Intergenerational equity is being weaponised. We shouldn't fall for it

In the lead-up to the federal budget, “intergenerational equity” has re-emerged as one of the dominant frames in Australia’s economic debate. We are told that younger Australians are being saddled with debt, overtaxed on their wages, and left to pick up the bill for an ageing population.

On its face, this argument sounds true. There are real inequities in the system. But the way intergenerational equity is increasingly being used in public debate should give us pause. It is not just describing a problem; it is laying the groundwork for responses that would make inequality worse, not better.

At the centre of the current debate is a genuine contradiction. As the Grattan Institute and others have highlighted, it is possible for older, wealthier Australians to pay little or no income tax in retirement, even while holding substantial assets. At the same time, younger workers face rising housing costs, stagnant wages, and a tax system that leans heavily on income from work.

That is a real issue. It speaks to a tax system that privileges wealth over work and assets over income. But increasingly, this observation is being bundled together with a very different claim: that government spending, particularly on public services and care, is itself a form of intergenerational unfairness.

Some commentators and even government MPs have argued that, alongside reforms to tax concessions, governments should pursue budget repair by cutting “unsustainable” programs like the NDIS and aged care, with the proceeds “redistributed” through tax cuts. In this framing, reducing public spending becomes a form of fairness to younger generations.

It is a striking rhetorical move. Tax cuts are recast as “redistribution”. Cuts to public services are reframed as protecting the future. But these are not the same problem, and they do not have the same solution.

The fact that some wealthy retirees pay little tax is a failure of how we tax income and assets. It is not an argument for cutting services that millions of people rely on. Nor is it a justification for shifting the burden further onto those with the least.

Conflating these issues obscures more than it reveals. It reframes questions about how we raise money, how we distribute it, and what we spend it on into a single narrative about generational conflict. That directs attention away from the real drivers of inequality.

Much of the inequity in Australia’s system is not between generations, but within them. Younger Australians are not a homogeneous group. Those who will inherit wealth are in a very different position to those who will not. The same is true among older Australians. Framing the issue as “young versus old” simplifies the politics, but it distorts the economics.

It also opens the door to a more troubling shift. If the problem is defined as government spending on older Australians, then the solution becomes cutting that spending for everyone. If the problem is defined as public debt, then the solution becomes shrinking the role of government.

Under this logic, public services from healthcare to aged care to disability support are no longer social goods. They are liabilities to be managed or costs to be contained for the sake of future generations. This is not a neutral framing. It is the same logic that got us into the mess we’re in.

We have seen versions of this before: arguments that position the social safety net as unsustainable and recast redistribution downward as a burden rather than a benefit. What is new is the language being used to advance it.

Today, the language of fairness, equity and even social justice is increasingly being deployed to justify policies that would reduce the role of government and expand the role of the market. 

Cuts become “responsibility”. Tax cuts become “relief”. And dismantling public provision becomes a way of “protecting the future”. Advocates and influencers who use this language should be wary of accepting this framing, even when it begins from a point they agree with.

Yes, the tax system needs reform. Yes, there are inequities in how wealth and income are treated. And yes, younger Australians face structural disadvantages that demand a serious policy response.

But those problems are not solved by cutting public services, spending savings on tax cuts, or shrinking the state. If anything, doing so would deepen the very inequalities the intergenerational frame claims to address.

A fairer system would look very different. It would mean properly taxing wealth and capital. It would mean investing in the services and supports that people rely on across their lives. And it would mean recognising that the real divide is not between generations, but between those with assets and those without.

Intergenerational equity should be about expanding opportunity and security, not using the language of fairness to justify taking them away.

If we are not careful, we risk allowing a legitimate concern to be repurposed into a case for policies that entrench inequality. And once that framing takes hold, it becomes much harder to challenge the outcomes that follow.

Maiy Azize is Deputy Director of Anglicare Australia

Jay Coonan is an anti-poverty activist and co-coordinator at the Antipoverty Centre