In 1949, the monumental economic treatise ‘Human Action’ was published, written by Ludwig von Mises. The book remains of immense significance. It is undoubtedly a tough read. Murray Rothbard produced his own magnum opus ‘Man, Economy and State’ a few years later that similarly was an economic treatise built from the ground up. Rothbard and von Mises had similar understandings. Rothbard’s work was a little more accessible for the reader. But von Mises was the grand master. If you question the relevance of a book written over 60 years ago, consider this quotation*:

“The rigid dogmatism peculiar to religious groups and to Marxism results only in irreconciliable conflict. It condemns beforehand all dissenters as evildoers, it calls into question their good faith, it asks them to surrender unconditionally. No social cooperation is possible where such an attitude prevails.”

That quotation is as true, relevant and topical today as it ever was. Today’s Marxists, greens and the totalitarian left are just as vicious as their predecessors.

* Human Action, Ludwig von Mises, Scholar’s edition 1998, p185

It seems likely, judging by the continued Government hints, that the effective rate of tax applied to capital gains on assets held by superannuation funds is going to be increased. Probably this will be announced on Budget night in May and take effect from 7:30pm that night.

As usual, the language is distorted by the politicians to try to twist the truth. I wrote about that in an earlier post. This time around, they say that superannuation funds enjoy a capital gains tax discount. They say the discount results in a remarkably low rate of tax. Hence they are perfectly justified in reducing the discount and making the funds pay a fairer rate of tax. It’s all rubbish, of course. Lies and deception. Continue reading →

The long-established customs of the Christmas period have religious and spiritual origins, of course. But how do more recent additions to the customs of an Australian Christmas, such as the yacht races to Tasmania, the Boxing Day test match, lunch with one set of relatives and dinner with another, and traffic jams to get out of the cities become established? And moving on towards New Year, how has it happened that no Government, big or small, Federal or State, no local municipality believes that there can be too many fireworks displays? Amorous cicadas must hate 31 December in the late evening.

New Year’s day also is the day when Government cabinet papers from years gone by lose their confidential status and are released to the public. It is typically a 25 or 30 year cycle. For Australian Federal Government cabinet papers, we now have access to the year 1990.  This cycle has given rise to the annual Bob and Paul recommencement of hostilities. I must say, this version of a Punch and Judy show is one of my favourite more recently added customs. Bob Hawke and Paul Keating, two giants of Australian politics, still banging on at each other about who was right, who said what, who was the better PM, who reneged on a deal, who brought home the bacon and carried the Government etc. Each yearly release of cabinet papers starts off a new round of argy bargy. It is the season for it. Silly old buggers.

Apologies to Shakespeare, of course, but the title of his comedy from the late 16th century could equally apply to the 2015 Budget changes supposedly intended to make the age pension more sustainable. In case you missed it, the asset test arrangements are to be re-jigged for entitlement to the age pension. At lower levels of assets, the threshold has been lifted meaning some people with assets around the margin will receive higher age pension payments. At the upper end, the threshold has been lowered so some people with higher levels of assets around that margin will have lower pension payments. The rate of taper between the two thresholds will accelerate.

A Shakespearian comparison is valid. Equally, is the contemptuous Mick Dundee New York scene – “that’s not a knife”.

I won’t bore you with modelling charts as the end result is a yawn. For the vast bulk of the population, these changes mean virtually nothing. Many people will see payments marginally increase. Those with assets at the higher end of the means-test will see initially lower pension payments, then as their personal assets reduce more quickly to make up for the short fall, they will then move on to the higher pension payments. For most, it is simply a minor timing switch in the receipt of pensions.

“That’s not sustainability.”