Big demographic changes ahead

[TomW]

The baby boomers are too big a voting bloc for the Government to make big cuts in the pension etc..

I suspect they will raise taxes on the younger generations, reduce government transfers to people under the age of 65 (I expect a big crackdown on the disability pension for example) and they will borrow.

 

[.toe]

The baby boomers are too big a voting bloc for the Government to make big cuts in the pension etc..

I suspect they will raise taxes on the younger generations, reduce government transfers to people under the age of 65 (I expect a big crackdown on the disability pension for example) and they will borrow.

Look out inflation here we come.

 

[Rolf Latham]

A Bex and a lie down might be in order, wylie .

.

dead set give away on age here

ta
rolf

 

[weg]

dead set give away on age here

ta
rolf

OK, so it is, but wylie's older than me .

 

[Dan_p]

I have to agree with Redwing, tax revenue will not be enough to fund BB's pensions. Imigration might not be an answer simply because of the political pressure that results every time we look like being under some sort of economic pressure.

Perhaps if we get the large number of un-employed workable age group people into work then the extra taxes they produce can help subsidise the baby boomers retirement. Also more of our tax funds would be able to be allocated to retiree's rather then dole bludgers.

 

[Graemsay]

The baby boomers are too big a voting bloc for the Government to make big cuts in the pension etc..

Not only that, but the older generations tend to be more politically active than the younger generations, and hence increases their influence.

 

[lizzie]

Perhaps if we get the large number of un-employed workable age group people into work then the extra taxes they produce can help subsidise the baby boomers retirement. Also more of our tax funds would be able to be allocated to retiree's rather then dole bludgers.

Some of the problem is that a large number of these unemployable would, once upon a time, have been employable in the menial jobs - street sweeper, factory machinist, production line worker, council labourer/ditch digger - but unfortunately the level of jobs many are capable of just don't exist anymore due to overseas manufacturing or machinery.

Heck, you need to do a couple of years at TAFE now just to become a brickie!

Unfortunately it's not as easy as "making them work". There has to be jobs available to suit their mental ability levels.

 

[.toe]

Some of the problem is that a large number of these unemployable would, once upon a time, have been employable in the menial jobs - street sweeper, factory machinist, production line worker, council labourer/ditch digger - but unfortunately the level of jobs many are capable of just don't exist anymore due to overseas manufacturing or machinery.

Heck, you need to do a couple of years at TAFE now just to become a brickie!

Unfortunately it's not as easy as "making them work". There has to be jobs available to suit their mental ability levels.

Also it's generally recognised that 5% unemployment is full employment. The reason being that going below 5% tends to cause wage inflation as employers compete to have jobs filled (just look at mining right now).

The Howard governments IR policies were designed to beat that 5% level by making the employment landscape more efficient for employers, but of course most people were against them (much like imigration).

 

[Aaron Sice]

the only way we can go back to employing people in service based industries, like street sweepers, garbos, doormen etc is to stop upgrading current machinery.

example....

if we want to employ 3 garbos per truck, instead of a single truck driver, then we need to pull the bin arm off and stop buying new trucks every 40000km. we would then need more mechanics to service older trucks as well.

so we have one driver and one new truck every 40,000km.......or we have one driver, two garbos, one mechanic and a truck every 200,000km.

the older truck pays for two garbos, and the mechanic is supplied on contract by the private sector who margin their rates and pay tax/gst on the revenue.

thats how you "create" jobs.

 

[.toe]

the only way we can go back to employing people in service based industries, like street sweepers, garbos, doormen etc is to stop upgrading current machinery.

example....

if we want to employ 3 garbos per truck, instead of a single truck driver, then we need to pull the bin arm off and stop buying new trucks every 40000km. we would then need more mechanics to service older trucks as well.

so we have one driver and one new truck every 40,000km.......or we have one driver, two garbos, one mechanic and a truck every 200,000km.

the older truck pays for two garbos, and the mechanic is supplied on contract by the private sector who margin their rates and pay tax/gst on the revenue.

thats how you "create" jobs.

These are really good points Aaron. In regional Victoria when the drought was full swing the busiest business was the mechanic, because farmers were not buying new machinery. That is exactly how China employs more & more people, using government incentives & labour costs.

I imagine unions & labour costs here are the issue with it. It should be more valuable to our economy to employ people than to import machinery, surely.

 

[Deltaberry]

Oh god that sounds like a recipe for going backwards. Awesome stuff.

 

[Intrinsic_Value]

The above few posts all tie in with wages vs productivity. You want higher wages you need marginal productivity.

The long term wage 'wealth' of a country comes through higher wages that are complemented with productivity improvements. That way the long term wage increase is sustainable.

If you want employment without productivity, why not resort to the Thailand example for street cleaning, a bunch of ederly ladies and gentlemen with grass brooms, manually brushing as they walk.

Alternatively you can have the Southern European model, alla Greece, but we seeing a live version of this on our TV screens as to how this model plays out over the long term. In the short term cost/productive inefficiences can be washed over, but not over the long term.

Something our very own Green Party should be very very wary of.

 

[trendsta]

Maybe the govt is much smarter than we think.. hence the substantial increase in population in last decade..

That model has worked so far, but does not work when unemployment is rising. Added to that there is more political pressure during those "tough times"and backlash against migration ..

I followed the economic chain and I think the main think to look for is steel production in china.. Steel is one of the primary materials in industry especially in china and thus a good indicator of their general economy. Steel production will drop when industrial / consumer demand drops. Main inputs are iron ore and coal. Most of iron ore ends up in china, and substantial coal (though more is sent to japan and maybe korea). Iron ore and coal are currently two biggest exports of OZ (about 45 bill per year, each).

Also if steel production is dropping chances are other industrial material e.g. lead, zinc, copper, nickel will also drop. AUD drops..

Combined with ageing population the govt hands will be tied in terms of fiscal policy. So not much stimulation is likely in coming years.. The remaining option is monetary policy , hence RBA reducing rates..

 

[marg4000]

the only way we can go back to employing people in service based industries, like street sweepers, garbos, doormen etc is to stop upgrading current machinery.

example....

if we want to employ 3 garbos per truck, instead of a single truck driver, then we need to pull the bin arm off and stop buying new trucks every 40000km. we would then need more mechanics to service older trucks as well.

so we have one driver and one new truck every 40,000km.......or we have one driver, two garbos, one mechanic and a truck every 200,000km.

the older truck pays for two garbos, and the mechanic is supplied on contract by the private sector who margin their rates and pay tax/gst on the revenue.

thats how you "create" jobs.

Quite true, but then charges would rise and there would be an outcry. People want the lowest costs possible, which means mechanisation.

Same with online shopping. People want the lower prices by buying overseas, but scream when jobs are cut in "bricks and mortar" stores.

We can't have it both ways.
Marg

 

[lizzie]

Yup - (showing my age) remember when Barbie Dolls used to cost around 1/4th of the weekly wage? Now they cost around $10.

 

[.toe]

Quite true, but then charges would rise and there would be an outcry. People want the lowest costs possible, which means mechanisation.

Sure, but we already have quite a lot of legislation & tax incentives that have the 'general good' as a purpose & that increase the cost of items we buy. There was a recent story on one of those (poor excuse for for a) current affair shows that the prices we pay for many goods in Aus is very high by world standards because of the government (my guess is housing is on top of that list).

 

[Aaron Sice]

Quite true, but then charges would rise and there would be an outcry. People want the lowest costs possible, which means mechanisation.

Same with online shopping. People want the lower prices by buying overseas, but scream when jobs are cut in "bricks and mortar" stores.

We can't have it both ways.
Marg

so everyone pays 20 a week more in rates and we get 3 people employed per truck?

thats beteer than more middle class welfare.

 

[lizzie]

so everyone pays 20 a week more in rates and we get 3 people employed per truck?

thats beteer than more middle class welfare.

More like $3 per week.

Say a truck picks up 200 bins per day, 5 days a week ... that's the equivlent to $3,000/wk or $156,000/yr extra for the council for all their bins on that particular run.

Take off the $56,000 for administration/super etc for two garbos (this is government we're talking about), that's a pay rate of $50,000/yr for an unskilled worker.

 

[willair]

I also think they will (already have) reducing their share holdings i.e. convert from growth supers etc to "balanced" or income/yield supers. They will look for income, bonds, term deposits etc.

Any other views out there??

Depends on the person,some "BB" i know have very little super,stuff all in the bank,and rent,while others have money to burn,and what is inbetween those groups would be different again,very hard to say what will happen just enjoy each day..

 

[Sunfish]

It must be approaching fifty times now I've asked how you guys are sure you know how BBs will react en mass? May I suggest that you don't know?

I'm a pre-BB and I can assure you that my friends do less buying/selling property than you youngsters. I, personally, have just moved into a bigger home and added a fifth b'room. My mates are still productive in society. (We were raised that way) This overwhelming ambition to retire young and rich is VERY MUCH the province of the younger set.

I have NEVER got something for nothing: No dole (didn't know it was available), no free Uni education (not even HECS), no FHBG, no baby bonus, no gov funded child care, no nuttin'. If you think there will be future problems with the budget, cut middle class wlfare first, don't dump on your parents and g'parents.