With the federal budget less than a week away, the Albanese government is shamelessly trashing the promises it made about housing at the last election. Despite what it said, it is axing the 50 per cent discount on capital gains, which is meant to compensate investors not just for inflation, but for compressing modest gains made over decades into one year and taxing most of those gains at the top marginal tax rate.

Those who have patiently spent a lifetime investing in the rental market, hoping to save enough to fund a slightly more comfortable retirement, are to be punished. They will spend the next few days waiting to find out just how badly they will be flogged and when it will begin.

For anyone with a mortgage, the pain has already started. The Governor of the Reserve Bank, Michele Bullock, made it clear that an increase in government spending, which is also on the cards, would make the bank’s job ‘more difficult’, meaning that further interest rate rises are on the way.

That’s not the end of the chastisement. Negative gearing, the ability to deduct the costs of investing, is also likely to be removed from all investment properties except those that have just been built. So, mum-and-dad investors are to be punished, while property developers will be spared, with negative gearing preserved only for newly built properties.

Bear in mind that traditionally, Australian tax law has broadly allowed the deduction of expenses incurred in earning assessable income. So, interest on investment loans has generally been deductible regardless of the asset class: shares, commercial property, businesses, or residential real estate.

If the government proceeds with a property-specific restriction, it will represent a major retreat from the long-standing principle of tax neutrality and a major violation of a basic principle of sound taxation: that governments should avoid distorting investment decisions and favouring one type of investment over another.

No one should be surprised. In the world of Albonomics, capital allocation is consummately political. This is a feature, not a bug. You might as well have complained to the Soviet commissars that the collectivisation of the kulaks was not just politically unjust but economically unwise. The famine that followed was as predictable as it was devastating, but it mattered not a jot to the commissars who never went hungry and congratulated themselves on the suffering of those who did.

The bad news for rental investors, mostly people of modest income with one or two investments, is that they are the new kulaks. They will join older Australians who have had the audacity to pay for decades for private health insurance. The government has said it will remove the age-based loading, which created a financial incentive for retirees, most of whom live on fixed incomes, to keep paying expensive private health insurance premiums. Despite decades of encouraging Australians to look after themselves through superannuation, private savings and private health insurance, the proposed change will encourage older Australians, the heaviest users of hospital services, onto the taxpayer-funded public system, increasing waiting lists and public expenditure rather than reducing it.

All this economic mismanagement is being done in the name of intergenerational equity, a concept meant to ensure that current policies do not unfairly burden future generations with debt and taxes.

Why it is fair to punish older Australians is not a question the government has answered but it takes chutzpah to talk about intergenerational equity when the government has added $100 billion to government debt in just four years, especially when the debt has funded welfare or economically unviable assets, like wind turbines and solar industrial installations with short lifespans for which no funds have been set aside for costly remediation.

Nothing better encapsulates the wasteful spending of Albonomics than the decision to pull $1.75 billion out of the Inland Rail freight line meant to connect Melbourne to Brisbane, so it stops in Parkes, NSW, effectively turning it into a freight train to nowhere.

The freight line would have been valuable infrastructure, transporting commodities to markets and removing petrol-fuelled trucks that cause damage on freeways. Instead, the money has been redirected to the Melbourne Suburban Rail Loop, whose passenger demand projections are ‘optimistic’, and whose cost is eye-watering.

Thus, Albonomics has turned the inland rail line into a white elephant to free up funds to pour into a black hole.

Having failed, at least at the federal level, to constitutionally divide Australians by race, Albanese and friends are hell-bent on sowing division based on age. This plays into one of the uglier themes of the zeitgeist summed up in the title of a recently published novel called Kill Your Boomers. It’s the story of a woman in her 30s contemplating killing her parents so that she can use her inheritance to buy a home. It’s a common theme. Another headline, for example, reads, ‘“Selfish boomers”: Amid housing crisis, heritage becomes a dirty word, again’.

Of course, the reason we have a housing crisis has nothing to do with Australians of any age. It is the result of mass immigration on a never-before-seen scale, combined with an economy so overregulated by endless bureaucrats and tied up in red, black and green tape that it is impossible for housing supply to begin to meet demand.

That bloated bureaucracy is dedicated to preventing fracking and drilling for energy, and stopping mining wherever possible, if necessary, in the name of the mythical, blue-banded bee.

Its raison d’être is to feed the insatiable demand of climate grifters for government-subsidised funds to fuel the ‘energy transition’. The federal government has already taken on a trillion dollars of debt and is now hunting for the small change that has fallen down the back of the sofa. It is coming after the mum-and-dad investors in the rental market to pay for the green pipe dreams of Twiggy Forrest and Mike Cannon-Brookes, all in the name of intergenerational equity.

This is why productivity has cratered: more people are producing fewer goods of lower value at higher cost. Instead of managing the politics of growth, we witness the ugly politics of scarcity. Instead of growing the pie, we live in a world of the Hunger Games. No one should be surprised. The politics of envy has always been the handmaiden of resentment. A government captured by grift is waging a war on thrift.