Retirement
Young Aussies set to become even worse off
Today’s youth are in danger of becoming the first generation in memory to have a lower standard of living than their parents’ generation, new research has suggested.
Young Aussies set to become even worse off
Today’s youth are in danger of becoming the first generation in memory to have a lower standard of living than their parents’ generation, new research has suggested.
In a new study from the Grattan Institute, older Australians are spending more but simultaneously have higher incomes and greater wealth than older Australians three decades ago.
At the same time, living standards for younger Australians have not seen the same trajectory.
According to the study, the wealth of households headed up by someone under 35 has barely moved in the last 15 years.
The Grattan Institute called it “a myth that young people’s spending habits and lifestyles are to blame for their stagnating wealth”.
“This is not a problem caused by avocado brunches or too many lattes,” it continued, with younger people found to be spending less on non-essential items, such as alcohol, clothing and personal care, and more on necessities, such as housing, than three decades ago.
Young Aussies bearing brunt of government pressure
Despite already having less than the generation before them did, the Grattan Institute has outlined that younger Australians will be relied on to cover the costs of an ageing population.
Despite this, the number of 15 to 64-year-old Australians for every person aged 65 or older fell from 7.4 in the mid-1970s to 4.4 in 2014.
Projected to fall even further to 3.2 by 2054-2055, this means less workers to fund greater age care costs.
Solving the problem
The thinktank highlighted the need for government intervention to ensure the next generation can continue to have a higher standard of living than the generation before.
“Policies to boost economic growth – such as tax reform, better education and smarter infrastructure spending – are wins for all, but especially for the young,” it explained.
It also credited ideas such as changes to planning rules and the encouragement of higher-density living in established city suburbs as credible in making housing more affordable.
And if the government is to provide young Australians with “a fair go” means “winding back age-based tax breaks for ‘comfortably off’ older Australians”, the report indicated.
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