There was a fiery exchange between two readers in the comments section of one of Australia’s news websites this week which provided a handy snapshot of the generational fault line in the debate over interest rates and the cost of living.

Cartoon: Tom Jellett.

It’s a battle which is being fought between older Australians who have paid off or almost paid off their homes and who have a vested interest in the banks jacking up rates, and younger Australians who are mortgaged to the hilt, with both partners working to cover the mortgage, the bills and childcare, for whom every single-point increase in interest rates is a body blow to the family budget.

This divide has been widened by the actions of the Commonwealth Bank and the ANZ in overshooting the Reserve Bank’s official cash rate and stumping for controversial interest rate hikes. It has also been fuelled by the stated intention of the Reserve Bank itself, in trying to encourage more Australians to save, rather than getting themselves saddled with debt. As a result, for every angry 30-something or 40-something mortgagee who is fuming about the bastardry of Ralph Norris and Mike Smith, there’s a guy in his late 60s who’s planning a fortnight away in the caravan with his wife, saying: “Thank you, fellas.”

This is because when the banks raise interest rates, they also generally raise deposit rates on savings. For all the talk about the lack of competition between lenders, and the stranglehold the big four banks enjoy over mortgages, there is a much higher degree of competition within the savings market. So the oldies who have a bit tucked away, who are already benefitting from this competition, cash in again when interest rates go up on deposits. In addition, many of them rely on super schemes which hold blue-chip bank stocks, and they love the fact that the banks make mega-profits which keep the share price high. 

In the comments section of The Australian this week, a couple of readers representing both generations went toe to toe on this issue.

A reader by the name of Bill Banter, presumably an older fellow, stated that the problem with so many members of the younger generation was that they wanted to have everything, and that saving was no longer regarded as “cool”.

This was the response from a gen-X reader, Bemo. It’s worth quoting in full as it encapsulates the sense of frustration which this generation feels at the attitudes of the oldies.

Bill Banter, it isn’t that saving is “uncool” as you term it, it’s that it’s near impossible for anyone with kids and a mortgage to support. I’m very tired of smug old baby boomers who were privy to cheap and plentiful housing, government-owned utilities (cheap electricity, gas, council etc) free university and plenty of job availability. They didn’t need seven years worth of annual salary to be able to afford today’s houses, and I’m talking modest 3 bed 1 bath, not boxy pseudo “mansions” 40k out of town, nor did their normal bills virtually double over 2-3 years due to privatisation. They also didn’t need two adults working just to put food on the table. People like this have no idea of the financial stresses of trying to keep things afloat, they did it in a slower, easier time. Save the self-righteous judgements for when you’ve walked in the same shoes as those who are today propping up your negative-geared rental properties and your access to government pensions at exceedingly generous asset terms.

As a member of Bemo’s generation, there are many elements of his email which struck a chord with me. Thinking back to thirty years ago, the number of mothers in part-time paid employment was negligible compared to today. Mothers in full-time paid work were largely non-existent. It partially reflected the dated gender expectations of the time – I can recall conversations whereby mums would declare that they had decided to work a couple of days a week to give themselves something to do, or to earn what was patronisingly called “pin money”. But it also reflected the fact that money was not as tight then for young homebuyers as it is now.

These days most couples under the age of 40 are forced to work out of the crushing economic reality of servicing a mortgage which, as Bemo writes, represents a much higher proportion of average earnings than it ever has.

One of the more galling features in the Gen X-Baby Boomer divide is that all the really hard decisions about our economic future are being put off so that the post-war generation doesn’t suffer any downside. There’s a pretty obvious hint from the title of the 2020 Report on our ageing population - in that none of the life-altering policy changes will be adopted before that date, such as the proposal to increase the retirement age to reflect the fact that we’re living longer, healthier lives than ever before.

The boomers will dodge that unpleasant little upheaval in their autumn years. It will fall instead to the gen-Xers – which is probably a good thing, as our homes are so damned expensive that we’ll need to work until we’re 70 anyway to pay for them, which is something our older friends might care to think about before they toodle off in the caravan.

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    • Steve_of_Cornubia says:

      10:14am | 14/11/10

      Once again, I don’t recognise either of the sterotypes used for Boomers or GenX’ers. On the one hand, as a Boomer myself, I clearly recall the hardships my wife and I endured for the first twenty years of our marriage, both of us working while we raised our children. I remember the sacrifices we made, most of all the lack of any real social life, as there simply was no money left over for ‘going out’. A holiday, if we had one, was camping or a cheap seaside caravan.

      The GenX’ers I know, OTOH, may well complain that they are just as skint as we were, but I frankly can’t see the evidence. Typically, while they are bitching, they’re calling the gardener on their iPod, to remind him to cut the grass, or polishing the 300kW Commodore in the drive (I had little time to polish my car as I was usually underneath it, coaxing more life out of the poor thing).

      Comparing mortgages or grocery prices simply doesn’t tell the story. Houses WERE cheaper for us (as a multiple of the average wage at least), but then again, most other things were more expensive. The only real measure of who’s really doing it tough is to look at lifestyle, and there the GenX’ers have us Boomers well and truly beat. Just look around. Our first kitchen comprised a cooker and a fridge. Now, the average kitchen (no matter who owns it) includes a dishwasher, microwave, coffee-maker, range hood, giant fridge/freezer with computer-controlled icemaker, etc, etc.  We owned ONE second-hand car (I rode to work through hail and gog an a moped) while nowadays, even those with young families have two cars, often one of them something large/4WD/fancy.

      No sorry GenX’ers. You can still afford a decent home if you otherwise live the way we did, i.e. with nothing else.

    • Gottakloo says:

      12:15pm | 14/11/10

      I’m a Generation X and would generally agree with you. I think GenX should stop whining.

      Nothing is going to change.

      Houses won’t get cheaper because the things that will make them cheaper (high-density development close to the CBD and transport) won’t happen because bogans and NIMBYs don’t want that.

      Interest rates will return to their normal 8-9% as the economy recovers. Stop whining about interest rates. That’s how it is.

      I accepted these things and dealt with them. I got an education and got a well-paying job. I’m a lawyer and looking to make a move into finance/banking. I knew that to navigate the world I would need a lot of money so I pursued that.

      The world isn’t going to change to suit you. You have to change to suit the world.

    • Sandy says:

      04:02pm | 14/11/10

      I was born of the cusp of Boomer and Gen X. The thing is Steve. You were brought up surrounded by the save now buy later message.  I got it too. But later Gen X go the mixed message of save mixed with ‘spending is good for jobs’. It even got to the extreme that Rudd handed us $900 and told us we must spend it and that saving it was BAD for the country.  Are you telling me that we’re supposed to have ignored the collective weight of government and corporate Australia who peddled the ‘spend’ message through advanced advertising and saturation media?  What were you doing to reduce the correct impact of the ‘spend’ message? My guess is: nothing.  And my guess is that your job, and hence your lifestlye, benefitted from it.

    • Gannik says:

      07:53pm | 15/11/10

      Steve, I’m an X’er and I certainly don’t have a 300Kw Commodore, coffee maker, range hood, and a giant fridge freezer with computer controlled Ice maker… My wife and I have just managed to buy a 3 bedroom 1 bathroom house in the outer suburbs after previously living in a 2 bedroom unit. We drive a 90km round trip to northern Sydney each day in a slightly unreliable 15 year old sedan. We are only having one child, as we can’t afford to have a second child in Daycare, but also cannot afford for my wife to give up her work to be a full time Mum (which would be our dream.) But at least our son has a small yard now to kick a ball around (even if it backs on to a main road.

      You don’t have a monopoly on “doing it tough” but personally, I think we have been blessed to have a room over our heads, no matter how hard the grind is some days.

    • Sam_the_Man says:

      12:14am | 16/11/10

      Just thought I’d point out Steve, that an iPod is a music playing device so it would be pretty tough to give the gardener a call on one!

      Also, you’ve contradicted yourself - the increase in cost of house prices far outweighs the savings from cheap kitchen appliances…  Great!  By using the $50 saved by not buying a coffee maker I can now afford a $400,000 home!

      Not.

    • John C says:

      10:19am | 14/11/10

      This is a good article.

      I am a boomer and I have to say that it is a selfish generation. We put our parents in nursing homes because we can’t be bothered to look after them; we demand that government caters for our every need notwithstanding the cost to the generations after us; we think our 60s lifestyle was the be-all and end all and we continue to try and reproduce it - is there anything more frightening than to see aged boomers dancing in the aisles at a concert by some 60s star, themselves ageing.

      I am willing to bet that conditions in nursing homes are going to drastically improve as the boomers start to need them, assuming of course that they are unable to gullt trip their kids into looking after them.

    • grandma says:

      11:02am | 14/11/10

      John, have your family put you in a nursing home? I have already told my family to put me in a home, they don’t have to care for me. In my mid-50’s I already have major health problems and I don’t want them to be tied down by me. The average life span of an adult female in this country is 80 plus, you can’t expect 60 year old to look after you. I have worked in Aged care and I’ve known children in their 70’s visiting their parents. How can you expect them to care for their bed-ridden, high care parents at home.

    • Jane 2 says:

      11:10am | 14/11/10

      As an ageing boomer John you may not have sufficient health or energy to look after your parents. There’s a growing older category who unnecessarily feel guilty because they don’t have 24/7 strength to look after old(er) people.  I have an 80 yr old mother, a 94 yr old father and when there’s a crisis, I am almost ready for a nursing home myself.
      I don’t believe boomers are selfish.  We worked damned hard, we went without, some of us experienced two foreign wars, and we paid our debts.
      If you are an older person in Australia and have a shower over your bath, our government will send someone to show you how to sit on a bathboard from which you risk falling and breaking a hip.
      If you are a person seeking refugee status after leaving safe haven Indonesia for the economic largesse of Australian taxpayers, our government will provide you with re-furbished accommodation, a nice walk-in shower and safety installations for fear they would be sued for providing sub-standard conveniences.

      We should be thinking more about how we keep ourselves and parents in our own homes with as much support as is given to refugee claimants, than feeling guilty because we worked so damned hard to pay our very ordinary homes off, educate our kids and pay our taxes.

    • Jenni says:

      10:21am | 14/11/10

      I can see both viewpoints - as a 37 year old single woman, I struggled to get finance from the banks to purchase a house, and was EXTREMELY lucky to find a very cheap ex-government housing property at a great price. It’s a bad suburb, and a tiny (only 2 bedroom) house, but at least it’s “mine”. 8 years after purchase, i look at the market, and I could never afford to buy a first home now, I simply don’t have the income to support the mortgage required.

      *However* despite what Bemo says, there are a lot of younger couples (not all, obviously) who DO want everything ... they want the brand new, 4 bedroom plus study, 2 bathroom, with thetre room, plus landscaping, white goods package, etc etc. Some young people take out the largest mortgage they can afford, then act all surprised and hurt when interest rates rise and they sudden;y CAN’T afford it any more! Instead of starting off small, and working their way up to something nicer and larger, they want it now.

      I have a large group of friends in the age bracket that is classed as “Gen X” and I would say - from personal experience - that more fit the above description than not.

      As for boomers “having it easy” being able to afford a home on a single income, you have to remember the types of homes they were buying. My parents first home was a converted water tank on an empty lot! Dad worked long hours on the railroad to support the family while they built (themselves) their first house on that lot. They started small, and as dad’s income increased, they moved up to bigger and better things.

      Yes, it’s a different world now - I do believe it IS harder to afford a first home, but it’s not quite as impossible as many people make out IF you are prepared to start with what you can actually afford.

    • southernX says:

      01:10pm | 14/11/10

      Jenni - the house is only ‘YOURS’ if you have paid off the mortgage.  Otherwise you are just renting from the Bank.  If you became unable to pay the mortgage, you would lose the house.

      I get very annoyed at the failure of media and homeowners alike to correctly reflect what position the vast vast majority of people who bought a house are in - they are not OWNERS.  They are part owners at best, locked renters at worst.

    • Bruce says:

      02:48pm | 14/11/10

      southernX: A mortgage can sometimes feel like rent, but unfotunately your definition would not stack up in a law court. You have a mortgage the property is YOUR responsiblity and you own it, while ever your in order with your repayments. Once your repayments are ‘not in order’ it then becomes the lenders problem as well as yours.

    • L. says:

      04:39pm | 14/11/10

      southernX says: “.“Jenni - the house is only ‘YOURS’ if you have paid off the mortgage”.

      It’s pretty obvious that’s what Jenni meant by typing “mine”...complete with little ““‘s.

    • Heather says:

      10:54am | 14/11/10

      Our first house, which we bought in 1977 in a rural city cost us $25,500. My husbands wage at the time was under $2,000. My wage for the same work was less (because I was a woman). When our first baby arrived (no baby bonus) I couldn’t work (no child care, subsidised or otherwise) and we had to make do (no family allowance). Our furniture was second, third or fourth hand. Even the mattress on the bed had belonged to a family member. We’d been married 10 years before we bought a brand new lounge suite, and I can still recall the excitement. My marriage broke down after 30 years, and I walked away with just enough to buy a house. I will never be financially secure, no holidays for me but I’m happy and thats the most important thing.

    • notSue says:

      11:07am | 14/11/10

      It’s the percentage of annual income to purchase the average home which provides the best comparison. Not sure of the figures, but I’d be very sure it costs a fair bit more than it did 30 years ago when I bought a hu-hum suburban home. I’m a Baby Boomer( just) and I can see and concede the dificulties younger folk have now. We’re not all selfish and living in the past…. but I can still rock on with the best of em and will continue to do so until they carry me out, ta very much! haha!

      Seriously though, an ageing population does put a burden on the younger gen, but it has been ever thus. Some would say we more senior members of society deserve some consideration as we age, seeing we helped to build the economy for all those years we worked…and many still do,and may well continue to do, as the available workforce decreases
      Peace.

    • Sam Birmingham says:

      11:59pm | 15/11/10

      Not quite figures from 30 years ago but 1960 numbers provide an interesting comparison:

      “Back in “the good ol’ days”, the average hourly wage was $1.08 and the average mortgage was $4,620. Nowadays, the average hourly wage is $30.04 and the average mortgage is $283,000.
      What does all that mean? Whereas it only took about 7,500 hours of work pay off the average mortgage back in 1960, to do the same requires over 19,000 hours of work today.”

      http://www.webe.com.au/the-economy/two-sides-the-interest-rate-debate

    • iansand says:

      11:57am | 14/11/10

      Don’t forget the benefits - yes, benefits - of raging inflation.  Remember wages went up too, but you were repaying a pre inflation borrowing.

      You over-committed yourself and struggled for 6 months or a year but by then your salary had risen but your repayments stayed the same.  After a couple of years you had enough equity in the first house to by an investment property, and you were on your way.

      Much harder for Gen X with inflation under control.

    • cedric says:

      12:17pm | 14/11/10

      Being a battler meself,  no electricity here, on our selection, (i got a diesel genx), mostly dust, spinifex,  snakes and lizards, and the odd lost boomer dazed and disoriented from thirst. You blokes have got it good I reckon eh. We lived on goannas and tubers, warrigal greens and pigweed, an we did ok mate. Well me and the missus and kids got a a lot of dingo scalps at the time an sold them to the goverment, as well as doin some work for me nabors. Well we saved up a bit, enough to by some timber to build a better shack without rain comin through the roof, an enough to send the kids to hi school, something i never needed i reckon. Well the kids did ok, one is a trader with one of them 4 pillar banks, must be a shortage of pillars I reckon. Me an the missus make do with 2, maybe 4 on anniversaries. The other lad turned out to be a gambler, reconed he could make money in neutral, negative gear or something. Hes back home, that will learn him. well, youse jokers oughta learn if you dont put in any work, an be a bit humble, thank the good lord for what you got, an try to do better for your nabor, you aint gonna go nowhere eh.

    • marley says:

      05:44pm | 14/11/10

      Cedric -love your work.  The Pythons would be proud.

    • Amy says:

      01:06pm | 14/11/10

      In the GFC, the people who lost the most were those who rely on their savings to survive.  The lowered interest rates hit their savings hard, and very few of them benefited from the stimulus payments offered (particularly small business owners who had very little income and thus were able to recoup their tax). 

      Over the next decade, the Baby Boomers will start to retire.  There are more of them than any other generation.  If they cannot fund themselves from their savings into retirement then we, the taxpayers, will have to take that responsibility.  Thus, it is in the best interests of the economy of this country for the Baby Boomers to be able to fund their own retirements and not rely on Commonwealth funded pensions.  Lowered interest rates make this really difficult.  Why is this so tough to understand?

      If you can’t afford the house you live in, move.  If you can’t afford to have another child, don’t have one.  If you can’t afford to take a holiday, stay at home.  That’s why there are two children in my family, we grew up in a modest house in the suburbs and we never went on holidays, yet my Baby Boomer parents paid off their house with 17% interest rates.  It’s not rocket science, it’s called prioritising.  Learn.

    • Bruce says:

      02:54pm | 14/11/10

      Do not borrow what you can not afford or live comfortably on.  To many young people want what their parents have “now” which may have taken them 30 years to own.

    • Markus says:

      04:53pm | 14/11/10

      Amy prioritising doesn’t even come into it when house prices are rising at 10% a year compared to 2-3%, or even stagnant, wage incomes.

      My parents built a 4 bedroom house for about $175,000 15 years ago, it is now worth $700,000.
      I would kill for 15% interest rates if it meant being able to find a 3 bedroom house in this city below $400,000.

    • Lostie says:

      11:26am | 15/11/10

      Markus -

      (Assuming Sydney) Your parents built a house in a city of about 3.2 million you are looking for a place in a city of 4.5 million people.

      Simply put - demand has grown. Supply hasn’t matched that growth. Increasing supply now will depreciate the value of existing homes with the potential to create a situation where some mortgages relate to premises that aren’t worth enough to repay the amount outstanding. Then you’d see some Australian banks go to the wall.

      P.S - I purchased a house a couple of years ago and I can tell you that it hasn’t increased by 10%. Recent valuations suggest that it has increased in value by less than 1 percent over 4 years. I’m sure some suburbs have grown that quickly (due to low interest rates encouraging people to borrow more), however, it’s certainly not universal. I would also suggest that the suburb that you are talking about has changed in demographics over those 15 years which also increases value of the house.

    • fairsfair says:

      01:42pm | 15/11/10

      @Lostie - my parents have similar story to Markus - paid $48k for a three acre block and $200k to build an extrememly large house in 1992. It was 30km from any shops and work. They did sacrifice convenience, but it is now paying off. The neighbours just sold on half the land, much smaller house for close to a million. The nearest “city” is Cairns. Population in the low 100ks and stagnate for many many years due to the failing tourism industry and market deregulation.

      I’m sorry - though demand does come into it - it isn’t everything.  Convenience cannot be sacrificed any more because we physically can’t travel any further for work. Even here, an average home is $300k two hours out of Cairns.

      My parents first house was $24k purchased in 1977. My dad was a diesel fitter and a couple of years into the mortgage his wage jumped to $50k. Can you see how easy that would have been to pay off even at 17% interest rates? They then sold it for $110k in 1991. That is a 459% increase in 14 years. I paid $230k for a 2br duplex last year. Will Gen Z be interested in buying that off me in 2023 for $1 055 700? I sure as hell hope not, because if my street is the million dollar row in 2023 the world will be a sorry place indeed.

      I don’t doubt that everyone has it tough at times for various different reasons. The Australian housing market is a joke.

    • Joolz says:

      03:15pm | 14/11/10

      Boomers really don’t get how easy they had it. University was impossible to get into in Queensland in the early 1990s so I went part-time external. I was very lucky to inherit some money but it was too much to blow on a holiday or car, so I bought a unit - a tiny ex-housing commission number in inner north Brisbane for $65k.

      I worked full-time ($21k), studied part-time ($300 a subject) and paid my $30k mortgage at 17.5%. Sometimes I had only $10 a week for food.

      Burned by that experience, I sold the property before the 2000 boom, and put the money away. When my husband and I bought a house we were just at the beginning of the GFC. I liquidated most of my cash assets, he liquidated all of his but we still have a huge mortgage. Our goal is to pay it off sooner rather than later.

      Come the change of government, we now find that we’re considered high income. Fair enough that we’re told we don’t deserve FTB A. But over the three Swan budgets, we also didn’t deserve the baby bonus, medicare safety net and my husband’s salary package has attracted more tax.

      And we’re expected to wear the rising costs of water, rates, power and food.

      We can do all that. That’s fine, but what Swan started, Stevens compounded and Norris ... well he just turned the knife.

      Meanwhile back at the cedar table on the deck, the recently retireds sit with their fur children, no dependents, no mortgage and no job. They can earn $70k from their retirement savings before they start to lose govenrment entitlements - and these enttilements are expensive: access to the PBS being the most disgusting (child of a pharmacist, don’t argue with me because I helped my father dispose of the left over drugs when the old ladies died), discounts on utilities, some insurance and the odd night at the leagues club.

      So when a Gen-X feels a bit like they’re on struggle street - but they’re earning $100k a year or their family income is $170k a year - they’re as bemused as the Boomers about this very strange situation. After all, we earn quite a lot of money.

      I don’t think Gen-X is whinging, but just saying could you please spread the load a little more fairly, please?

    • Steve_of_Cornubia says:

      09:30am | 16/11/10

      @Joolz

      Well, you clearly weren’t there when I was a newlywed in the 70s, because university was as attainable for me then as a trip to Mars. When I left school at 15yo, I considered myself lucky to get an apprenticeship paying four pounds a week, half of which I handed over to my Mum as ‘keep’.

      And just as university was another world to me, the thought of buying a house on one wage in the 70s was ludicrous. Unless you were truly wealthy, we all accepted that two wages were needed to get a deposit together and make the repayments.

      I eventually put myself through university in my 30s, at my own expense, while working full time and raising two young children. The cost and effort very nearly killed me.

    • David says:

      04:15pm | 14/11/10

      Okay I am a boomer. I paid my own way through university - part-time. I had a job which involved being shifted around rural areas at the whim of my employers. I was never able to buy a house because I was locked into sub-standard rental accommodation belonging to my employers. The education of my children suffered in sub-standard rural schools. A car was essential because there was no public transport but we still looked on it as a luxury and used it as little as possible. We made do with second hand or home made clothing and without elaborate presents.
      My children (Gen-X) have all gone to university, one has a doctorate and two have dual degrees. They did not get government assistance at any time. They have mortgages on very (and I emphasise very) modest housing. They use public transport where they can. Apart from the mortgages they are living within their incomes and even saving a little. It is not easy. It was not easy for me.
      We all look in wonder and some envy at those who have even 3 bed 1 bath plus car type lives. We are astounded by those who run to even more than that - 4 bed, 2 bath, patio, 2 cars plus whitegoods beyond ‘fridge, washing m/c and, our luxury, a computer that now allows me to do a little work from home.
      We do not drink alcohol or smoke and we might eat out twice a year.  We do pay health insurance and, apart from that, we manage. We are paying off the debts incurred by education and hard work to benefit people in rural areas.
      There are many other “boomers” and “gen-X” ers like us.
      Those of you who want to complain sit down and work out how much more you own and have than your parents or grandparents. The reality is that you believe a lot more is now essential. Perhaps it is for you - but it also costs more to live like that. What is more the boomer generation are doing a lot of unpaid baby sitting for Gen-X’s children - often at considerable cost to themselves. I suggest people start to think this through rather than call boomers selfish.

    • Lisa H. says:

      05:16pm | 14/11/10

      We hear a lot of how how the relative prices of houses has increased,
      I would be interesting to compare the full costs of living and how they compared to wages… and also how the tax take compares.
      Has bracket creep given the government a windfall at our expense?

      The sheer size of the Baby Boomer generation means that changes to retirement payments, age of retirement etc should have been implemented many years earlier.
      I feel a lot of Gen-X (particularly small business) is really struggling under the burden of our current tax system, but there is no end in sight.

    • hot tub political machine says:

      05:28pm | 14/11/10

      Pretty simple isn’t it? Which is the moral choice? To take away someone’s extra cash from their savings or to take away their hope of ever owning their own home?

    • Tom says:

      07:31am | 15/11/10

      Neither, just take away their PS3s, iPods, plasmas, iPads, hair extensions, botox’s, overseas trips and WRX.s

    • Steve_of_Cornubia says:

      08:58am | 15/11/10

      @Tom

      Wot you said.

      Also, take a walk through and shopping mall these days and have a peek inside the flash hair salons, manicure parlours and massage parlours.

      See how many Boomers are in there having $200 hair do’s, $100 manicures or hour-long massages.

      Now look around again. Who is carrying Billabong bags? Who is buying the $200 shoes? See that trolly loaded up with electronics from JB - who’s pushing it?

      As you leave, play ‘Spot the WRX STi’. Pricey little beasts that also cost two limbs to run. Try to spot a driver under 30. Lastly, play ‘Spot the Corolla’. Cheap to buy and cheap to run, chances are the driver WON’T be under 30.

      GenX or GenY, it seems that, these days, the amount of whingeing a person does is directly proportional to their disposable income and how many toys they own.

      Meanwhile, the malls are chokka with working families, doing it tough as they struggle under the weight of their shopping.

    • Tim says:

      10:04am | 15/11/10

      Steve,
      you’re joking right?
      The answer to most of those questions would be 50-60 year old men and women.
      Change WRX to Falcon XR6 Turbo or Holden HSV and you’d be even closer.

      I don’t like the consumer lifestyle either, but to claim that Boomers are somehow more frugal is bullsh*t.

    • Steve_of_Cornubia says:

      10:58am | 15/11/10

      @Tim

      No, I’m not joking, and I challenge you to do the ‘mall walk-through test’ I’ve outlined. Most of the people sporting $200 hair and $100 nails will be under 46 - the minimum age to be classified as a Boomer.

      And let’s not forget that many GenX’ers are struggling financially simply because they’ve got kids to support - I remember how skint we were at the same stage. This is a normal situation and in no way proves that GenX’ers are somehow doing it tougher than Boomers.

      I bought a boat last year. Nothing flash, but good enough for me. I’d wanted one for thirty years. As I organised the finance in the bank, the 28yo (or so) yound chap sorting it out for me wistfully said, “There’s no way I could afford a boat.”

      My reply was, “Well I hope you don’t have to wait till you’re 55yo, like I did.”

    • Tom says:

      01:14pm | 15/11/10

      @ Steve_of_Cornubia, you are missing the point. Years ago, baby boomers went without these things to afford a home. Why shouldn’t the Gen-X’s do that now? They can buy all the mindless consumer goods they want when they are in better financial shape.
      Steve, do you get it?  .... on second thoughts, don’t worry. Keep up with your stupid envy rants. They amuse us all.

    • Tom says:

      01:22pm | 15/11/10

      @ sorry Steve, I misread your post. I am eating humble pie, brother.

      @ Tim, Baby Boomers went without years ago. That is why they can afford mindless consumerism today.

    • Tim says:

      02:30pm | 15/11/10

      Sorry Tom,
      but that is just as bullsh*t as Steve’s comment.
      Read The Real Dave’s comment below.
      All this crap about Boomers going without or being frugal with their money is crap. I know plenty who, whilst having 4 or more children, still managed to afford 4-5 bedroom houses on one average wage.
      To achieve the same these days you would need two people earning 100K + each.
      If you think it was tough to have to save to afford a house worth 2-3 times the average wage, try doing it when average houses on tiny blocks are worth 8-9 times average wage.

    • JoC says:

      09:02am | 15/11/10

      As a gen Xer I’m as sick of baby boomers moaning about how hard they had it in the ‘good ole days’ as I am of cashed up gen Xers complaining they are poor in their million dollar homes and SUVs.  Of course there are people who don’t fit the sterotype - and it’s nice to hear their stories of bucking the trend.
      It would be great if this debate could move to something more positive and creative - Gen Xers have a great opportunity to do something different to solve the conditions they have inherited.  Transition Town communities, cohousing and high quality, higher density housing and community gardens could all be part of the solution to expensive housing and costs of living and the social isolation that is inevitable when working flat out to pay for stuff - why is everyone trying to live the baby boomer dream and getting stressed out and depressed in the process???? Not to mention scewing the planet.
      Hopefully as boomers retire (and dare I say it pass on and stop voting for self serving policies - eek!) , the economic, political and social structures of our communities will become more supportive of different approaches.  The early adaptors are doing it already - can we have some articles about them please!!  ! I want some inspiration not this intergenerational competition for the who’s the biggest victim of circumstance!

    • Jose says:

      09:10am | 15/11/10

      The last few years of interest rates at historical lows are now a thing of the past.  If you borrowed to the max now is the time to downsize because rates are heading in a northerly direction for a few years yet.  It’s called the economic cycle.

    • Andrew says:

      09:38am | 15/11/10

      Perhaps Baby Boomers just don’t have any sympathy for Gen X because they don’t really perceive their complaints to be valid. Baby Boomers paid far higher interest rates on their mortgages than what is being offered now. Add to this the fact that the average house bought by a Baby Boomer was smaller than the average house bought by a Gen X’er despite the average Boomer having more children and it is pretty easy to come to the conclusion that Gen X are merely complaining about a problem that really is of their own making. If people just learnt to live more modestly and within their means I think they would find that a interest rate in the mid 7%‘s is actually quite managable compared to one in the mid to high teens that were seen through the 80’s

    • Ryan says:

      02:49pm | 15/11/10

      @Andrew: a two bedroom flat is not modest? Well I never! I don’t know too many Gen-X ers and Zero Gen-Y’s that can afford even a two bedroom flat.
      Now lets look at the reason why Andrew, the reason why is because you boomer types are pushing up the house prices with your investing and carrying on. Remove negative gearing and see how smug these pathetic boomers will be.
      I have a solution for you Gen-Xers, take your money, pool it and buy retirement villages, then gradually shove the prices up until you squeeze every last cent out of those greedy boomers.

    • Chris 74 says:

      04:34pm | 15/11/10

      This debate about the average house size being bigger for GenXers is not fair. But maybe this points towards the real issue,....population. House sizes are bigger now because we have so many people being forced to live in McMansions in McSuburbs that are rolled out by property developers who build big houses because they can get more profit that way. These new suburbs are allowed by our planners who are under pressure to keep up with society’s growth.  Therefore, isn’t the problem really an issue of too much population? So if the ‘modest’ houses are not available or affordable because of too much competition why say GenXers ‘choose’ to buy big houses?

      We now have many people wondering about signs of Australia not being able to keep up with growth. We need change. But hang on, doesn’t it benefit the people with the money to keep growing because they get richer? Who has the most money in society at the moment? Boomers? If you have cash to invest maybe you invest it in a company that makes profit out of housing. Seems like crappy a loop to me, but hey, I’m just a whinging Xer.

      It seems too simplistic to me to blame the generation before or after us. But at the moment the facts are there are people taking advantage of opportunities to make money by exploiting investment in housing.  It’s hard to be critical of someone who makes a ‘smart’ investment though.

    • Sandy says:

      09:43am | 15/11/10

      See my earlier post.  The thing is Boomers.  Who was sending the mixed messages to Gen XY?  I.e. save but spending is good for jos and the economy.  I’ll help you with the answer - the boomers did.  Why did you do it.

      Oh and my parent are in their 80s.  I.e. not boomers. But push their agenda like Boomers do. I had to confront them about using the expression SKI (spending the Kids Inheritence). Don’t absolve your guilt by pretenting it’s someone else’s money. It’s not.  It’s YOUR money and you can do whatever you want with it.  But you wear the consequency. Non of these mind games to try to justify your actions to the later generations to hedge your bet that there will be enough $ left in your super to get you through.

    • Grumpy says:

      09:49am | 15/11/10

      Cant you all shut up!..both your generations suck, you failed us and we will have to clean up your mess. Gen Y and our children will be far worse off! Thanks for nothing losers!

    • jose says:

      11:48am | 15/11/10

      Seems to me you accept that you are the loser, not us!  Work harder, like we had to.

    • Anjuli says:

      10:15am | 15/11/10

      When we married in 1954 in the UK the first house was a 1 bedroom terrace with a living room ,a very small kitchen so small i had to use the draining board for the kitchen bench.The bathroom was a bath and the toilet with just enough room to walk in and out.we had hot and cold running water which was bonus as we were both brought up in colliery houses with just cold water in the back kitchen over a what was then known as a slab sink. The house cost us 535 pounds our wages were 7.50pounds weekly for my husband and I earned 4 pounds a week .We didn’t think we would ever own a 3 bedroom place with all the mod cons but we next bought a house that had never seen any thing done to it since it was built in 1938. That was in 1960 we upgraded the place after 13 years in that house we came to Australia and bought a 3 bedroom place for $19,000 ,which we worked and did without luxuries till it was paid off in 9 years as the interest rate were rising too quickly for my liking.By then we had 2 girls ages 8 and 5 we had never had holidays like they want now just the camping and rented caravan .The girls are now both in their 40’s but after 56 years of marriage we have had only 2 overseas holidays .The children on the other hand want it all big house ,holidays , then wonder why they get into strife if the husband loses his job ,like what happened in my family.We are still in our small house which we raised the girls in so don’t have to downsize ,we have always resisted the urge to go into big debt,which is hard to do when you see all the adverts for every thing from big homes ,cars and the like.So if you want a big mortgage and you don’t factor in interest rate rise of 10% you will suffer the consequences ,remember when they went up to 16% when Keating was in government.

    • RG says:

      12:40pm | 15/11/10

      Anjuli
      I am sure that this was not your intention but you have actually proven the Gen X’ers point!
      You purchased your first home for less that one years income (7.5 +4 x 52 =598 vs cost of 535). Assuming one and half lots of todays average (male fulltime) wage is $99k, todays comparison would be a house for around $88k. Most first home buyers would crawl through broken glass to buy a one bed terrace for that price.

    • Steve_of_Cornubia says:

      02:04pm | 15/11/10

      @RG

      No point proven mate. Your argument is too simplistic.  It doesn’t rellay matter what houses cost as a multiple of average wages, because mortgage payments are only one item in the family’s budget.  Yes, houses were ‘cheaper’ in the 70’s and 80’s, but interest rates were much, much higher and just about everything else was more expensive, too.

      The only reliable measure is to compare lifestyles, i.e. look at what Boomers had IN TOTALITY when they were raising their kids and compare that with what GenX’ers have (or expect to have) at the same stage of life. You will find that most GenX’ers have much much more than we Boomers had. The real problem is, most GenX’ers don’t know how to live on a budget, like we Boomers did.

      For instance, look in any supermarket. See that HUGE freezer full of frozen meals, ready to microwave? Do you know why they stock so many these days? Now look in JB Hi-Fi. Marvel at the range of TVs and ask yourself why most of the people buying 60” plasmas have families.

      By way of comparison, it took me and Mrs Wife six months to save up for our first video recorder (Betamax) and we were so chuffed when we bought our first stereo music centre that we invited all our freinds round to see it….......

      Oh, and my parents had even less than we did. Circle of life and all that - kinda. However, as newlyweds sitting on second-hand furniture staring at the place where the fridge will go when we could afford one, we didn’t bitch about it because we accepted that you got wealthier as you got older.

    • Tim says:

      02:41pm | 15/11/10

      Steve,
      seeing as mortgage repayments are by far the biggest budget item don’t you think it’s a bit silly to simply discount it’s affect?
      And comparing lifestyles (or technology) these days to previous generations is silly. I’m sure your parents would have been amazed at your new fangled Betamax video machine.
      Try and get a job these days without high level computer skills.

      I’ll swap you your high interest rates for a house 2-3 times average wage any day of the week.

    • Steve_of_Cornubia says:

      09:23am | 16/11/10

      @Tim

      So GenX’ers have XBoxes, iPads, iPods, in-car DVD players, 3D TVs, surround sound systems, etc, etc because it helps them develop IT skills?

      I would laugh, but I suspect you’re serious.

    • Tim says:

      10:16am | 16/11/10

      Steve,
      Advances in technology mean lifestyles have changed, the same as they did for your generation compared to your parents.
      My point is that saying people don’t need IPods or DVD players is the same as your parents saying you don’t need a video player or a microwave or your grandparents saying you don’t need a car or an electric stove. Do you get it?

      You still haven’t answered the main point about house prices but I didn’t think you would seeing as it totally destroys your argument

    • Steve_of_Cornubia says:

      04:26pm | 16/11/10

      Tim

      Who said people don’t need iPods? Not me, but go ahead and misquote me if it helps your argument. I care not who has iPod/iPads/DVD players, but the presence of all of this stuff in most homes, including the supposedly skint GenX’ers, shows that they’re not as skint as they claim to be.

      As for me somehow misinterpreting what you said about technology, I will remind you of exactly what you said:

      “And comparing lifestyles (or technology) these days to previous generations is silly. I’m sure your parents would have been amazed at your new fangled Betamax video machine. Try and get a job these days without high level computer skills.”

      If you weren’t linking the use of these things with developing IT skills (daft as that premise is), then what WERE you saying?

      Finally, I keep saying that house prices alone do not prove or disprove that Boomers are greedy or had it easy compared with GenX’ers. So a larger proportion of your wages goes to service the mortgage than was the case for me (arguably), but that does not mean life is tougher for you because what matters is the TOTALITY of living expenses. The only real way to compare is to look at lifestyles and disposable income (that’s the bit left over after you’ve paid the mortgage, car payments, utilities, HP on various household appliances, food, petrol, insurance, etc, etc.) It is very clear to me that, based on how the average Boomer lived when they were newly married and raising kids, compared to how GenX’ers live at the same life stage, you guys have it easy compared with us. OK, you don’t save like we did, but that’s because you can’t resist replacing your iPod II with an iPod III and most GenX’ers wouldn’t be seen dead in a car over ten years old.

    • jf says:

      10:26am | 15/11/10

      “These days most couples under the age of 40 are forced to work out of the crushing economic reality of servicing a mortgage which, as Bemo writes, represents a much higher proportion of average earnings than it ever has?

      Forced? I’m a Gen X’er with a young family. We are on a pretty good household income (more thanks to my wife than me).

      We currently rent a house that suits us. It costs us $3,200 per month. If we were to buy that house the mortgage would be $7,200 per month. Perhaps if property prices went down by 30% we would re-think our position.

      The returns on the deposit (what would be equity on the home) are not far short of the rent, more if the economy remains strong and shares keep going up.

      Instead of owning and choking under the weight of the mortgage and the expenses of maintaining a home, we go on two overseas holidays a year (one with the kids one without). I reckon the kids will remember the overseas trips far more fondly than our house - although it has to be said it is a great house.

      There is plenty of time for us to buy a house but maybe we never will.

      Sure there are downsides to renting but, for us, the benefits of renting far outweigh the negatives.

      We all make our own decisions. There is not dignity in whinging about a situation that you find yourselves in that is entirely of your own making. It makes me laugh when people make snide remarks about the number of holidays that we have particularly when they could be doing the same thing.

      You don’t have to own a house. However, if you must, don’t whinge about it. It is undignified and embarrassing to you and everyone around you.

    • mark says:

      11:00am | 15/11/10

      It’s not the levels of interest rates that are the problem, it’s the levels of debt and financial mismanagement, maybe that’s the wrong word, but there’s not many people asking questions. They accept the current situation as a new paradigm and leap into housing head first. Few people seem to recoil from paying an insane price for a house.

      Where I live houses have increased 350% in the last decade. When I look back further, prices never behaved in that way. So something seems a little out of order and this can only continue if the next guy in is prepared to take on an even higher level of debt than the previous guy.

      You seem to have no problem believing prices will stay ridiculously high, Penbo. Before the last round of rate rises there were reports of high levels of mortgage stress, how far are these people away from default? We’re spending $1.60 for every dollar earned and there’s 60k of private debt for every man, woman and child. There will come a tipping point and things will get very cheap again.

    • Anna C says:

      11:19am | 15/11/10

      It is depressing to know that as a 37 year old single woman I will probably never own a home (apart from maybe a studio dog box).  I earn an average salary and all I want is to be able to buy a small 1-2 bedroom / 1 bathroom home; nothing fancy.  I have a healthly deposit but will probably never be able to borrow enough to buy a house.  In the early 1990’s I could have bought a 3 bedroom house in the Inner West for less than $200,000 but I didn’t.  It doesn’t seem fair that because of timing I will never be able to afford a house, meanwhile people who did will keep getting richer.  It is not like they earned the money.  What also bugs me is that especially in the Inner West you can no longer find small houses.  All the houses that used to be small have been renovated within a inch of their lives to become a 4 bedroom palace with a $1 Million + price tag.  No wonder young people are being priced out of the market.

    • Ironside says:

      12:26pm | 15/11/10

      Its not just the interest rates that are the problem its everything else.
      Its all well and good for holier than thou types to say don’t borrow more than you can afford but the reality is that is bloody hard to do. I took out my first mortgage 10 years ago at 10.5% I had budgeted to get as high as 15% before I would be forced to sell. Since then rates have gone down a lot and that was good, up a bit that was bad. I have moved house a couple of times, I now have a much nicer house in a much better area for about the same mortgage I used to have, I have also had 10 years worth of wage increases, and you know what, there is not a chance is hell I could make 15% now, even 10.5% would be hurting. Why? Utilities, rates, tax, fees, levies, food, petrol, everything has increased at higher than the cost of inflation. My electricity bill for the last quarter was hundreds of dollars more expensive than it was even 2 years ago. My food bills have increased by 50-100 dollars a week in spite of cutting back and buying more homebrand stuff. My fuel expense has gone from fifty dollars a week to 80 dollars a week in spite of driving less km and downsizing from a V6 to a 1.8L small car. You know all those wonderful schemes that sound so good in the paper, where the government will cut back on carbon emissions and it will only cost the average household 200 a year, how many times do you read about that in the paper. Not to mention rates, council regularly revalue’s my land (usually when they are having budget problems) and it always goes up, no matter what the bank or real estate agents think my house is worth. This causes my rates to increase. That’s not even looking at the increases to medical expenses, childecare/Schooling costs or anything else.

      So you boomers who paid 90k for your house stop winging, fuel was 20c a litre, food was cheaper and you never heard of the term carbon tax. As bad as it is for a Gen Xer like me I pity the Gen Y and younger guys. I got established before all this environmental stupidity started costing money, those poor families in their early 20’s can only hope and prey and mortgage themselves to the hilt.

      Oh and one other thing. I am sick of self righteous types referring to McMansions have you actually tried to build a house in the last decade? No? How about the last 30 years? Thought not. Project and kit homes are actually the least expensive method of building a house. Yea some people get talked into spending more than they can afford, but usually because the don’t take into account all those government projects which will only add 200 a year to your taxes, well 10 of those in a year across local state and federal governments adds up to 2000 a year, not to mention inflation that’s where people get caught out, not interest rate rises

    • TheRealDave says:

      12:28pm | 15/11/10

      My parents (Boomers) built our family house in the early 80’s. Big 5 Bedroom plus study, plus rumpus, plus family room, 2 bathrooms, formal dining, meals room etc on a 1/4 acre in a suburban area just opened up for development in southern brisvegas. I was the oldest of 4 boys and we all went to private school and once the youngest was in about grade 3 mum went back to work part time, only going full-time 10 years later (when they split up). This was also at a time of 17% interest rates and I saw plenty of houses in our area get big notices of repossession plastered across the front door, one house actually got done twice in two years!

      The reason why I mention it is because my old man was a Digger. A busted arsed Sgt at a time when the Australian soldier was one of the lowest paid fulltime jobs in the country. A time when CO’s were actually telling their soldiers to get out and get part time jobs to supplement their shitty incomes. But even on his shitty income, the only income we had for a number of years, we still had a brand new big house, valiant regal in the driveway (don’t laugh, it had a 318 in it and 5 slot mags:p ), we all played footy, we all got a decent education and we all ate 3 squares a day and had decent clothes to wear.

      To be fair, I am not sure what kind of family allowance we would have every received at the time, but it wouldn’t have been much. Undoubtedly the greatest benefit we had was the fact we had Private Health cover due to the old mans cover through the ADF - not that we ever used it to my memory.

      You show me anywhere in this country where a low income earner, and when I say low income earner I am talking about those at the median and under in terms of wage and not that ridiculous ‘average wage’ mythical figure that gets bandied about, can support a family of 2 adults and 4 kids in a brand new 5 bedroom house (that you own not rent) on 1/4 acre block 20 clicks or less from the city centre, pay for private school, kids sports, a car, clothes, food etc on a single wage today.

      Thats right - you can’t. Not even close. Hell, families with two wage earners are struggling even with the lowest rates in history. I hear this ‘McMansion’ crap, and thats what it is - crap! We aren’t buying ‘McMansions’ - we are buying YOU’RE bloody houses you lot are selling up and gallivanting the world/country with!. I bought my oldies place, at fair market value mind you, and what cost them $75 000 back in the early 80’s didn’t give me much change from around $400k.

      Geez, I would have loved to had a free university education, instead of the crippling debt university graduates now get when they graduate IF they are lucky enough to get a full-time job that pays enough to require them to start paying back that debt. I’d love to be the only full-time worker in my house so that my missus could stay home with the kids. I’d love to be able to take my kids to after school sports and on weekends but am unable to due to both of us working.

      And this is before we even think about factoring in the overwhelming amount of tax we are haemorrhaging on a daily basis. When Boomers we heading out into the world they paid nowhere near the amount of tax we do. From straight income tax to GST to the other hidden taxes like your toll roads, speed cameras, red light cameras, various ‘levies’ etc we all know the ones I mean. Then we get private companies bending us over like the banks with their plethora of fee’s and fines in order to increase their $6 billion dollar profits.

      So yes, I am not a huge fan of the boomer generation, to be honest, especially when they crap on how ‘hard’ they had it….puh-lese! You got it easy!

    • Steve_of_Cornubia says:

      09:37am | 16/11/10

      I’ll keep saying this. If we Boomers had it so easy, why did I leave school at 15 to start an apprenticeship? Why were we sitting on second-hand furniture? Why was I working two jobs? Why did we have only one old car? Why did I ride to work on a battered old moped? Why did we stay in every night? Why, having been made redundant, did I spend two years sawing up asbestos roofing sheets in rain and snow (UK) to avoid losing the house? Why, when we went to the chip shop, did we have to share one portion of fish and chips?

    • Trevor says:

      12:31pm | 15/11/10

      The article observes that double-income families used to be rare. One of the great ironies here is that house prices have accelerated because it is now virtually *expected* that the mortgage will be serviced by two incomes.  (And tough luck if you don’t have two incomes to hand)

      I’ve previously seen some very interesting writing about the options that the move to double incomes could have provided, financially. For example, one option was to pay off existing mortgages faster.  But society as a whole moved towards higher prices and bigger mortgages.

      Partly because the banks told us we could do it. When I bought a house 6 years ago, I was frankly alarmed at how much money the banks were willing to lend me.  And now I watch the news and I’m alarmed at what they define as an ‘average’ mortgage.

    • Richard says:

      12:54pm | 15/11/10

      People keep talking about this outrageous real estate bubble is if its a permanent fixture of life these days. What nonsense, hasn’t anyone been paying attention to what’s been happening in America and Ireland and Spain etc.? Our property bubble will burst as well, I don’t know when, but I suspect its already started.

    • Cranky ol' Bugga says:

      01:01pm | 15/11/10

      I and my partner at the time bought our first home around 1969 for $15,500. It was an 1882 inner-city dump, and we took 2 mortgages at 9% and 10% for 3 years. It was ‘solicitors finance’ as it would have been pointless applying for a bank loan.
      To get on the property ladder we had to economise on every thing; and I mean everything! Food costs were pared right down, no phone, no new clothes or shoes, and entertainment was painting, plumbing and plastering. I think about 2 thirds of our income went towards the mortgages.
      It was all well worth it ultimately and, yes, I have been mortgage-free for a long while.
      How many Gen X & Y’s would be prepared to make anything like those sacrifices to get on the property ladder?  Not very many I expect.
      There are ways to do it today, just do your research, and dont expect to start off with a 5br mansion in Mosman. It might be an old 2br fixer-upper in Merrylands to start with…...

    • TheRealDave says:

      01:43pm | 15/11/10

      And whats the price on buying a house in Merrylands nowadays? Let me check a real estate site…brb….

      And back again, after 3 minutes…

      http://www.realestate.com.au/buy/by-ggdcwf/list-1

      So, you can get a unit from anywhere between $250 000 to $400 000 or a 3 bedroom house from anywhere between $400 - $550 000.

      Now, how good is that $15 500 inner city ‘dump’ looking now? 9 to 10% on $15 500 sounds a lot better to me than 5% of $400 000 odd.

      Even better, how much did you sell it for once that ‘dump’ became trendy or prime for redevelopment?

      I’d love to make a ‘sacrifice’ like yours wink

    • Sandy says:

      02:51pm | 15/11/10

      And did you have the collective weight of government and corporate Australia every day telling you that you need to spend to keep the unemplyment rate in Australian down.  Face it, the Australian governments loaded up with boomers bent to the will of corporate interests.  And now you’re going to blame us for listening to your generation.  Boomers were at the wheel when Australia took this turn towards a debt explosion. It also kept boomers in jobs and their investments growing didn’t it?

    • Sandy says:

      03:11pm | 15/11/10

      And my parents grew up in the gen before you and OS.  Didn’t even have an ice box. And no chance of ever owning their own home.  So what’s your point. Your dump would have been her dream.

      Further back and all those pioneering squatters and selectors lived in bark or slab huts.  So what’s your point.

      Quality of life has improved through technological advances and cheap foreign labour. The real issue is the size of mortgage repayments as a % of income.  (And the share of GDP that bank capital holders (shareholders, staff and creditors) get.) We’re heading towards 2/3 of income pretty quickly.  Is that what you want cranky?  Will that make you happy?  Oh and what were your taxes like back then?

      If the whole world deleveraged by not buying stuff or services they don’t really need then ... well ... more than half of the world would lose their jobs and not have any income at all. The whole system would collapse. Your house and investments (capital) would be heavily discounted and labour would be king.  You’d have to go back to work to buy food and energy. 

      Hey at least we’d stop destroying the planet by overconsuming.

    • Sandy says:

      03:24pm | 15/11/10

      Oh and Cranky.  Another little treasure the Boomer run corporates and government bestowed on us was a tax system skewed to houses.  Bank interest gets the full wack of income tax, capital gains (CG) may get half of that but CG on your home is tax free. What did you think we’d do with such incentives? Pushed the price of your home up hasn’t it? Great idea that’s turning out to be.

      As for moving house.  Did you pay such crippling stamp duty?  As well as GST on the selling and moving costs?

      The ex of a family member is a boomer and has barely worked a day since having her first child 18 years ago. Got her free uni degree too. That was money well spent.

    • Who says:

      02:11pm | 15/11/10

      Love this article!  It has taken the attention away from Gen Y for a while.  Next time the office oldies are on the attack about iphones, lack of work ethic or whatever Kochie has dreamt up that morning I will remember this.  Divide and conquer, classic!

    • Naomi says:

      04:20pm | 15/11/10

      I’m a Gen Y-er and I don’t see the argument. Hey, Boomers had it easy because they could buy houses for cheap! Hey, X-ers have it even easier, they just don’t know it yet!
      How about accepting that there are positive and negative aspects to both generational lifestyles and moving on?
      It’s easy to live cheaply - I do it. I have a small wood-fired stove that I use for heat and meals. I live in a rural area and firewood is free and easy to get. I have a very small electric fry-pan that comes in handy when it’s too bloody hot to light the oven.
      I borrow books, DVD’s and CD’s from the library because it’s free. Most of my weekends are spent at the beach with a packed lunch. And I have a great time.
      When one of my friends or I want to have a party, we organise for everyone to bring a dish - a great way to share the cost around. All of my friends do the same. We don’t flash around our money and we all work full time. We’re saving, slowly, and having a great time living our lives while we’re doing it. Why shouldn’t we?
      I would love to own my own home one day. But I’m not going to kill myself to do it. I can’t see myself, lying on my death bed, thankful that I locked myself into a crippling mortgage for 30 years just so I have something my kids can fight over when I’m dead.
      For me, quality of life is what’s most important. I have great friends, a wonderful, supportive family and that’s what counts the most.
      So yeah, we watch the State of Origin games at the local pub, because none of us have a telly big enough to see if you’re more than three feet away from it. We go to watch the game, not to buy drinks.
      I haven’t been to the cinema in years and don’t miss it. There are much better, cheaper nights out. I have an old yet serviceable sewing machine and do all my own repairs. If I have a big event coming up, it’s easy to buy some cheap fabric and run something up for myself. What’s more, it’s individual and fits my shape perfectly.
      I have a great lifestyle. It suits me. Sure, it’s not for everybody, but it makes me happy.
      No one generation had the easy life. There have been generational hardships for everyone.
      Generation X has high living costs, the burden of supporting an ageing generation and their whole lives ahead of them.
      Boomers had Vietnam, raising all the uneducated, lazy, worthless bums who are now bitching and whingeing about the cost of living - and they’re staring down the barrel of the last twenty years of their lives.
      I guess the grass is always greener.

    • Horthy says:

      07:32pm | 15/11/10

      Sob. I shed a tear. What a trooper.

    • Sam Birmingham says:

      12:07am | 16/11/10

      There are so many more issues to this debate that just McMansion, iPods, negative gearing and sky high property prices…

      Infrastructure: Decades of underinvestment will see younger Australians face higher utility prices, constrained productivity growth, etc

      Climate Change: No accounting for centuries of “negative externalities” nor for future costs of changing to a low-carbon economy. Cost burden being wholly shifted to future generations.

      Ageing Population: Health and pension costs set to skyrocket at a time when the taxpayer base will be declining…

      For more discussion: http://www.webe.com.au/the-economy/two-sides-the-interest-rate-debate

    • doug C says:

      04:26pm | 19/11/10

      I am 52. I feel very fortunate to have saved all my life and only now can i actually afford the “starter” homes that GenX take for granted along with the 2 new cars and everything in debt. I can’t count the number of under 30s I see going to property auctions that I can barely afford and I am very well superannuated with zero debt.  Look GenX doesn’t even stop backpacking until 30. They have the “Gap Year” after school because it was so you know difficult. They travel on a cockroach income because they don’t want to really struggle and then when they stop, mummy and daddy will hopefully have the deposit.  My mate built his own house and saved 2 years for the paint!

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