Australia’s had a great decade of economic growth and the benefits were spread across the economy according to Grattan Institute CEO John Daley.
Speaking at the Customer-owned Banking Convention in Darwin today, Daley said the mining boom drove a big lift in incomes across the entire nation, not just mining states, so the benefits were “well-spread across State, income levels and ages.”
But Daley highlighted that overall, older age groups were the big winners, becoming much wealthier and fitter, thanks to a fall in interest rates and improved health care outcomes. The growth in wealth of the 55-64 and 65-74 age cohorts made them the biggest beneficiaries of the decade to 2014.
And while Australians aged 45-54 also benefited, Daley told Business Insider the outlook for the younger cohort of Australians is less positive than for their parents.
That’s because “harder times lie ahead” in an outlook for lower growth in per capita incomes, plus a rise in complacency as a result of the long run of prosperity and the unsustainability of the Federal Government’s budget position all combining to saddle younger cohorts with extra lifetime debt.
Younger workers around the globe are earning less than their parents and have lower and falling rates of home ownership.
Daley said Australia needs to find a way to increase growth and balance the budget. That means tougher calls from the government – a cudgel new treasurer Scott Morrison might just need to take up if he’s ever going to get the Budget anywhere near surplus.
High on the shopping list of changes is a rethink of pensions, superannuation and asset taxation. Daily stressed it was unfair that a retiree can earn tax-free income while younger Australians don’t enjoy the same breaks.
One thing is for sure: the data shows the millionaire class of older Australians can probably afford to pay a bit more into federal coffers to balance out the equity in the tax system and the government’s budget.
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