Bludging off the kids

The 2014 budget debate has been like no other because there has been no genuine debate. From the outset Labor has refused to engage in economic dialogue, instead invoking faux outrage and playing the morality card to great effect.

But the truth is morality - namely, addressing gross unfairness dealt to younger Australians - is entirely on the government’s side.

Usually there is no drier debate than the budget. The national dailies run the obligatory "smokes, beers: up" but otherwise Australians are confronted by incomprehensible numbers, ideological banter between Keynesians and rationalists, and a host of experts interpreting economic gobbledygook. Soon even the economically literate switch off.

Not in 2014. Almost eight months on, deep and emotional divisions on the budget loom large in the community.

Sound economic management right now is harder than at any time in recent history. Labor left unprecedented deficits and government spending has been climbing fast. The terms of trade and credit booms - until now the golden geese for tax revenues - are in their final gasps. From here on, with China and India slowing, we will need to work hard for every dollar.

Yet Labor refuses to accept the need to tighten our belts.

Instead it has reframed the budget to focus on fairness and avoidance of harm - two powerful moral principles with strong appeal, reframing the nation’s desperately needed reforms into questions of right and wrong - with Labor simply asserting that the reforms are wrong.

This morality tale has played well. Talk of "cruel cuts hurting the poor" and "unfair reforms" get traction, regardless of the truth, because these claims pull the heartstrings, independent of the facts.

A large swathe of an increasingly polarised media is helping Labor to fuel its claims on morality - selling newspapers by appealing to the heart, not the head.

However, there is a far more powerful story to tell about the real victims of bad economic management: Australians aged under 50. This is a morality tale of epic proportions, exposed in a recent report from the Grattan Institute. Older Australians are wealthy and getting wealthier, while the young are going backwards.

For 20 years, house prices have been rising - driven by a combination of easy access to cheap mortgages, constrained housing supply and underinvestment in infrastructure to residential growth centres.

If you spent enough on a house early in this boom, mostly those over 50, you are sorted. Grattan tells us that, on average, your household is worth almost $1 million and your wealth has increased by about 20 per cent ($200,000) between 2003-04 and 2011-12. If you are younger, you probably missed out. You are worth half as much, or less, and your wealth has barely increased. You can get into the housing market only by giving a huge windfall to older Australians and taking on a mortgage of unprecedented size.