On the way out, boomers still have the numbers
Sydney Morning Herald
Saturday January 2, 2010
IT'S here. As of yesterday, the oldest baby boomers will start to retire from the workforce, and as they move on to the age pension, the squeeze on government revenue which has been predicted for so long will begin to occur.The projections of the second intergenerational report, released in 2007, were less alarming on this phenomenon than those of the first report five years earlier. Increased immigration, a higher birthrate and greater participation rates had boosted the projected numbers in the workforce to 2047 - the report's time frame - compared with the retired population. Improved terms of trade had made projections of gross domestic product look better, too. Even so, the ageing population was projected to slow economic growth from an average of 2.1 per cent a year for the previous four decades, to 1.6 per cent for the next four. All that, of course, was before the global financial crisis. The current outlook will not be known until the release of the third report, expected soon. According to the Treasurer, Wayne Swan, it will project a larger and younger population than its predecessors, but ageing still confronts the economy with difficult spending pressures.But the gradual withdrawal of the baby boomers from working life is more than a demographic change and a challenge to those framing future budgets. It is also a cultural change.The baby boomer generation reached adulthood in the West in a period of domestic peace and prosperity which has rarely been matched in history. Its large numbers and privileged life, together with other social trends including the sexual revolution following the invention of the contraceptive pill, marked it as different, and endowed it with a confidence and a sense of entitlement which produced an astonishing ferment in Western democracies. The protest movement against the Vietnam War in America and Australia, and the broader protest movement against the status quo in countries such as France and Czechoslovakia, were all local variations of that general trend.That ferment always assumed that the baby boomer generation was an agent of change - at times revolutionary change. The famous image of Che Guevara symbolised that revolutionary spirit - even though more recently it has been viewed with an ironic twist, a wry recognition that revolution promises more than it ever delivers.But revolutions come to an end; revolutionary spirit becomes diverted from idealistic self-sacrifice into securing individual gains and defending the status quo against further change. Young revolutionaries interested in liberty, equality and fraternity become conservatives more concerned with the size of their mortgage, the convenience of their plasma television or the slenderness of their golf handicap as they move through life. So it has been with the baby boomers.Once in the workforce the baby boom generation showed themselves not so very different from those who came before or after. Australia's laws and culture encouraged owner-occupied housing after World War II, and the boomers responded eagerly, as their parents had, to the incentives. Their enthusiasm has kept the proportion of owner-occupied housing steady around 70 per cent of all housing over five decades, but it has also driven the price of houses up. The generous tax rules on housing, and rising disposable incomes, have led an entire generation to invest and reinvest in ever more elaborate homes. The larger bulk of that generation within the population has accentuated the effect, and has squeezed generations which follow out of the market.The baby boomers are happy, though others may not be. And given the number of boomers, politicians are eager to keep them happy. The recent state of politics illustrates how conservatism has come to dominate as the boomers have aged. After 11 years of John Howard, perhaps Australia's most conservative prime minister ever, this country's voters, among whom baby boomers, of course, predominate, elected Labor's most conservative prime minister ever. At state level, particularly in NSW, Labor's sclerotic factional system - based on ideological divisions from the boomers' heyday - has produced a decadent administration which is incapable of framing or articulating a coherent vision of the future, or of mustering the means of achieving it. Like the anciens regimes of 18th-century Europe, or the post-Stalinist eastern bloc regimes in the 1980s it clings to power without purpose or hope.The baby boomers are starting to move on. In their day their dreams and their achievements were great. But the world has changed. Australians of all ages must retain the intellectual flexibility to ensure the certainties of their generation's passing era do not become the obstacles to future progress.
© 2010 Sydney Morning Herald