Wealth gap between young and old growing - report

Photo: File/SunLive.

Intergenerational inequality is growing larger by the day and things will only get worse unless action is taken, an ANZ Bank report says.

It says young people are disadvantaged by a trifecta of labour market conditions that favour older skilled workers, unaffordable housing and an ageing population, in addition to a climate change crisis, which would cost future generations in more ways than one.

ANZ senior economist and report author Miles Workman says the government could narrow the gap, but it would require transformational change, which would not be easy against the backdrop of an ongoing pandemic.

He says some of New Zealand's lost economic activity may never return and international tourism was unlikely to fully recover.

Reduced business investment would also keep New Zealand's capital stock on a lower-than-otherwise path.

"That means, in short, that we can't make as much stuff," he says. 

"All else equal, a smaller capital stock implies a lower productive capacity, weaker economic activity, and lower incomes than otherwise."

He says there were no silver bullets to address the problems, although there were a number of things the government could do.

Among the suggestions were to build more houses, take steps to encourage investment, broaden the tax system to include a wealth tax and apply more scrutiny to government spending.

In addition, the report said New Zealand's pension plan needed attention.

"We urgently need to take a good hard look at superannuation settings to make them fairer," he says. 

"It's more complicated than just increasing the eligibility age and/or means testing."

-RNZ




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5 Comments

Yadick....you are wrong!....

Posted on 13-12-2020 20:26 | By groutby

....this says so...and older people who have worked for ( and probably still are) is the reason..!!..disgraceful...!! https://www.newsroom.co.nz/pro/grim-warnings-intergenerational-debt-legacy

Sit Back

Posted on 11-12-2020 21:30 | By Yadick

On your butt and expect handout after handout and that’s what happens. If you want it, you got to work for it - a foreign idea to most of today’s youth not made any easier by today’s handout, microwavable Government.

Tom Ranger

Posted on 11-12-2020 08:45 | By Tom Ranger

Well...lets talk about evening the playing field a bit then shall we? Perhaps we should scrap Working for families and all other benefits directed towards creating dependency on govt.

OMG !!!

Posted on 10-12-2020 21:36 | By groutby

...Miles Workman get a grip man!...there is literally NOTHING in your comment to suggest there is any point whatsoever in trying to achieve anything you want to...people.. it is NOT that bad!..this guy is apparently an economist with ANZ?..young folk, please talk to a bank with a positive vision, this article is seriously depressing......no wonder suicide is increasing with articles such as this!.....

No way!!!

Posted on 10-12-2020 20:38 | By The Professor

Wealth tax is unfair!! Means testing for superannuation is unfair, unless it works opposite to the way in which this method is applied in life - the more tax you pay the more pension you should get......I am all for that form of means testing. We are ALL born with the same chance in life. Some of us choose to knuckle down at school, get good qualifications, then get a good job. Some choose to treat school as a joke and continuous playground. I am over Economists suggesting that the hard working wealthy pay for the lay-abouts. I am a strong believer of getting out of life what you put in. Stop targeting people who do well in life!!

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