Forget talk of clouds and cuckoos, we’re in strife

Forget talk of clouds and cuckoos, we’re in strife, by Maurice Newman.

There’s a clever American cartoon doing the rounds depicting two pop-up stalls. One is selling “comforting lies”, the other, “unpleasant truths”.

One has a long line of customers. The other, not one. No prize for guessing which stall that is.

This is the state of politics today. It’s a game played by voters and politicians alike, especially at budget time. Better to deal in falsehoods than face reality. Tony Abbott is the last prime minister to sell unpleasant truths, and look where that got him.

Yet, after decades of Robin Hood-style social democratic policies, Australia is confronting its greatest wealth inequality ever. Though 40 per cent of all working households receive more in ­government benefits than they pay in taxes, one-third have less than one month’s mortgage payments in reserve.

Even in a pretend world, where unaffordable promises of equality are regularly made, politicians still pay lip service to balanced budgets. The problem is with 84 per cent of personal income taxes coming from a shrinking 20 per cent of constantly-redefined-lower “wealthy” taxpayers, they’re getting harder to achieve.

Raiding superannuation savings shows nothing is sacred. What’s next, means testing the family home, estate duties, higher capital gains taxes, removal of dividend imputation, repeal of negative gearing, and GST increases? When all else fails, there’s still the printing press. …

How’s this for rose-colored glasses?

According to The Economist, the IMF “never once foresaw a contraction looming in the next year”. Worse, a senior economist who resigned from the IMF, blaming bias and suppression of staff warnings, lamented: “The failure of the fund to issue (warnings) is a failing of the first order. After 20 years of service, I am ashamed to have had any association with the fund at all.” We can only hope IMF forecasts are not taken too seriously in Canberra.