will do the same here no doubt. We will introduce and extend capital gains taxes so that old people pay it on their family home. Old people will be taxed for having a spare room for their grandchildren to stay in (like in the UK); all very vengeful and all well-designed to make these grasping old buggers suffer; but how does it actually help my children and grandchildren? Does the Goveernment pass this money on to the next generation? Of course not – it just gets lost in the swamp of corruption that is New Zealand ploitics.
    Anyone got any coherent ideas how we can transfer assets from one generation to the next, a way that will not just be Governments using the wealth created by one generation to allow them to reduce taxes on the next and save nothing?
    Remember we paid high taxes; perhaps the best way is to again pay the true costs of running a country in taxes; assure old people that they will not be punished and thrown out of their homes, give them subsidised pensioner housing with a living wage – and make that a promnise that will stick beyond the next change of government – and then I for one would be happy to transfer what I own to the State for worker housing.

  14. Barry says:

    Oh Martyn – you should set up a business called something like “Blame Inc” with the moto: ‘we will find some to blame – because its not your fault’

    I know 8 gen-x ers very well – 4 are my kids, 4 are their wives. they range from 30 to 40 in age. And there are their friends – so the number starts to add up.

    They are very helpful, they all keep in touch much more so than I do with my brothers and sisters, they all help each other with various jobs, they are all very loyal, but they couldn’t save dollors to save themselves.
    They were aged sort of 8 to 15 when we built a new house. We didn’t have carpets or curtains or wall paper. We had always operated on the basis that “if you didn’t have the money – then you didn’t buy it”. We slowly got all those things, did the section ourselves, etc – but they just cant help themselves. If they get offered a credit card – they cant say no – and they thrash them.
    They were ruined (in respect to saving and planning) by student loans. The Govt would give loans to anybody in the stupid belief that a degree was the answer to everything. “Everyone should get tertiary education” But where would you get a plumber or a carpenter?

    The baby boomers haven’t stolen anything from anybody – that’s just a mindless blame game.

    Who actually did the stealing was THE LABOUR PARTY. Roger Douglas and his band of ratbags have done more damage to New Zealand than everyone else put together. It should be the everlasting shame of anyone who supports labour that this happened.
    I know that everyone says it was an aberration – but it wasn’t. Ill explain later why.

    Rogernomics did the following:
    Started the decline of apprenticeship programmes
    Exported jobs to places like china
    Removed any concept of loyalty between employers and employees
    Removed the idea that society needs some rules and regulations with the phrase “the market will regulate”
    Got the “user pays” concept really underway.
    Removed superannuation programmes from the workplace
    etc, etc
    In general he tried to remove everything that had made a stable prosperous society. Sure some things needed change – but to destroy many well proven helpful aspects was wrong.

    Add to regernomics the emergence of the world wide falling in love with Globalisation (which means no local protection) and a combination of equality with feminism (which doubled the number of people looking for jobs in an economy that’s was exporting jobs) and you’ve got the sort of economy that we have today: low wages, no job certainty, relatively high house prices, lack of trade skills, no savings, no planning, etc, etc.

    Now – why was it not an aberration that Roger Douglas got to implement his radical extreme policies via Labour?

    Well its simple really. Labour is a party of activism (National is the opposite – do as little as you can get away with). Labour has a history of introducing a whole raft of new ideas and initiatives. The trouble is about half of these things are very good, the other half are terribly and awfully wrong. Rogernomics was one of the awfully wrong ones.

    You might be surprised to know that many of New Zealands industrialists vote Labour. Why? – well its self interest really. The belief is that Labour will introduce some change – which could be social but is just likely to be related to industry – like import licensing or something like that – which will result in the need for some serious outside help from the private sector – and the government will have to pay whatever the price is. One recent example is Novopay. The money thats involved fixing and running this is just horrendous – and its all going to outside contractors. You bet they will be voting Labour for the next project.

  15. Attacking any section of the population based on age race or sexual orientation is to play the capitalist’s game. Neoliberalism was introduced to Aotearoa by the Labour govt of 1984. People of all ages, race and gender have been fighting back ever since. This kind of argument belittles their fight and belittles the people making the argument. Bomber does this periodically and it really just shows a lack of knowledge of how capitalism works. Age isn’t an individual thing any more than any other part of how we are made. Fight capitalism, not each other.

  16. pat says:

    its been a long time since i read so much ageist bullshit…….mostly i find its from disgruntled gen x and y who wont get of their arse and do something…….no one ripped you off……look at govt and the elite…..we all got hammered during our time……get involved do SOMETHING!!!…….OR SHUT THE FUCK UP!!!!

  17. Marc says:

    There have been mistakes made, there will always be mistakes made, and the older generation will always owe the younger ones something. But the division and competition and even hatred between generations led to some very troubled developments in history.

    It was last not least Hitler who exploited the aspirations of youth for his and his fascist party’s purpose and goals, and many others have and are doing the same. It was not and will never be one generation, whatever you may call it, that is responsible for all problems we face. The society and world is too complex. Also most young ones have parents, who tend to help them out one way or another, so that does mean that people are not sole operators and all divided after all.

    So we must be always aware, that there will always be generational challenges, that is within the nature of us humans, but we must deal with it responsibly and maturely and find common ground, and a way of learning and working together after all.

    That is the only solution.

    To use such info to divide is not helpful.

    Best wishes

    M

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