Pay up, you tight-fisted geezers

Caption: At what point does “Spending the Kids’ Inheritance” become “spending their future”?

It?s an old saying (by me) that everyone wants the gummint to do something, but nobody wants to pay for it.

Western society has come to rely on government services, from cradle to grave. But those services have to be paid for. By taxes. As the post-War demographic bubble floats above retirement age, that means that fewer workers will be asked to pay more taxes to fund those sweet, sweet gummint handouts.

As comedian Shaun Micallef?s game show, Talkin? ?bout your generation showed, playing on intergenerational resentments is easy fodder. But, as the young are increasingly smashed with demands to pay out for indolent oldies, it?s going to get a lot nastier than just the odd bucket of goo dumped on someone. Quote:

The torrent of public money sprayed at residential and home care providers ? more than $18 billion this year and rising rapidly ? isn?t sustainable without crushing increases in income tax on younger generations.

If those generations aren?t ?resentful yet, just wait until the baby boomer generation ? the richest in history ? starts turning 80 en masse across the next decade and costs go through the roof. The share of the population aged over 65 is poised to rise from about 15 per cent to 23 per cent, or nine million people, by 2054, ?according to the intergenerational report.

It?s time to ask whether the 6 per cent share of aged-care costs users pay is fair. Taxpayers stump up the rest. End of quote.

Generous government subsidies inevitably draw the shonks and grifters like flies to a dead cat. Quote:

Because so much of the cost has been pushed on to taxpayers, the money has been ravaged by fees. ?Typically for a $49,500 package for someone with high care needs, there will be a 20 per cent administration fee, then a 15 per cent case management fee, and then up to a 100 per cent margin on the cost of actual service, so in many cases well less than half of the package is actually spent on the cost of direct care services,? says Jeff Gilling, an aged-care consultant. End of quote.

Recent media investigations have unveiled shocking abuse at some aged care facilities. It?s beyond dispute that something must be done. But that ?something? invariably means ?money?. Money that no-one wants to pay for themselves. Quote:

Bizarrely, only the first $167,000 of the value of the home is included in the asset test for ?receiving support for residential care. For home care packages, there?s no asset test at all?why should homes worth millions be shielded? In a world where wages are sluggish and asset prices have soared courtesy of no one lifting a finger, it?s a morally and economically ?absurd situation.

Even after a good decade in ?retirement, the average net wealth of the over-75s is well over $1 million, ?according to Australian Bureau of Statistics data. End of quote.

A few years ago, I interviewed a financial planner who ruefully recounted how their aged clients were obsessed with ?gettin’ the pension? when they were sitting on millions of dollars of assets that would easily fund a comfortable retirement. Quote:

?Incomes may be low for over-65s but home ownership is very high and rarely taken into account in assessments of means. End of quote.

The biggest problem will be making reforms fly, politically. The ?Me? generation has never been backwards in coming forward, often with their hands out. This is, after all, the generation who demanded free university, then denied the same largesse to their descendants. Quote:

Politically, putting extra costs on the most politically powerful group in society, baby boomers, will be challenging?The desire to pass on wealth to one?s children is understandable, but why should families without much wealth subsidise such ?bequests? end quote.

?Fairness? is the political buzzword of these times. Without a doubt, any attempt to shift the burden of aged care will be greeted with a great gnashing of dentures and shaking of Zimmer frames, but one must ask: what, exactly, is ?fair? about asking the asset-poor young to pay for the comfort of the asset-rich old? Quote:

In fact, allowing family assets to contribute more to the cost of aged care in an era when living to 90 is common will probably be the 21st-century version of estate taxes, among the fairest and most ?efficient form of taxation. Personally, I?d much rather put off paying tax until I?m old or dead and needed the money far less than I did. End of quote.

Before lampooning bullying tennis players, Mark Knight spurred controversy with a cartoon showing a young couple leaving for work, and ?waving goodbye to their dependents?: a crowd of oldies, unemployed and disabled. Politician David Leyonhjelm upset even more apple carts by reminding his ?fellow mature Australians? that ?We are not entitled to an age pension merely because we have paid taxes all our life…Let?s save for our retirement and keep pensions in the charity basket?.

When Bismarck introduced the welfare state, few lived long past retirement age. Today, people can expect to spend nearly half their lives not working.

And like I said, no-one wants to pay for it.