Expert's bold claim that boomers are to blame
An expert has claimed that baby boomers have “won the intergenerational lottery”, while young Australians continue to struggle to make ends meet.
Chief economist for the MB Fund, Leith van Onselen, shared new data to support his claims, as he said governments have continuously favoured the older generations and neglected the financial needs of young people.
The economist believes boomers have long had the upper hand in terms of taxes, wages, and house prices, and are completely unaware of their financial privilege.
In terms of homeownership, van Onselen wrote for news.com.au that boomers were “lucky” to break into the housing market when house prices were still achievable.
He said, “Baby Boomers have the highest home ownership rate in Australia and were lucky to have gotten into the market while houses were still reasonably priced.”
“They then enjoyed the rapid appreciation of home values, while younger Australians have been priced out.”
He continued, “They mostly own their homes outright and are largely unaffected by rising mortgage rates or rent increases.”
“Some Boomers are even benefiting from soaring rents, as they own a large chunk of the nation’s investment properties.”
Van Onselen also discussed the spending habits of everyday Aussies, citing data from the Commonwealth Bank that shows how many young Australians halted spending in the face of the cost of living crisis, while baby boomers did the opposite.
He said, “According to an analysis of seven million CBA customers’ purchasing habits, spending per capita for all age groups under 55 fell relative to the rate of inflation in the year to March 2023.”
“Australians aged under 35 increased their spending by only 3.4 per cent in the year to March, which was less than half the rate of inflation.”
“This means that the average young person is buying fewer goods and services.”
He continued, “By contrast, spending among the over 55s climbed at a faster rate than inflation over the year to March, with CBA customers over the age of 75 increasing their spending by approximately 13 per cent.”
The economist said that this drastic change in spending habits within the older generation has directly impacted inflation rates, as well as interest rates that continue to rise.
He said, “Therefore, the older generations are driving Australia’s household consumption and are helping to push up house prices, which has forced the RBA to respond with higher interest rates – which is negatively impacting younger Australians with mortgages.”
Van Onselen summarised his claims by stating he believes that “Older Australians also look to have tightened their stranglehold on the nation’s homes.”
“To the Baby Boomers go the economy’s spoils.”
He concluded his claims by taking aim at a common argument that the older generations use against younger Aussies who are struggling financially, as he wrote, “Now watch on as they eat smashed avocado toast.”
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