Wednesday, October 22, 2008

Less than meets the eye to Campbell's big talk

Gordon Campbell offered up some spooky pre-Halloween rhetoric about the global economic crisis night, but outlined a pretty modest response.
Businesses will get about $190 million a year in tax breaks and benefits.
Individuals will get a one-time break. The three-per-cent tax cut scheduled for Jan.1 and with the two-per-cent cut introduced July 1 will both be made retroactive to the beginning of this year. That will cost the government about $144 million in revenue this year; nothing after that. For a taxpayer making $50,000, it's worth about an extra $140 this year.
The government will advance some infrastructure projects to keep people working, but Campbell couldn't say which ones. It will increase the payment to B.C. Ferries to restore sailings cut by the corporation and provide a one-third fare cut for December and January.
And it is working on some sort of voluntary, user-pay pension plan for people who don't have access to.
It's a reasonable, modest response to the economic woes. Consumers will have a little more money this year and businesses will get little breaks to help them through tough times.
The cuts are small enough that the province won't have any trouble maintaining current services and a big surplus this year and next. The government is on track for a surplus of about $2 billion this year. The measures Campbell announced will only knock about $350 million off that total.
The lack of focus on regions facing the toughest, especially forest communities, was notable. There is about $50 million in property tax relief for industry, which will be helpful. And the infrastructure projects could include resource roads. But most measures are broad brush.
The other notable aspect is the premier's decision to ditch the practice of presenting budget measures - which this was - in the legislature.
Campbell unveiled the plan in a speech broadcast on the legislature TV channel at 6:15 p.m. He had hoped TV newscasts would broadcast it live, but they said no thanks.
The whole deal was set up for political effect. Reporters were in a mini-lockup starting at 5:15 and forbidden from filing until after Campbell finished speaking. The aim, in part, was to make it tough for any opposition or expert reaction to make it into the evening newscasts or even into the papers. Reporters were on tight deadlines.
Campbell said the legislature would be recalled on Nov. 20 "to enact these measures."
But the fall session, which had been cancelled by the Liberals, was only to last until Nov. 27. If the Liberals stick to that timeline, MLAs had better bring their rubber stamps with them.
A longer session would allow MLAs from all parties to debate the measures and propose changes or different approaches. (And would allow the government to pass some critical bills it abandoned in the spring citing lack of time.)
Politically, it's tough to judge the impact of the announcements.
The tax cuts will be welcomed by businesses and many individuals. But people waiting for surgery, hoping for improvements to their children's education or with other priorities will wonder why those are taking second place to tax cuts.
Part of Campbell's goal, with six months until the official start of the election campaign, was to demonstrate that he and the Liberals are the people to manage the economy in troubled times.
Public reaction in the next six or seven weeks will be interesting. The measures are useful, but basically more of the same. The tax cuts were almost all planned and have just been implemented earlier than scheduled. The government says it plans no spending changes.
Carole James faces three challenges between now and the session. She has to convince voters that the NDP has the same competence. She has to demonstrate more empathy or understanding than Campbell. And she has to make a credible case for the potential for more creative, active efforts to encourage needed economic activity.
Footnote: Campbell also promised better deposit protection for people with credit union accounts. The pension plan for the 75 per cent of workers not covered by company or union plans appears to be very much work in progress, with no details. Campbell did say he hoped the user-pay plan could be in place by the end of next year.\


Anonymous said...

As you noted, Paul, Campbell's statement included unilateral declarations about reductions in BC Ferry fares and restoration of some service cuts. Huh!? I thought the BC Ferry Corporation was a private company. I guess David Hahn has a little bit of egg on his face today, and will be wondering how to continue to justify collecting salary and benefits worth $500,000 a year - for doing what he's told.

Gary E said...

So Campbell is bailing out the privatized BC Ferries. A two month releif on the fares. Coming over the holiday season. This is just stumping at its worst. Where is the revenue coming from? Oh, right, we the people are paying it from a revenue neutral tax. While big business gets more welfare and no tax on fossil fuels.

Anonymous said...

I don't know but CTV Global, CHEK and the nonpartisan legislative channel had the premiers Mug on and looked like speech was live.

Anonymous said...

Paul - the ferry fare discount will be spun as part of the carbon tax revenue neutral type of nonsense. Just wait for it.

Anonymous said...

anon I have to wonder what kind of work in progess this con artist has cooked up with his howe street stock fraudster pay masters to bamboozle a " fleecing the lamb" type pension scheme.things might start getting tough for the barons of the "scam capitol of north america".you can count on campbell to deliver deliver public money to his crooked friends in high places, ala BCRIC.

Anonymous said...

If most people who don't already have pension plans can't even afford to make their full RRSP contributions, where are they going to find the extra cash lying around, especially with a pending downturn, to invest in Premier Campbell's user-pay pension scheme.

A vacuus offer indeed. Nothing but hot air! But most of the so-called pundits dance their usual foolish dance around him!