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The Abbott Government and Intergenerational Warfare

Chifley staff writer JM Butskell* has this to say on intergenerational warfare… 

Just under ten months in to Government, just over two months since the Budget, and days after yet another botched effort on background to talk up Joe Hockey’s judgement and prospects, the Abbott Government is in such bad odour in so many quarters, it seems impossible to reduce it to one simple explanation. In that term so beloved of mathematicians and social scientists alike, their unpopularity is “overdetermined”. But one explanation seems to me more fitting than most, and it’s broad-ranging enough to capture most of the reasons. I think people have finally twigged that Abbott & Co are deeply engaged in a spot of intergenerational warfare.

Now by using that term, I don’t mean to say that this government has actually declared a proper war or anything – that’s not the way these things work. A declared war forces people to choose sides, muster forces, join the battle. No, like most of the political warfare practised by one segment of society against another, these things are always better when waged under cover of peace. But there is a generational war going on in Australia. It’s been going on for at least two decades – arguably longer. But since this government arrived, and more particularly since their recent budget, the peaceful mask has finally slipped just enough that it is impossible to ignore the real face underneath it.

For this we have to thank Tony Abbott and his ministers. They’re not good at artifice, bless them, and artifice was always going to be more and more important as the old steadily tightened their grip ever further on the commanding heights of our polity, our economy, and particularly our government budgets. A politician of John Howard’s wiles would have understood this and long ago have begun scrambling the political signal, probably with talk of the “contribution” of older Australians and dusty paeans to solidarity between generations – roughly the same way he used to practice the most bareknuckle racial politics while talking incessantly of how “the things that unite us are greater than the things that divide us”. Abbott has the adulation for Howard, but seems to think of that as his principal qualification for being Prime Minister. He has none of his mentor’s tactical flexibility. What’s more, he clearly doesn’t think it matters. He’s styling himself – as far as anyone can tell – as a Prime Minister to be respected for his toughness rather than loved for his beneficence, but if this turns out to be impossible it will be the question of the intergenerational contract that brings it undone.

 

Defining generational politics

Okay, so now let me explain. Like in most western countries, Australia has for approximately the last four decades been dealing with the huge demographic influence of the “baby-boomer” generation – the 4 million Australians born between 1945 and 1961. The demographic bulge was and is obvious enough to everyone, but what has been most striking is the cultural, political and economic dominance that have trailed along behind the demographics. It’s not for me to retail the story of cultural domination – it has been done much earlier and much better by Mark Davis in his seminal 1997 book Gangland (and to which this piece owes an enormous intellectual debt of gratitude). Let me instead talk about the politics and economics.

The politics are simple enough. No Australian government has won office from opposition since 1972 without winning the majority of the baby-boom demographic.

That majority (not all of them, by any means) has been moving rightwards for four decades: twenty-something baby-boomers handed victory to Whitlam in 1972 (as acres of agonising footage – all paisley, flares and sideburns painfully attest). They took it away again in 1975. More comfortably-padded thirty-something boomers found a way to mesh their materialism with nostalgia for the party of their youth by electing a more centrist Labor in 1983. In middle age, they discovered a liking for the social conservatism of John Howard, and an even bigger liking for his brand of redistribution (ie: towards them). They voted (but only barely) to extend this with Kevin Rudd in 2007 and then fled in horror (for a series of reasons) from the Labor Party in 2013. I strongly suspect they will never vote non-Tory again.

That’s all a caricature, and there is a clique of angry, ageing white men at The Australian who will tell you so. But that rather makes my point. Unquestionably, the baby boom generation has never been a monolith – not in their youth and not now – but as they have aged, it is not only their numbers that have moved decisively in favour of the Tories. No, it is that a particular subset of the baby boom generation – angry, ageing, well-off white men – has grabbed political and cultural power out of all proportion to their numbers.

Before I go any further, that assertion needs a few caveats attached to it.

Firstly, of course I recognise that not all of the clique currently in charge of our country are white, male baby boomers. There is one whole woman in the cabinet, for a start! Bits of that same cabinet are arguably Generation X. Alan Jones, Maurice Newman, Dick Warburton and a few others are even older white men. My point is that a specific demographic provides the political heft to Abbott’s conservatism, and whether it is in the cabinet, the supportive media, the business community or society in general, you will see that same demographic, most anywhere you look. Male baby-boomers are 12% of the Australian population, but a majority of the cabinet.

And before I start flinging the term “boomers” around too freely, let me add there is a strong class dimension cutting across the generational politics. My beef is certainly not with someone on an age or disability pension, just because they were born in 1946. Boomers generally enjoyed a pretty good labour market, but they were disproportionate victims of the early 1990s recession, and those scars persist for many today. And the world of work was a hard place for female baby boomers, who faced terrible discrimination and suffer the effects still.

The youthful idealism of the boomer generation gave us the social progress of the Whitlam era, and its consolidation under Hawke and Keating, and those achievements fundamentally reshaped our social contract for the good. There are a great many boomers who never lost that idealism and continue to fight the good fight today, and make common cause with older and younger generations in doing so.

My beef is with the subset of that generation who have come to instrumentalise its numerical dominance and distort public policy to benefit themselves.

Of course, you hear this narrative from the Right too. But for every complaint you read in the Murdoch papers about left wing baby boomers and their cultural power, it needs to be understood as cover for where the real power now lies in our society. Don Watson wields a fine pen, but he’s not a Cabinet Minister, he’s not chairing a government board, he’s not a CEO, he doesn’t edit a national broadsheet, and he doesn’t frequent the clubs all those people do.

Today’s angry old men were powerful under the Howard Government, to be sure. And they were pretty conservative then too. But they lived in a roughly balanced social and political ecosystem which they did not dominate and where facts, debate and discourse still mattered. As they have aged and become more powerful (and for some reason, more angry) they have created their own echo chamber, which reflects their own increasingly bizarre, fact-free opinions back at themselves.

It has been written elsewhere how Tony Abbott encouraged and exploited this toxic atmosphere to rise to power. Once PM, the angry old men seem to be the only people he has kept his promise to.

 

Generational economics

Which takes me from the politics to the economics. You don’t win these boomers if you don’t pay them, and the list of government policies over the decades benefiting boomers at the expense of the generations ahead of and behind them is long indeed.

Maybe as a member of congenitally miserable generation X, I feel this more acutely than most but the pattern is certainly suggestive:

  • Tertiary education was made free by Gough Whitlam shortly after the baby-boomers started studying at university. Once they were done, it became un-free again.
  • Capital gains tax was brought in around the time the boomers’ parents began liquidating some of their assets, but it was halved once boomers were more likely to be in that situation themselves.
  • The boom in property investment over the last decade or so had the effect of pricing many young homebuyers out of the market while the returns (and associated generous tax concessions) went to wealthier, older investors.
  • When private health insurance membership started to look too small to sustain the growing costs of an ageing baby-boom generation, younger people were forced into the risk pool through lifetime community rating.
  • As the boomers neared retirement, obscenely generous superannuation tax concessions were offered to help the wealthier ones move assets into their lightly-taxed superannuation accounts.
  • The huge gap between retirement and health expenses on the one hand and projected tax revenues on the other presages higher taxes for future workers to pay for future patients and retirees. If that wasn’t enough, younger generations face a possible long drag on asset and equity markets as the boomers progressively liquidate their holdings to pay for their retirement.
  • Meanwhile, meaningful action on climate change was delayed (quite probably fatally) for more than a decade and a functioning response to it has just been snuffed out by a government and commentariat, both wholly-owned subsidiaries of the boomer generation.

 

The 2014 Budget

But as this summary shows, I’ve been putting up with this for a long time. Why should it lead to a brain explosion now?

Well, principally the 2014 Budget. Let me give just two examples, one very specific and one more general.

 

Attacking the young unemployed

The specific example I want to cite is the extraordinary, unprovoked, savage attack on the young unemployed – not a big line item in its own right but emblematic in so many ways it needs to be singled out.

If you didn’t know the real reason for the budget measure restricting unemployment benefits for the under 30s, you would probably do yourself a serious brain injury trying to understand it. There is not a skerrick of policy research or advice you will find anywhere on the planet – not even from those wingnuts at the IPA – that will give you a policy rationale for this. It cuts young people off benefits when they need them most, inexplicably puts them back on benefits for six months, then equally inexplicably pushes them off again. As far as I can work out, it aims to keep the genuinely marginal in some kind of welfare/unemployment purgatory until their 30th birthday comes around to relieve them of the stigma of being young and unemployed with the relatively tender mercy of being labelled early middle-aged and unemployed – probably by then unemployable.

This evil bit of scapegoating is being visited on young people at the very same time an “austerity” budget finds $10,000 per person to spend on job placement incentives for workers over 50 (this being enough – incidentally – to pay a week’s Newstart for 40 young unemployed people).

So let’s stop torturing our brains trying to understand the policy and soothe them with the cool logic of politics. As a few people have pointed out, this is gesture politics at its most evil and gratuitous. It is a policy only the prostatariat could love – people who think (exactly, but exactly, like their square parents in the 1960s and 70s) that today’s youth are lippy and indigent and need a good kicking.

It’s unconscionable. It will cause real and likely lifelong scarring (the policy research will tell you this) for thousands of young Australians and all to win a gouty cheer from Andrew Bolt and his ilk.

 

Attacking the young, coddling the old

But more generally, the budget was a systematic assault across a united front against the young and in favour of the old. Even The Australian’s ageing goons note (in their case, approvingly) the weight of cuts in this budget falls on younger Australians but just a few in case they needed recapping:

  • $30 billion cut from education;
  • Climate change programs gutted;
  • Deregulation of university fees;
  • Higher HECS debts for university students;
  • Family benefits cut.

Now a lot of people will say “ah, but they’re hitting pensioners too, it’s not just young people”. Well they are and they aren’t, and this very case is worth exploring:

The pension age is being raised to 70, but you’d have rocks in your head if you thought this would apply to baby boomers. The pension age starts rising from 2017 under a policy of the former Labor government. But the leading edge of the baby boomers has long qualified for the pension by then and in fact the full measure only captures people born after 1957. The Tory measure hits the same people – last few years of the baby boom – not perfect, but no social engineering is. But don’t think this carveout isn’t deliberate.

Secondly, yes the indexation of the pension steps down from average earnings to CPI after 2017, but two things about this: one, pensioners will lose about $10 a week in three years’ time and the discounted cash flow of that today is small indeed, and certainly nothing like losing $500 a fortnight from next year, as the young unemployed will do.

But secondly, Tony Abbott has been very careful here to institute the changes to pensions the other side of the next federal election (a courtesy he has not extended to his broken promises to the young) and I would lay serious money on his backflipping these changes on the eve of that election. Indeed, he has almost invited the pensioners to stop him.

It is true that older Australians will be hurt – and disproportionately – by the Medicare copayments and the health cuts. They have been fairly well-targeted at lower income people and hence unlikely Tory voters, but the pain will be there.

Meanwhile, let’s see if we can find a big-spending, fast-growing program that’s been left entirely untouched: I’m speaking of course of superannuation tax concessions – specifically, tax-free super for the over 60s (announced, you’ll be shocked to recall in 2006, barely 12 months after the first baby boomers turned 60). This set of tax concessions is turning into the cane toad of the federal budget – it is probably the fastest-growing expense, and in three years it will exceed the cost of the age pension. (Remember, the idea of this rort was ostensibly to relieve pressure on the age pension. Satire cannot compete with reality when it exceeds the cost of the policy it was designed to relieve).

A final point before I leave this budget. It represents of course a further full-scale retreat from any action on climate change – whisking away most of Greg Hunt’s little figleaf of direct action with a further cut, and slashing renewable energy funds, agencies, programs, you name it.

I’ve used the term “generational warfare” a little too loosely in this essay to date, because if anything merits the description, it is this. None of Abbott, Hockey, Hunt, Bolt, Jones, Plimer or other assorted climate knuckle-draggers will be around to pay the price when they turn out to be wrong about the climate science. They will be worm food. I will be too. But surely now is the time for a new rule in Australian public discourse. If you are over 40, and you don’t believe in addressing climate change, no-one cares what you think. You shouldn’t have the gall to speak on the subject. You won’t pay for the consequences of your opinion and hence that opinion isn’t worth the carbon dioxide you will expel in expressing it. Find some willing sap under 40 to say it for you if you like, but otherwise, please just shut up.

 

Conclusion – a new contract

But after such a depressing read-out on the state of the intergenerational contract in our country, let me come to an important political point: this generational assault has been launched from the most unimaginably slender of political bases.

In most countries in the world, that might not matter. Australia’s compulsory voting system is a rarity. Retirees in Florida can starve that state’s universities of every last dollar if they like – it’s a voluntary voting system; the old vote; the young don’t. History is made by those who turn up.

On the other hand, I don’t know much about the Belgians, but they strike me as sensible people and being one of the very few other countries in the world with compulsory voting, I doubt they are silly enough to allow roughly one-quarter of the voting population to pillage the other three-quarters.

Australians shouldn’t put up with it either. We certainly don’t have to.

So here is my pitch. There are many social justice issues in today’s Australia, but let’s orient ourselves around two of them – poverty alleviation for all, and ending generational exploitation in our country.

So let’s protect the age pension – in fact let’s reverse Hockey’s indexation cuts, but let’s also massively tighten the income and assets tests so asset millionaires can’t claim a part-pension.

Let’s slash superannuation tax concessions for the wealthy and claim that money for better priorities.

Let’s abolish the private health insurance rebate and put it all into public hospitals that serve everyone.

Let’s realign capital gains tax with marginal income tax rates and stop the giveaway to the asset-rich, mostly older, Australians.

Let’s abolish negative gearing at the top end. Wealthy boomers don’t need others’ taxes subsidising their Weekenders.

That’s just a start. With that money, let’s reverse the attack on the young unemployed, reinstate the cuts to the Gonski school funding model, remove the Medicare copayment, properly fund the National Disability Insurance Scheme, reverse the higher education cuts and HECS indexation changes, restore the cut indigenous programs and others from renewable energy to combatting climate change.

The generations now being victimised are considerably larger in electoral terms than the generation doing the victimising. To repeat, in a compulsory voting system, this cannot stand.

There is an opportunity here for the Labor Party to recapture the mantle of the future – rebrand itself if it wants to as New Labor or Labor Re-born with an unambiguous message that we stand for social justice for all ages of Australians and crucially social justice between different ages of Australians.

Yes, it is an appeal with hip-pocket resonance for Australians under 55, but actually, it is an appeal for the whole country – for a solidarity that rewrites our intergenerational contract on a fairer, more sustainable and more future-oriented basis.

That’s not just something to appeal to young Australians, I fancy it’s something to appeal to the idealists from 1972 and their hopes for the future of the country – paisley shirts and sideburns and all.

*http://en.wikipedia.org/wiki/Butskellism

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