Tuesday, November 18, 2003

Australia’s Generation X. Celebrate the Rugby final and start saving

The authorities in Australia are concerned (putting it mildly) about the problems created by the aging population. Last week the Reserve Bank’s Governor, Ian Macfarlane, warned of the potential for inter-generational conflict over wealth as the outlook darkens for the poor, young Generation X (born 61–76).

This generation has a materially smaller share of household wealth than their older counterparts and they are less likely to own their own home or have a mortgage. This is according to research from the National Centre for Social and Economic Modelling (NATSEM) and published by AMP in a report titled Generation Xcluded.

It appears that the share of total wealth held by 25- to 39-year-olds has declined from about 27% in 1986 to just 19% today. Home ownership is a main factor. In 1989, 64% of this age category (25- to 39-year-olds) either owned their home outright or were paying it off, but 10 years later, this figure had fallen 10% points.

What makes this situation extremely worrying for Europe is that Australia is a ‘young country’ in that there are more people in the ‘X’ than the Boomer generation. Not only is the X Generation poorer they will remain so as their tax burden increases to pay for their parents and grandparents. A well presented report and definitely worth a read.

Now back to the Rugby!

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