My previous post summarised the findings of a recent paper published in Agenda about the extent to which the Australian welfare state is biased towards older households. Peter Whiteford from ANU left an important comment:
I’m afraid there ia problem with their results. The ABS changed their income measure between 2003-04 and 2009-10, and now include imputed income from owner-occupied housing in the income measure. Since this favours the aged (who are more likely to own homes outright) it appears to result in a large increase in their incomes. The correct interpretation is that they have always been better-off than they appear on the basis of cash income, but the increase is not real.
Having said this, as indicated above any changes that further advantage older people should be treated skeptically.
Changes in the ABS survey mean that it isn’t possible to conclusively measure the extent to which the age bias in the system has changed, but we can be reasonably confident that the level of age bias measured in recent years is accurate.
Peter followed up on Twitter with a few charts that summarise the intergenerational redistribution through taxes and transfers. I thought they might be of interest to people who had read my previous post:
If you’re interested in this sort of thing, you should really be following Peter Whiteford on Twitter.