For the first time in a long time, we’re setting up a generation to be worse off than the one before it



The avocado latte is indeed a thing, but young Australians are spending less on luxuries than they used to, while older Australians are spending more.
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Kate Griffiths, Grattan Institute and Danielle Wood, Grattan Institute

We’ve become used to each new generation of Australians enjoying a better standard of living than the one that came before it. Until now. Today’s young Australians are in danger of falling behind.

A new Grattan Institute report, Generation gap: ensuring a fair go for younger Australians, reveals that younger generations are not making the same economic gains as their predecessors.

Economic growth has been slow for a decade, Australia’s population is ageing, and climate change looms. The burden of these changes mainly falls on the young. The pressures have emerged partly because of economic and demographic changes, but also because of the policy choices we’ve made as a nation.

Older generations are richer than before, younger ones are not

For much of the past century, strong economic growth has produced growing wealth and incomes. Older Australians today have substantially greater wealth, income and expenditure compared with Australians of the same age decades earlier.

But, as can be seen from the yellow lines on this graph, younger Australians have not made the same progress.



The graph shows that the wealth of households headed by someone under 35 has barely moved since 2004.

It’s not young people’s spending habits that are the problem – this is not a story of too many avocado lattes (and yes, they are a thing).

In fact, as the graph below shows, while every age group is spending more on essentials such as housing, young people are cutting back on non-essentials: among them alcohol, clothing, furnishings and recreation.



Wage stagnation since the global financial crisis and climbing underemployment have hit young people particularly hard. Older people tend to be better cushioned because they have already established their careers and are more likely to have other sources of income.

If low wage growth and fewer working hours becomes the “new normal”, we are likely to see a generation emerge into adulthood with lower incomes than the one before it.

It has already happened in the United States and United Kingdom.

Our generational bargain is at breaking point

Budget pressures will exacerbate these challenges.

Australia’s tax and welfare system supports an implicit generational bargain. Working-age Australians, as a group, are net contributors to the budget, helping to support older generations in their retirement.

They’ve come to expect that future generations in turn will support them.

But Australia’s population is ageing – which increases the need for government spending on health, aged care and pensions at the same time as there are relatively fewer working age people to pay for it.

Demographic bad luck is one thing (some generations will always be larger than others) but policy changes are making the burden worse.




Read more:
Expect a budget that breaks the intergenerational bargain, like the one before it, and before that


A series of tax policy decisions over the past three decades – in particular, tax-free superannuation income in retirement, refundable franking credits, and special tax offsets for seniors – mean we now ask older Australians to pay a lot less income tax than we once did.

Disturbingly, these and other changes mean older households now pay much less tax than younger households on the same income.



Added to this have been substantial increases in average pension and health payments for households over 65.

It has meant that net transfers – government benefits minus taxes – have dramatically increased for older households but not for younger ones.

The overall effect has been to make current working Australians increasingly underwrite the living standards of retirees.



A typical 40-year-old today contributes much more towards the retirement of others through taxes than did his or her baby boomer predecessors.

As it happens, it is also more than the typical 40-year-old is contributing to his or her own retirement through compulsory super.



This can’t be what Australians want

Most Australians want to leave the world a better place for those that come after them.

It’s time to make sure we do it.

Lots of older Australians are doing their best, individually, supporting their children via the “Bank of Mum and Dad”, caring for grandchildren, and scrimping through retirement to leave their kids a good inheritance.

These private transfers help a lucky few, but they don’t solve the broader problem. In fact, inheritances exacerbate inequality because they largely go to the already wealthy.

We need policy changes.

Reducing or eliminating tax breaks for “comfortably off” older Australians would be a start.




Read more:
Migration helps balance our ageing population – we don’t need a moratorium


Boosting economic growth and improving the structural budget position would help all Australians, especially younger Australians. It would also put Australia in a better position to tackle other challenges that are top of mind for young people, such as climate change.

Changes to planning rules to encourage higher-density living in established city suburbs would help by making housing more affordable.

Just as a series of government decisions have contributed to the challenges facing young people today, a series of government decisions will be needed to help redress them.

Every generation faces its own unique challenges, but letting this generation fall behind the others is surely a legacy none of us would be proud of.

It’s time to share the burden, and perhaps an avocado latte while we’re at it.The Conversation

Kate Griffiths, Senior Associate, Grattan Institute and Danielle Wood, Program Director, Budget Policy and Institutional Reform, Grattan Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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PAKISTAN: PASTORS ARRESTED FOR USE OF LOUDSPEAKERS


Police claim amplified Easter Sunday service defamed Islam.

ISTANBUL, May 27 (Compass Direct News) – Nine pastors from two neighboring villages in Pakistan could face prison time for using loudspeakers to broadcast prayers and sermons from their churches on Easter Sunday.

Martinpur and Youngsnabad, 150 kilometers (93 miles) east of Lahore, are majority Christian villages. The nine pastors who lead congregations there say that local Muslim security forces have twisted the law to solicit a bribe.

Police arrested and detained Hafeez Gill, Fahim John, Maksud Ulkaq, and a catechist from the Catholic Church in Youngsnabad identified only as Saqab at 10 a.m. on May 16. While en route to the police station, the officers told them they would be released if they offered a bribe, according to the Centre for Legal Aid Assistance and Settlement (CLAAS). The pastors refused and were detained, but following a public outcry from their parishioners they were released at 2:30 p.m.

Reports indicate the arrest was premeditated. A leader in the village council invited the pastors to his house for a meeting, but when they arrived in the morning local police were waiting for them.

They were taken to the police station, where Station House Officer Mirza Latif showed them two First Instance Reports (FIR) registered on May 11 claiming they had misused their speakers. The FIRs, however, state the pastors misused the speakers on Easter Sunday, which happened nearly a month earlier.

The FIRs accused the pastors of misusing their loudspeakers under Section 3/4 of the Amplifier Act. Their attorney said the reasons for their arrest were both religiously and financially motivated.

Police claimed that the church leaders had used their loudspeakers to amplify messages defaming Islam. The FIRs, however, make no mention of the content of their remarks.

“The police wanted to cause humiliation to the pastors and were also asking for money,” said CLAAS attorney Akhbar Durrani.

The case was registered by a special branch of local police forces charging the four Youngsnabad pastors. On the same day, they filed charges against the five pastors in Martinpur: Shahazad Kamarul-Zaman, Mumbarab Kuhram, Hanuk Daniel, Amar Sohail, and a fifth pastor unnamed in the police report.

Nasir Bahatti, president of the Youth Welfare Association in Youngsnabad, a Christian social organization, said the church had permission to amplify the service and that the arrests were religiously motivated.

“There is no reason to ban the loudspeaker,” he said. “They are banning our worship and prayer. But we have permission [to use them] on particular days such as Christmas and Easter.”

If the FIRs are not withdrawn, the pastors will go to court over the alleged loudspeaker violation. Police released them from jail on May 16 under the condition that they obtain bail at an upcoming hearing.

The church loudspeakers broadcasted the church prayers and sermon for villagers unable to attend the service, as is custom in some Christian villages. Pakistani law limits the use of loudspeakers in Christian worship services to a specific time allotment (and usually to villages and towns with a small Muslim population), but these restrictions were not enforced in the almost-entirely Christian villages of Youngsnabad and Martinpur.

Few such restrictions, however, are placed on Pakistani mosques. The five daily calls to prayer, Friday sermons, and Quran recitations on Islamic holidays are frequently amplified on loudspeakers. The double standard follows a traditional Islamic dictum in which church bells were not allowed to ring in areas under Islamic rule.

“The Muslims in this nation can worship according to their prayer method, so why can’t we if we are all given equal rights?” Bahatti said.

The standard of living is relatively high in these villages due to a well-educated population. There are longstanding missionary schools in the villages, and much of the population has lived abroad. English missionaries founded Youngsnabad and Martinpur 120 years ago during British colonial occupation.

Some rights groups worry that the harassment of Pakistani Christians in villages such as Martinpur and Youngsnabad could mean deteriorating conditions for religious minorities in areas once considered secure.

CLAAS reported that vandals completely ransacked a church in Bannu Cantt, in the North West Frontier Province, on May 12. They destroyed the altar, burned Bibles, and broke pews. Although the city is located in a province that borders Afghanistan, where Taliban rebels have been active, it was thought to be a relatively secure area, according to the report.

Pakistan remains in turmoil as the military moves into Swat Valley to uproot the Taliban, which has established Islamic law (sharia) in the embattled area. An estimated 2 million Pakistanis have become refugees by fleeing the area after a government evacuation order.

Report from Compass Direct News