Generational Un-generosity: a damn bitter pill to swallow

3 May

Honestly, I do desperately try to take a positive outlook of the world, and we’re much more likely to be able to think creatively and solve problems if we’re happy. So a warning to you – this post may not help your problem solving ability. Because it’s an angry rant.

I am the offspring of baby boomers (BB), that generation born between 1946-64ish. As we all know, the world I live in looks very different to the world they grew up in. I’m not going to claim fifty years ago everything was peachy, but when it comes to tertiary education, my parents and their peers (hopefully) unwittingly have put a knife to my generation’s throat. Let me explain.

In the 1980s and 1990s, Aotearoa New Zealand was subject to perhaps one of the most intense early regimes of neoliberal reform. These reforms, brought in by a Labour government with no voter mandate for their actions, were swift and severe. As well as dismantling the social welfare scheme, free university education was revoked, breaking a long standing social contract of higher taxes for guaranteed free access.

The neoliberal reforms have had terrible repercussions, some which have particularly affected the BB generation themselves – between 1974 and 1990 male suicide rose 288% as men lost their jobs and disengaged from society. Between 1987 and 1992, the Maori unemployment rate rose by 15% and Pasifika 22%, compared to Pakeha increases of 5%. Where before our country had prided ourselves on an egalitarian ethic, now our leaders actively pursued policies that enormously increased inequality. Now, we can ask what the hell were they thinking? Yet, this same generation, with a few wonderful exceptions (such as Dr Bronwyn Hayward and Assoc Prof Susan St John), remains deafeningly silent about the enormous costs to our society, particularly to our happiness, of these reforms, and the on-going neoliberalisation of our country. And perhaps this is because although much of the infrastructure designed to ensure our well-being (but even more than that, it aimed to guarantee ‘our sense of participation and belonging to the community’ (Easton 1997)) was dismantled, one benefit remained untouched – superannuation. At age 65 you begin to receive this benefit (yes BB’s, you will all be beneficiaries soon), and here’s the kicker, you receive it regardless of your income or assets. No means testing -damn hard to imagine as a student. I’m all for looking after our elderly, but this system doesn’t – those that actually need super don’t get enough to live off. So while this benefit needs a serious overhaul, it does need to stay to protect all of our elderly. And for it to stay, our generation need to pay our taxes.

Despite this cynical, self preservationist approach of the white middle-aged, middle-class they think of us, their offspring, as a selfish, apathetic generation driven by instant gratification. I hear this rhetoric weekly. Our Prime Minister said it was impossible to get us out of bed before 7pm to vote on anything other than student loans. Although young voter turnout may be low, I think this also illustrates that most political parties are constantly failing us, and that we want to do our politics another way. But John Key’s comment brings us back to the issue of student finances.

At a conference on student finance, hosted by the Institute of Policy Studies at Victoria University, Norman LaRoque stated that the student loan system is generous, and we need to put the interest back on the loans as current government subsidies of the loan system were too great. Earlier Professor Bruce Chapman told me not to feel anxious about my (enormous) student debt because the repayment is income contingent, never mind if I ever wanted to buy a house (oh wait, the BBs won’t introduce a capital gains tax so they also have a strangle hold on the housing market). However, at the same conference Professor Richie Poulton presented the first results from a longitudinal study on university graduates. One of the findings was that a third of graduating students are struggling to meet their most basic needs (food and shelter, for example). This supposedly “generous” loan scheme is not catering well enough to our well-being as it is. Put interest back on and you will compound our anxiety and contribute to enormous inequalities between generations.

Just this week, the government has announced that loans will stay interest free (for now) but they are introducing more limitations to who can access student allowances, and increasing the loan repayment rates. This is worthy of a whole other blog post, but the result of these changes is greater pressure on these very same graduating students that are already suffering financial hardship.

Ours is not a generation that can afford to be driven by instant gratification – we are working damn hard with not much. It shouldn’t be this difficult and stressful to get a degree when just a generation ago people were paid a salary to study! And globally our generation is rebelling against increasing constraints on university and job access, and financial security.

I am (clearly) frustrated by a system in New Zealand that locks in BB privilege and calls us selfish when we question it. The idea of supporting this giant cohort in their old age is a damn bitter pill to swallow. What we need is some BB navel gazing – how do you think this is going to work? Look beyond your narrowly defined self-interest and ask what you want New Zealand society to look like? Maybe think about that before you advocate lumping me with interest on my loan again.

Amanda Thomas

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3 Responses to “Generational Un-generosity: a damn bitter pill to swallow”

  1. Alan May 3, 2012 at 2:45 am #

    There’s another side to this story. I’m 78 this month and I’ve watched the baby boomers getting the best of everything right through their lives.

    I didn’t do badly either until I retired 12 years ago. Post-war NZ had a booming economy with Britain buying all the food we could produce on very favourable terms – we had average inflation of only 3% for over 20 years. That all changed with the Common Market (predecessor to Eurozone for those too young to remember), we lost our best markets in Europe and to gain access to new ones (on less favourable terms) we had to open the door for cheap imported goods that were the beginning of the end for our manufacturing industries which have been in decline ever since and largely replaced by importers and retailers. That imbalace wasn’t sustainable so businesses were progressively sold off to overseas buyers to pay the bills, and that’s where the high inflation of the 70’s came from – at one stage I remember 17% annual and I had a Government bond paying me 14% tax-exempt because that’s the only place Government could get money from – the present-day overseas borrowing simply wasn’t possible with international foreign exchange regulation. When that eased off about 1980 the Banks made a killing and their power base has grown ever since.

    All that 70’s Rogernomics wasn’t deliberate destruction – it was mostly desperate measures to deal with a very difficult economic climate. We didn’t like it but even now looking back I can’t think of any other way we could have dealt with it. It was the beginning of a slippery slope and the rest is history.

    Now all I’ve got to live on is NZ Super – my reserves were used up long ago because inflation ate my savings away. For example the life policy I took out at age 20 and paid 3% of my salary into for 45 years matured at age 65 to be worth just over a month’s turn-of-the-century wages. I would have done much better to keep that money in the Bank.

    And you are wrong to say people can’t live on NZ Super. Maybe greedy BB’s can’t. I can with about $40 a week to spare but I have to plan everything I spend and I can’t afford to travel, run a car or eat out. Otherwise I have everything I need and still have a very good life that matters more than money.

  2. Amanda May 3, 2012 at 3:19 am #

    Hi Alan,
    Thanks for your comment. The deliberateness of neoliberalisation is a difficult issue – David Harvey, who has written extensively about neoliberalism, argues that it was a very intentional strategy by some in the elite classes to reclaim waning economic power. I don’t think this motivated most of our decision makers at the time. But I do think baby boomers have a lot to answer for in persisting with a political and economic agenda which does not work, and is creating extremely dangerous inequalities. And they do little to critically examine the system or contribute to discussions about alternatives.
    I think some people do find it hard to survive on super – especially people that have additional responsibilities, like grandparents raising grandchildren (who get very, very little support), or those suffering ill health, and Maori and Pasifika peoples are more likely to struggle as well. I strongly believe that these people need more support, and this support should come at the expense of super given to well-off over 65s.

    Amanda

  3. celeste6 May 7, 2012 at 10:56 am #

    i think this is also a relevant article on the subject..http://www.pundit.co.nz/content/national-101-how-to-hate-debt-raise-it-at-the-same-time

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