Australia’s largest states and cities are rightly worried about the exodus of young people, but we must go much further than the current policy mix to reverse it.
The latest data from the Australia Bureau of Statistics shows that New South Wales lost more than 37,000 people to interstate migration in the year through September 2022. Victoria also lost population to the tune of more than 15,000 individuals. More than four-fifths of those individuals ended up in Queensland.
This interstate migration data is not broken down by age group, but the trends are disastrous. We know anecdotally that young people in particular are being pushed out of Australia’s most expensive cities — the very places where they have the greatest opportunity for high-level careers in the most innovative fields.
Australia’s major cities account for nearly 80% of the national economy, almost 75% of jobs, roughly 65% of small- and medium-sized businesses and 80% of large corporations.
These cities compound their advantages year after year. Not even the work-from-home revolution has weakened their dominance. That’s why, for every suburb in Queensland where residents earn on average more than $100,000, there are 11 such suburbs in New South Wales.
If you are under 40 and want to build a career in the top 10% or 1% of earners, it is almost a requirement that you locate yourself in Melbourne or Sydney. Brisbane is next best, but is relatively small and dependent on the declining petroleum and coal industries.
Over lunch not long ago, a senior executive at a publicly traded company told me her home in Brisbane is why she earns substantially less than others who do a similar job in the two bigger cities.
So why are young people fleeing from the places with the most opportunity? The answer is the cost of living. Because of the inflation shock of the past year, we forget this is a long-simmering problem. Household gas prices are 235% higher today than 20 years ago. Medical expenses are up 210%, and electricity is up 175%. The median house price in Sydney is 168% higher.
Is it any wonder that only every tenth young person can afford a home?
One reason younger Australians cannot afford today’s higher prices is that government policies increasingly concentrate wealth into the hands of older Australians like myself.
The wealth gap between older and younger Australians has nearly doubled over the past few decades. Yet, a 2019 Grattan Institute report found young Australians pay more tax than they receive in benefits. Older Australians are net drawers.
We once considered seniors to be at the greatest financial risk, but today it is typically our young people who struggle the most.
As a society, we have been neither ambitious nor imaginative enough when seeking solutions that would put more money into younger pockets, even if that means taking it from their better-off, older compatriots.
We can start with a small gesture. Let’s means-test the seniors’ card so the wealthiest Australians no longer benefit. Instead, institute a “youth card” whose discounts help ease cost-of-living pressures for individuals under 35.
A more significant step would be to increase taxes that wealthy retirees must pay while reducing the burden on young people, especially those with lower incomes and children. This is the opposite of what the government is doing with stage three tax cuts, which come into force from July next year.
Young people can’t break into many suburbs because empty nesters can’t afford to pay tens of thousands of dollars in stamp duty to move to something smaller. Let’s remove that obstacle by accelerating the shift from stamp duty to land tax.
Then we can further encourage empty nesters, a group I will belong to in just a few years, by raising council rates on large homes with only one or two occupants.
Finally, we can levy tax on inheritances just like we do on other types of income. Charging a rate of 20% on bequests above $500,000 would enable us to fund income tax cuts that would leave most under-50s better off.
Let’s move the debate towards ambitious policies that would actually help younger Australians build fulfilling and prosperous lives in our biggest cities. That would be good for all of us.
Not happy about means testing the seniors card. Nor linking spouse incomes either. In fact I am particularly angry about that one. Im all for a universal income paid to everyone without means testing. I dont subscribe to the theory that everyone who gets a dole payment or pension will just sit back and do nothing. I believe that people will actually do more if they have a safety net. They will become more entrepenureal, take more risks, use their skills more, learn new skill etc. All of which would increase productive outputs for Australia. Who would pay for it?
Well lets start with individuals and corporations who currently gain the system to pay no tax. Put in a turnover tax for starters. Cancel the stage 3 tax cuts for seconds. Plus there are other things that can be done as mentioned about. Plus get rid of negative gearing and CGT concessions. A lot can be done really quickly.
One effect of a universal living wage is that people will be more able to quit jobs with crappy employers and look elsewhere. This will be a perennial blockage to this progressive idea as crappy employers will always seek disempower workers.
The Seniors Card, at least the Victorian one, only gives some public transport discounts and a few others from private firms.
The fact is if you do not agree to provide billions of start up opps to the expanse of middle men jobs providers billions of our finite human resources as fodder for their inept “training, NDIS middle men too, like the Dickensian workhouses; making mostly from the expanding unemployed older female fodder source for these parasites; well like the National Party Polly who’s indue card gleaned a payment from single indigenous mums when she had to feed and shop to support her kids.. Yeah money for an business idea producing what? Exactly ? What ya have a go if you take someone women and childrens’go? is that how it goes? .. Anywho The fact is the older 55 and over who got all the extra three dollars a day “young people” who identify as “young People” and not just the poor buggers living on less than half of a poverty line to then be used as business fodder for billon dollar “business opportunity” for blokes in suits; car parking consortiums, storage facilillites. property company with more than 600 publicly funded investment arms to take our public infrastructures and hospitals. .. think Opal Towers and the losses there … who paid Australian public paid… The ICAC better have teeth.. I give Labor one term and I do not want them to loose .. but it will get worse before the revolution comes
I presume the reference to “the seniors’ card” is to various (non-means-tested) state cards which provide assorted benefits. The commonwealth health cards are means-tested, but at a ridiculously generous level for the retiree beneficiaries.
Some definition of “wealthy” retirees should be provided. The super of the very wealthy has been hit by recent changes, but many of the others, with less super, are not paying any income tax and hence can’t benefit from stage three tax cuts. If the writer believes that superannuants should pay “normal” income tax on their super as they dip into their pot (not unreasonable in theory, but “very courageous, minister”), he should say so.
Even braver is the call for an inheritance tax, but he fails to make the link between that commendable view and superannuation. Super is becoming a significant source of intergenerational wealth transfer, with some conservative MPs actually citing it as one of the purposes of superannuation. As I understand it (happy to be corrected), a failure to specify the purpose of super in the legislation (comfortable life in retirement, not wealth transfer) plays some role in this unhappy state of affairs.
While not disagreeing with any of the sentiments in the article, I respectfully suggest that a bit more research and hence clarity might have been in order.
Yes! Not all old people are created equal! What about the poor b*stards that have worked damn hard all their lives only to still end up with nuffin, the ones Jack Robertson is always banging on about! (Bless his cotton socks!) At least the youngsters have health and energy to try to forge a path for themselves, not so much the old and broken….
I hear you, dilettantebeth. In a short article, you can only really deal with so much, but you are absolutely right about the poor b*stards that have worked damn hard all their lives only to still end up with nuffin (posted by the author)
The agesim is soooooo discriminatory and the daggy term “young People ” on the nose; labels like the inept Zuckerburg and young liberals try to pass the buck onto women and poor of any age . Lazy stuff
Agree, many good ideas but messy and some errors like the reference to stage three cuts, which are appalling, and wealthy retirees, the latter presumably don’t pay income tax, so the connection is? The framing of old versus young, while having some pertinence, also creates red herrings. Inequality is not overly determined by age, it is due to wealth. Older people are proportionately wealthier than younger ones and due to the history of housing this is very pronounced. But age is not a major determining factor. Most older people distribute in proportion to the population generally, especially if you take owning or paying off a (single) home out. Moreover many older people are not well off, older women I believe are still the age group with the most disadvantage for instance. Older people are mostly reliant on the pension, that is better than jobseeker but $1000 a fortnight is not rolling in it.
Making inequality an issue of old versus young, as opposed to addressing the actual reality of inequality, a small percentage having a high proportion of wealth in terms of income and assets, is just a divisive distraction. It earns clicks but does little good. It waters down the focus from where it should be and provides cheap relief, where “hey boomer” acts as a substitute for concerted demand for, say, an inheritance tax and a decent tax rate on super earnings above say, the average wage. Not to mention more effective corporate taxes.
I don’t see an error in the reference to the stage three tax cuts, just a minor lack of clarity. The context is clear enough, the author is discussing the gap between the wealthy and the young on low incomes. You are right that retirees are very unlikely to benefit much or at all from the stage three income tax cuts, but those on high incomes who are not yet retired obviously will, they can benefit more from making voluntary contributions to their superannuation and in due course they benefit again from the very generous arrangements for wealthy retirees. The author’s point stands.
Thanks, AP 7. You said it best. (posted by the author)
Basic maths; 55 is considered “older” .. The reality is women can’t retire until 78 . That is 23 years between Older and old enough to get the pension. Until then mental torture, gaslighting being told you are either a moron if you are unemployed as you are told to get a job but not afford the same employability score despite having retrained in trade and at University.. the perception is you are Karen incarnate.. the sexism in that moniker is really breath taking boys.. Simply cause ya can’t be taken as human first .. but that is and has always been the MO of tyrants and fascists government to segregate the whole into factions.. seen the villifications via these new odd fringe groups of self identifications…. Look at the abortion crack downs on women rights … where the Aussie outrage…zip
Women (and men) can access the means-tested Age Pension at 68, NOT 78 as you assert.
Agree with all your points. But for change you probably need a “story”. The generational story is one possible way of achieving change; even the greediest amongst us want to retain accessible talent and maybe even have children themselves. The more principled approach (inequality) will fatally be seen as “marxism” or “taxnspend” where drugs addled bludgers clean up and … whatever.
Thanks for that and I don’t disagree. To the extent we disagree probably just on tactics, what is the best narrative to mobilise change. However, I would argue that, by and large, positing intergenerational difference as a key story primarily works as a distraction in favour of the right. It sets young people and older people at odds with one another, wasting energy and creating division while the true causes and beneficiaries smile from the sidelines waiting for their media share dividends. You can see it continually doing so in endless mainstream clickbait op eds that are built around it.
A story in favour of young people that points out that 80% of them are likely to be disadvantaged or worse by current arrangements that work for around 1-5% of the population is my preferred option. I think we have two major misunderstandings of inequality currently going on. On the one hand, a massive underestimation of how wealthy people over 50 or 60 are. Understandable from the point of view of a young person renting (probably from an older landlord), for whom owning a weatherboard free standing bungalow with a garden is just a receding dream. On the other, a massive underestimation of how seriously rich about 5% of the population are and how little they pay their way. The intergenerational argument tends to ignore the latter and add fuel to the former. Let’s face it, any news report or doco that went around documenting how people in top wealthy suburbs live would be piled on as a “class war, politics of envy document. But maybe that supports the argument that, you have to use intergenerational just as trojan horse to bring the issue to the table.
Oops. Meant “Massive overestimation of how wealthy people over 50 or 60 are.l Here I am adding to the problem…
And lets not forget if you had I think it was 2 million in assets you can come on down.. welcome to education, multiple homes to own.. Then if you question this you are labelled some ugly racist 1.5 million coming in in 5 years.. fine but only if there are enough health services and roofs over the heads of our existing population; you are not better simply cause you are young and think your are relevant cause you post on Tic Toc ya last inane thought bubble.. There was a time it was fun to look forward and to hero worship wisdom and experience for me. The arrogance of some of these young people fanatical followers is really quite scary
Agree, but AUstralia lie elsewhere is gong through a unique demographic period (for another generation) dealing with, not population, but the ‘baby boomer bomb’ with improved education, healthcare and longevity (last high fertile generation, staying in data longer).
Whether the political above median age vote or retirees, it’s a very diverse bunch socioeconomically, hence, solutions and needs are diverse.
However, one believes that there needs to be a mechanism of including high value houses in a pensions means & assets test (non home owners are at a real disadvantage), and taxing high income earners via super (who possibly took advantage of tax breaks on contributions from years earlier); many wealthy retirees are independent using shares etc. and pay income taxes.
More broadly, zoning and property types in Oz are barely fit for demographic purpose except to maintain high house prices, but creating a ‘moat’ or precluding lower income of any age group, e.g. observed in sea change locations where local &/or essential workers cannot afford to live, and are compelled to commute from local regions.
Further, is encouraging more relevant union outreach and monitoring of award compliance (minimum wage) for younger employees in sectors that are ignored i.e. where SCG super contribution guarantee, holiday pay etc. are not paid; for both local and overseas employees.
In the long run it will balance out demographically over the next generation and the population pyramid settles back to something more sustainable, inc. electorally where the above median age vote neither dominates nor is catered to by government.
Ok please go into any business these days and count the mix of ages.. women are invisible or sadly if they are taken out of context and reduced mis quotes by inference are then called vile names by all and cancelled or simply omitted. Like the women then being tasered by a young man without conscience or consciousness .. It seems witch trials are starting again in the millennial courts of I can cry too
I’m one of the oldies benefiting from Howard bringing in capital gains tax concessions AND Paul Keating introducting franking credits. The first should be gradually reduced to zero concession. The second (franking credits) should be limited to something like $10,000.
Grandfather all of Howard/Costello budget busting, vote buying exercises. The legislate a 5 year wind down.
I don’t disagree with the thrust of the article, but who would pay the proposed inheritance tax. I was in my 40’s when I benefited from two deceased estates. Isn’t that the demographic that the writer is saying needs financial help? Or have I missed something, and we are now talking about intergenerational “warfare” between under 35’s and 35-50 year olds.
Written by a 63 year old, who hopes not to be leaving an inheritance to his under-35 children any time soon.
It’s plain in enough in the article that the proposed inheritance tax is actually nothing more than a change to the definition of unearned income for plain old income tax, so it would be paid as a tax on the income of those receiving bequests. Why the author suggests a $500,000 lower limit before it would apply and only a 20% rate I do not know. Better and simpler to just count it with all other taxable income for the beneficiary and tax it accordingly.
I assume death duties would be paid by the estate as a whole, not by individual beneficiaries. They’d never see the money they didn’t get.
Oh of course he is from a property development business and of course would love to take the last of what we have left to leave a few lucky kids.. BS
Exactly, so your parents work all their life for the government to take a slice of inheritance that presumably would solve the housing crisis. Doubtful.
I can’t see the issue with “young” people moving to less populated area of the country.
It is happening, particularly out of Sydney. They are replaced, directly or indirectly, by migrants who are often better qualified and thus more likely to ‘make it’.
No more labels
Why is a bloke who does not understand that due to the fact his undergraduate medical degree was gained from a Ukiv Uni placed 1700 down the list; he gets hired by one of the multitude of profiteer middle men health clinics as a subcontractor G.P . Worst G.P ever employed by a bunch of blokes at head office off shore and in S.A who buy up current g.P private practices. The AMA have a lot of explaining why this business model perpetuates if only to line profits for the shareholders and not the Australian people? Why do they abuse the medicare payment blowouts. There expertise of the medicare pirates health clinic consortium is investments in car parking, and rental cars! anywho the “young migrant” has a job as a G.P and goes what he is an advocate for older people going into Aged care… join the dots.. A great source of private investment by the same multinationals moving into all public domestic ownership into property consortiums .. the young won’t challenge or understand and certainly the new immigrants are far more amenable to the interest groups at the top .. fewer and fewer.. once there were thousand s of record companies now that power is vested into the hands of 4 or five .. they are all playing golf in right wing think tanks
The people with commercial interests in CBDs certainly can !
I can. The jobs are in the more populated areas of the country. When young people move to less populated areas with lower job prospects they’re moving away from where the jobs are. As other people point out, this is a problem that we’re seeing happen at a more advanced stage in parts of the US – people such as emergency services staff, maintenance workers, teachers etc. who can’t afford to live in the areas where they are needed.
You are labelling Young and old when does young become old? Do they get kicked out when they have children and their teens are at home or when the woman is 45? and want to create a new role and need s to retrain but is stopped because a rich kid and has taken the job earmarked for her finished degree after 2 years out of the workforce > Do women even matter? Do young women realised older women are them in a few years?