Australia’s had a great decade of economic growth and the benefits were spread across the economy.
And older age groups were the big winners, becoming much wealthier and fitter, thanks to a fall in interest rates and improved health care outcomes according to Grattan Institute CEO John Daley reported Business Insider.
The growth in wealth of the 55-64 and 65-74 age groups made them the biggest beneficiaries of the decade to 2014.
A lot had to do with owning property
And while Australians aged 45-54 also benefited, Daley told Business Insider the outlook for the younger cohort of Australians is less positive than for their parents.
That’s because “harder times lie ahead” in an outlook for lower growth in per capita incomes, plus a rise in complacency as a result of the long run of prosperity and the unsustainability of the Federal Government’s budget position all combining to saddle younger cohorts with extra lifetime debt.
Younger workers around the globe are earning less than their parents and have lower and falling rates of home ownership while older Australians are capturing a growing share of Australia’s wealth, according to a new Grattan Institute report, The wealth of generations.
“The generational bargain, under which each generation of working Australians supports retirees while still improving its own standard of living, is at risk,” says Grattan Institute CEO John Daley.
The wealth of generations finds that the housing boom plus rapid increases in government payments on pensions and services for older people risks creating a generation of young Australians with a lower standard of living than that of their parents at a similar age.
The report finds that most age groups are richer than they were in 2003
An average 55 to 64-year old household was $173,000 richer in real terms in 2011-12 than was a household of that age in 2003-04.
The average 65 to 74-year old household was $215,000 better off over the same period.
However, the average 35 to 44-year old household was only $80,000 richer.
Worst affected were 25 to 34-year olds who had less wealth than people of the same age eight years before – even though they saved more than people of that age did in the past.