Tuesday, February 20, 2007

Budget ignores public and comes up short

Where the heck did this budget come from? The government spent a whack of money trying to find out what you wanted in the financial plan, sending a flyer to every home and a committee of MLAs around B.C. to hold hearings
Tax cuts weren’t high on anyone’s list — not even the business community’s.
Individuals and organizations told the government they were worried about health care, education and issues like addictions and homelessness. From Cranbrook to Campbell River, the public said government should make delivering services the priority.
And they were even willing to pay for them.
But Finance Minister Carole Taylor confirmed yesterday that the government has a different ideological bent. “We as a government have always run on the policy of lowering income taxes when we can,” she said.
So, out of nowhere, an across-the-board 10-per-cent tax cut on the first $100,000 in income, phased in this year and next.
For someone making $30,000, the cut will be worth $67 this year and $134 in 2008. For someone at $120,000, the gain will be $430 and $864.
The government claimed the tax cuts are part of a housing policy, the theme for this year’s budget being “building a housing legacy.” (Last year, Taylor said the budget was “about the little ones.” This year, government cut $40 million from the children and families budget. Staying power is an issue for these people.)
In fact, the tax cut is by far the largest part of the housing commitment. The government claims it’s allocating $2 billion over four years to help British Columbians “address their housing needs and the challenge of home affordability.”
But about $1.5 billion of that tally is based on the value of the tax cuts.
And while it’s nice to pay less tax, can anyone argue with a straight face that a tax cut worth $25 a month to a typical family is really the centrepiece of an effective housing strategy?
Or that the $515 million a year in foregone revenue could not have made a great difference in improving health care or addressing drug-related crime — or providing targeted housing programs?
The other housing measures might be useful; it’s too early to say based on the limited information.
The other striking thing about this budget is how much is left up in the air, in way that might make sense for a government in its first year or two but is worrying after six years in power.
There’s no real health-care plan after this year. Instead the government has built its budget by simply allocating enough money for wage increases in the following two fiscal years. Any additional funding, for population increases or cost pressures or needed services, will have to be found within a limited contingency fund.
If the conversation on health results in a commitment to invest in care, or preventive efforts, that money will have to be found in the same contingency funds.
The big restructuring of the children and families ministry, which was originally supposed to be complete long ago now, has been put off until 2009 or 2010. If there’s an interim strategy, it remains hidden.
Even on climate change, the issue that dominated the throne speech, the government has no real plan behind the urgent words. Taylor’s budget speech talked about a $103-million environmental commitment over four years. Almost half of that goes to buy 20 hydrogen buses; the rest covers small programs.
The only funding directly linked to all those greenhouse gas targets Premier Gordon Campbell talked about is $4 million this year to fund a climate change office. It will try and figure out short-term greenhouse gas reduction goals and the actions needed to reach them. If those actions cost money, that will have to come out of the contingency funds.
It’s not a terrible budget. The province is projecting strong economic growth for the next five years and big surpluses through the next three. There’s no wild spending or cutting.
But it shows a baffling disconnect between the realities of life in B.C., as experienced by ordinary citizens, and the government’s choices.
Footnote: It’s tough to see much in this budget for what used to be called, in another time, the Heartland. The pine beetle crisis, now apparently coming even more quickly, got no mention in the main budget presentations. Much of the infrastructure money appeared concentrated in the Lower Mainland. And the cost overruns on the Vancouver convention centre, now more than $300 million over its initial $495-million budget, are cutting into capital budgets.


Erik Abbink said...

And while it’s nice to pay less tax, can anyone argue with a straight face that a tax cut worth $25 a month to a typical family is really the centrepiece of an effective housing strategy?

It looks like the BC Libs ideology is still having the smallest government ever.

I don't mind a small government, but a government without any "bite" is no good at all.

I wonder if any of those minister folks ever go/shop downtown Victoria...

Anonymous said...

Paul, I must say I'm glad that one member of the news gallery has the guts to actually crtique this government. Smyth and Palmer offer nothing really substantive in way of criticism of the Libs. And the Times Colonist guy seems to be more worried about Winston Churchill's birthday than he is about the things that affect the voters of the province.

Anonymous said...

This budget sounds like it was the product of a bunch that plan to leave town on the last day of the Olympics. I have a sinking feeling they, the Campbell crew of retreads and private school snits, have been told that 2010 is a swan dive into truly painful Provincial debt increase.

By the way has there been any statement yet that the deal has been made on the advertising money cut. How much will the European scam artists keep, and how much will come to Canada in any way at all. And is there perhaps a problem on just how much that mainly TV ad money will actually be. As the song says, have our boys done something rash.

Anonymous said...

THe T/C columnist spent a lot of time this morning, Wed. telling us that the Health costs are about to ruin us. Other folks with knowledge of such things show numbers that prove it's not so. Smythe did a good acticle today about the Liberal spin doctors and the budget so he's not always on side. I'm looking at ways to spend by 25 buck windfall delivered by Ms., Used shoes Taylor and Gordo the benevelant boss of things.

Anonymous said...

Our Health Minister, the human windmill was doing his thing in question period today. Eveything is rosy and what isn't rosy was the oppositions fault. Those folks getting their operations cancelled, well not his fault. The Finance Minster was told she circumvented some laws about funding information and the back row thumpers were having a great time. The only forks not having a great time are the mid to low paid taxpayers,