13 August

It’s disingenuous to say to young people today that their parents also had high house repayments. The relative price of houses between then and now is literally chalk and cheese. The fabled ‘we paid 17% interest rates’ was a handful of years only, at the end of the 1980s (red circle). That was 17% of a MUCH smaller mortgage loan, and for only 3-4 years. Look at what happened to house prices from the turn of the century. That’s a quarter of a century now of completely unaffordable mortgages. Housing is the great swindle we’re pulling on younger people, a genuine disaster. And the astronomical capital gains from those skyrocketing prices have gone predominantly to older generations. Meanwhile if the young go to university, we slap tens of thousands more onto their debt balances. (Remembering most older Australians got their uni for free.) And we have so few young people now that they’re going to be expected to fund and care for us older Australians as we go into retirement as well, but there won’t be even a fraction of the workforce needed available to do it. The whole thing is a powder keg ready to blow. There is only one solution, and it’s deeply unpopular. Older Australians are going to have to pay more for the things they need, through re-direction of our massive retirement savings (all hugely taxpayer subsidised) into paying for social services. Including waiving university debts for students, which will need to come at the expense of other spending priorities, for the old. And the gold-standard health care older Australians expect is going to need a LOT more money, which won’t be able to come from taxpayers - there aren’t enough of them, and they already have unaffordable mortgages and uni debts. And none of that fixes the workforce problems. The entire world is desperately short of young workers.