Barend van Lieshout: Elderly will hit the jackpot twice
The locust generation could be hit with a hefty baby boom tax, says Barend van Lieshout
It’s not easy to find a fair way to divvy up the nation’s wealth between the generations. Henk Kamp is handing over pension welfare to the elderly at the expense of the young and, if things go on the way they are, come 2030 the elderly will have their hands in the till again. The younger generations will stand idly by and let it happen.
Enough has been said about Kamp’s adjustment of the pension fund interest rate which will safeguard the pensions of the elderly while landing the young with the risks. What I want to talk about is the rationale behind it.
The older generations are saying they have saved up for their pensions which, moreover, are guaranteed. The young have plenty of time to cobble together a pension of their own. Therefore, it wouldn’t be fair to cut pensions at present.
In twenty years’ time we’ll be faced with the same problem. The great wave of baby boomers, now still active and reasonably healthy, will be old and in need of care. Healthcare costs will rocket and the young people of today (who will then be earning the national income) will find that new car/holiday/training course/museum visit doesn’t sit too well with the cost of the care for the elderly. The Netherlands will then have to face facts: spiralling healthcare costs and no money to pay for it.
Saving up for care
In order to avoid this scenario, it has been suggested that saving up for care might be the solution. Putting some money by for a walker or a stair-lift. It’s a noble thought but far too small-scale and non-committal. Walkers and stair-lifts aren’t going to solve the problem. The care for the elderly runs into tens of thousands of euros a year. Moreover, we are confronted with a huge free-rider problem.
It will be very difficult to distinguish between the spendthrift elderly locust and the frugal elderly ant. The locusts will also get a stair-lift in order to prevent other, more costly measures in the future. Saving money for care may benefit the common good but not the individual elderly person.
Would the younger generation be within their rights if they withheld care from the elderly when the time comes? They could refer to what is being said about pensions today. The elderly haven’t saved up for their care. There is no such thing as a guaranteed care package and the elderly have, after all, had lots of time to make provisions.
In that light, withholding care is not an illogical step. But I’m sure the young will never leave their poor, demented elderly to survive on the streets. They will grudgingly go without their holidays and pay up.
Baby boom tax for the locust generation
Wouldn’t it be fairer and more logical to help the elderly of the future by filling the coffers through the implementation of a hefty baby boom tax? Just get the tax collector and the bailiff to collect the money, stick it in a safe and put a sign up saying ‘Do not open before 2030’.
The elderly will like it, too. They won’t accidentally spend all their money on yet another trip, electric blanket or other products for oldies, and they won’t have to worry about being called the ‘locust generation’.
Barend van Lieshout is a healthcare adviser at Rebel
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