Wednesday, April 1, 2009

No Laughing Matter

April the first is never a good day to announce anything. Given the tradition for tomfoolery which has long been honored, any announcement on this date should be viewed with at least mild suspicion. And with good reason. Among today’s announcements have been a new public transport system for Sydney comprising three new monorails labeled as the “triple M” scheme, along with an Aussie Rules football with built in GPS which will, among other things, alert talent scouts to your kicking skills, and even an office pen with a microchip so that when someone inevitably pinches it from your desk you can track it down to the nearest metre anywhere in the world. All great ideas, except perhaps the monorails, but all completely untrue.

Perhaps it’s just a coincidence that today’s headlines also warned that the Medicare Safety Net was under threat in the forthcoming federal budget. The Telegraph ran a front page headline announcing a “Tax On Mums”, which coming on April Fool’s Day could have been easily misconstrued. While it’s true that the government is now desperately looking at bottom line savings for a budget which has been plunged over the precipice of debt by the Global Financial Crisis, it remains to be seen just what will and won’t be cut when the big night arrives in May.

There has been much debate about the government’s mandate in recent times, especially in the process of passing the industrial relations legislation. The government was clearly elected on a promise to remove Work Choices and replace it with Fair Work Australia, and yet it was still a struggle to get it through the Senate. Now, if it turns out that the government is indeed contemplating taking the axe to the Medicare Safety Net perhaps they should be reminded that they also went to the election promising that the Safety Net would remain intact. If the government is about to start reneging on election promises perhaps we have all been April Fools.

Another April Fool’s Day announcement which is no joke is the worse than expected retail sales figures. After the healthy boost in December, thanks in part to the economic stimulus bonuses, and the better than expected January result, it comes as a bit of a shock to learn that the February figures show a fall of 2%. Worst hit have been the department stores with a decline of almost 10%, while cafes and restaurants have fared much better with a decline of only 1.3%. It is however a reminder that the Great Global Recession is far from over, and both businesses and consumers are still in need of whatever support the government is able to provide.

At the same time, the G20 and the OECD have set the scene for the crisis to continue to drag the global economy backwards for the rest of this year at least. Amidst the wreckage of the global financial system, both British Prime Minister Gordon Brown and our own PM Kevin Rudd are calling for a new economic order which is based on something called “compassionate capitalism”. It sounds like a nice idea, and seems to be something similar to another quaint old idea, that of “enlightened self interest.” That’s the idea that it’s logical to act in the best interest of others because the long term outcome is in your own best interest. Unfortunately, human beings are rarely logical and are more often driven by the more urgent emotions of fear and greed, especially when placed into a mob mentality scenario. That being the case, “compassionate capitalism” doesn’t stand a chance unless it is backed up by a bit of good old fashioned regulation.

Of course, with so much to be gloomy about, it’s a relief to know that there are still some April Fool’s Day pranksters out there giving us something to laugh about.

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