Australia has absorbed the carbon tax with little impact.
Two years after Australia started pricing carbon, the economy is growing above trend, unemployment has fallen and inflation is comfortably in the Reserve Bank's comfort zone.
And now the government is promising to scrap carbon pricing next month with the assistance of Clive Palmer – and economic growth will fall and unemployment will rise.
That wasn't the story the Coalition has been telling Australia for four years.
Posters at the No Carbon Tax rally outside Parliament House in Canberra in 2011. Photo: Andrew Meares
You might remember that the sky was supposed to fall on July 1, 2012.
Many Coalition voters apparently believed that, as the gap between their consumer confidence and that of Labor voters blew out to an unprecedented margin, as measured by the Westpac/Melbourne Institute survey.
The second half of that story was that the economy would to take off on a surge of household and business relief when the carbon "tax" was scrapped.
OK, the election pitch wasn't quite that simplistic – there was also the scrapping of the mineral resources rent tax and stopping the boats.
The reality is that the national accounts showed real GDP growth of a very nice 3.5 per cent in the year to the end of March.
The unemployment rate stayed at 5.8 per cent last month and 105,000 more jobs have been added over the past year.
Joe Hockey's first budget says growth will fall to 2.5 and the unemployment rate will rise to 6.25 per cent. So much for axing the tax being the economy's panacea.
It is of course ridiculous to blame the forecast downturn on replacing carbon pricing with a Micky Mouse "direct action" program – just as it was ridiculous to blame carbon pricing for the economy's challenges two years ago.
What the numbers do show indicate is that our economy has handled the introduction of a carbon price with little effort. Reducing the price to low traded figure would be no effort at all.
But the circus of Australian politics doesn't work like that.
Several swifties have been pulled on the electorate by both sides, but one of the more amazing is the idea that the Coalition will in fact scrap the carbon tax. A surprising number of people from both sides seem to believe that.
As a simple fact: the government intends to maintain a carbon tax – it's just being disguised in general revenue.
The $2.5 billion for the vague "direct action" spend is raised by taxation, not being printing plastic notes.
If you wanted, you could probably call it the "carbon sequester element of revenue" – anything but the "tax" word.
The vast majority of free-market oriented economists believe a pricing mechanism would be more effective than "direct action", but the vast majority of climate scientists believe there is a climate change problem requiring urgent action and the government mainly dismisses them too.
Michael Pascoe is a BusinessDay contributing editor.