The radical state of being content

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The federal budget is already being pitched as boomer-friendly. At a recent doorstop in Port Macquarie, Prime Minister Malcolm Turnbull declared, 'we've come here to meet the people that Bill Shorten wants to rob'. He added words like 'disrespect', 'picking pockets' and 'cash grab of older Australians'. He later visited a retirement village in Beenleigh.

Malcolm TurnbullAs Labor continues to tinker at fiscal structures, old chestnuts like 'intergenerational warfare' and 'the politics of envy' will be lobbed at them, too. It'd be a mistake to take this narrative for granted.

The divide is one of class, not generation. There is no other way to explain the 'tsunami' of older women under housing stress or homeless, caught in the same conditions as millennials and GenX-cuspers. There is also no other way to explain persistent, cross-generational disadvantage in regional and outer-suburban areas. The common denominator is lack of capital. 

Boomers have been cast as the villain in the piece, but it is the asset-rich subset, who benefit from Howard-era offsets and rebates, who are most resistant to changes in tax policy. Some of them are in parliament, where they can more directly defend the status quo.

They often do this by talking up savings, ennobling older generations as self-funded while disparaging younger ones. It is an incomplete picture of the conscientious retiree. The divergence in wealth accumulation, according to Grattan Institute director Danielle Wood, revolves around asset price.

The average person aged over 55 who purchased a house before prices took off from the late-90s is a millionaire. That doesn't make them good or bad people, and they certainly don't need to feel aggrieved about being objectively wealthier than many Australians.

But they can accept that their wealth is less about collective virtue than sheer timing, reinforced through a tax system that rewards property ownership and shareholding. Having an entry point into that system is an advantage by default. That has nothing to do with character, and everything to do with inequality.

 

"In Australia, the richest one per cent controlled 23 per cent of wealth in 2017, a three per cent increase from 2013. That doesn't happen on its own, as if good things only happen to rich people."

 

The average household in the 64–74 age bracket is $500,000 richer today than in 2003, but the proportion who pay tax has halved (to 16 per cent). 'Let them keep their money,' the rhetoric often goes — but that is precisely what the older rich have been doing all along.

They have been completely enabled in withholding billions of dollars from public goods. Perhaps that's not on them but on the architects of such a system. Hanging onto that system, even when it has been exposed, is what incriminates them.  

Wealth disparities seldom penetrate those who don't experience them as unfair. Our understanding of what is normal can be limited by experience. Being accustomed to certain comforts can lead us to think we must have earned them on our own.

Even so, how comfortable does anyone really need to be? The amounts of money that get quoted in remuneration packages or property portfolios is incomprehensible to Australians who manage to survive, even thrive, on so much less.

In this regard, inequality seems to be driven by an accumulative mindset, a fundamental incapacity to recognise what is enough — and to stop. There are words for it in psychology.

It is an indictment on governments that facilitate excess. That the richest one per cent are on track to hold two-thirds of global wealth by 2030 indicates the extent to which politicians have abdicated their role, both before and after the global financial crisis.

In Australia, the richest one per cent controlled 23 per cent of wealth in 2017 — a three per cent increase from 2013. That doesn't happen on its own, as if good things only happen to rich people. Even if that were the case, we ought to ask why and how such a world can be unmade.

 

 

Fatima MeashamFatima Measham is a Eureka Street consulting editor. She co-hosts the ChatterSquare podcast, tweets as @foomeister and blogs on Medium.

Topic tags: Fatima Measham, Baby Boomers, tax, budget

 

 

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What a pity the entire world is not poor. Then we would almost certainly love each other much more and wallow in the privilege of knowing that God has an equally rationed preferential option for each one of us. None of us would have to work to improve our status or help other poor people to a better life. It would be wonderfully uncomplicated.
john frawley | 13 April 2018


You make some good points Fatima, but a major problem we have in Australia is the reluctance of both political parties to attack the core issue you raise, which is not income but aggregate wealth. At the moment we tax income probably far too much, (and Labour`s extension of this to franking credits is bad policy and is divisive and won`t even work), and we tax consumption probably too little and not differentially enough, but we don`t really touch wealth, however arbitrarily it was accrued. The best and most efficient way to tax wealth would be on residential property, say starting at a very low rte at a threshold of $1m, whether primary home or not, and progressively but slowly escalating every million or so from there. Would have so many advantages in terms of not just tax-take but also changing a whole set of cultural behaviours related to housing. Why don`t we try to get bipartisanship on something really sensible like this?
Eugene | 13 April 2018


Very important and concisely and well-written article dear Fatima. Great comment John Frawley. Is it not time now for New Testament-believing leaders in the Church (if there still be such) to work together with community-building experts, towards founding, not more convents, abbeys, cathedrals, etc., but self-sustaining villages, where all can find work sufficient to support life and the common weal (butcher, baker, candle-stick-maker, etc., etc.). Where you can easily walk or bike to work and to all facilities. Where you can grow organic foods and breathe fresh air. Where the church-building also functions as the community centre. Where they can accept a small number of 'broken' people into their God-loving and healing environment. No wealth accumulation other than enough to care for each other and those they take in. Where all accepted into the community have a common intention to live by Jesus Christ's words. If atheists can do this type of community building shouldn't we be able to do it a lot better . .?
Dr Marty Rice | 13 April 2018


Spot on Eugene. It's the concentration of wealth that is the real danger because that leads to a concentration of power - political, economic, and social power. The French economist Thomas Piketty deals with this well in his book 'Capital in the Twenty-First Century' where he traces the development in the concentration of wealth since the late 18th century. Contrary to what our political leaders would have us believe, most wealth accumulation is not a result of personal effort by the wealthy but rather a result of inheritance. Taxing income, no matter how obscenely high, does not solve the problem. A progressive tax on wealth is what is needed. And Marty, I think you've misunderstood John. I suspect his comment was a tad tongue in cheek?
Ginger Meggs | 14 April 2018


John Frawley, your comment has nothing to do with Fatima's article. It seems you seem to have a gripe with the scriptural prescription that demands society "opt for the poor". The new testament is a lot clearer about the way we treat "the poor" than it is about other moral issues you seem to be obsessed with, yet you seem blinded by the political spin of the day. "The poor" certainly do work. They care for your elderly relatives in aged care homes, they take your disabled relatives on community outings and they grow your food and assemble your electrical goods. You are confusing "unemployed" with "poor". I've been unemployed at various stages of my life due to economic pressures and redundancies beyond my control. Your arrogance as a surgeon astounds me.
AURELIUS | 15 April 2018


Dear Aurelius. I'm sorry that yet another of my posts seems to have upset you unnecessarily. You seem to misunderstand my particular use of language. As an arrogant surgeon I never charged a cent to the many poor I treated during my career and continue to actively support some 13 charities together with voluntary community work similar to yourself. You see, Aurelius , I was lucky, raised poor and went to university to learn the arrogance of a surgeon on a full scholarship that I needed to augment with paid work during holidays. I do understand the scriptural prescription that we "opt for the poor" as you put it. I do not, however, accept or believe that Christ has the "preferential option for the poor" that has become the catchcry of some in today's world. I believe he died for each and every human being he created without preferences, rich and poor alike, saint and sinner alike, believer and non-believer alike (very Vatican II- ish) and that any preferential option was anathema to him. I think you missed the "tongue in cheek" that Ginger refers to, Aurelius. In this world, the poor are dependent on the rich like you and me, Aurelius, and we have the obligation to help if we claim Christ as our guide. It is this role of the rich which Fatima to my mind fails to acknowledge in this article. Keep up your Christian voluntary work, Aurelius, and try to have a pleasant day without the anger that the arrogance of a surgeon seems to stir in you.
john frawley | 16 April 2018


How disconsolate it makes me feel to read John and Aurelius sniping at each other (ever so politely, of course) and vying with each other to be seen as the one with the most difficult childhood and yet now become the most generous giver. Come-on guys, if indeed (as I hope and pray) you two are among the few who are in Christ (e.g. Matthew 7:14) then let us defer to one another out of reverence to The Lord. Please to read and meditate on a small and almost perfect book (only 100 pages, big type) "Living Gently in a Violent World" by Stanley Hauerwas and Jean Vanier (IVP Books 2008. ISBN 978-0-8308-3452-5). What they write is almost a direct answer to the vital issues raised in Fatima Measham's superb article. There is a way of life that is free from self-pity and from all boastfulness; it is a way of life unknown to this world; a way of life that presages our future eternity with Jesus; a way of being that deeply satisfies and pours contentment into our torn and ravaged being.
Dr Marty Rice | 16 April 2018


Fatima, the outcomes will never be equal. Equal opportunity should be the goal. Encourage and foster competition. Currently, if I save all my life and support myself for a better life in retirement, I am "deemed" wealthy and should be targeted with Bill's new taxes. Conversely, if I live a life devoid of any savings, then I can be assured I will receive a full pension in retirement. In addition, I might also argue that I should receive a bigger pension payment. Unfortunately the system is structured where behaviors ( outcomes ) we want to encourage are penalized and vice versa. Yes, reform is needed but is has to be very broad. Needless to say, if you lack high value skills, you will never live in the suburb or in the house to which you might aspire. It is the reality of the world in which we live, and I think to John Frawley's point, this has not changed.
Patrick | 19 April 2018


Dr Marty Rice, perhaps I didn't take enough enough to articulate my point to John Frawley that being unemployed doesn't necessarily equate to being poor. I was simply pointing out that even the highest paid professionals can expect to be made redundant in today's technology driven economy. I wasn't looking for sympathy or playing the victim! Likewise, to John Frawley, I wasn't saying that the so-called "rich" are excluded from God's plan of salvation. I was merely pointing to Jesus' own words! Argue with Jesus, JFrawly, not with me. My probably flawed interpretation of Jesus' very explicit teaching on his preference for the poor is that "the poor" are already saved, but the salvation of "the rich" depends on how they've treated "the poor". Simples! (tweak)
AURELIUS | 24 April 2018


This article, a rephrase of President Barack Obama’s “you didn’t build that”, boils down to the premise that you’re merely lucky to own your property. Aren’t most people merely lucky to own their jobs? Most jobs can be performed by many more people than just the holder, which makes the claim that you earned your job a little precious. Should we make you re-bid for it every three years or so? A job is an income-producing asset given to you (unless it was a sinecure for which you had to pay) for free by an employer who could have picked someone else. A job on the average or median income, let’s say from $60000 to $80000, also rids you of the bothersome chore of acquiring, let’s say, $1.2 to $1.6 million dollars’ worth of Commonwealth Bank shares at a 5% dividend. Even the paltry $23000 universal basic income mooted by the Greens, if self-funded, would require north of $400000 in CBA shares. If jobs are a social good, so too must be the assets in private hands that fund them. If the assets are moral poison, so too are jobs as fruits of the poisoned tree.
Roy Chen Yee | 26 April 2018


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