Monday, November 03, 2008

Are too aggressive Liberals helping James?

I've got to admit, I didn't watch Carole James economic pitch on TV. I was watching David Copperfield make a '48 Lincoln appear out of nowhere at the local arena. I still have no idea how he did it.
There's an analogy there somewhere - maybe to the challenges James faces in next May's election, or the mysterious way Gordon Campbell has managed to make support disappear when his party should be riding high.
But having written about Campbell's 10-point plan, mostly approvingly, it seemed fair to look at the speech James gave, which is available on the NDP website.
It was not bad, really. Certainly better on one level than the stiff, distant and bureaucratic speech Campbell's staffers wrote for him.
James did a better job of talking to British Columbians about their concerns.
Basically, she said the measures Campbell had proposed made sense, but were inadequate. She supported the retroactive income tax cut, worth about $144 million this year as a one-time break.
But James also said she would remove the carbon tax. That means an extra $631 million in people's pockets next year. And, of course, $631 million less in government revenue.
It's a political winner, but bad policy. The carbon tax makes sense. It is offset by other tax cuts. The tax encourages people and companies to reduce their consumption of greenhouse-gas emitting fuels. It rewards innovation. It's a sensible tax shift. But, as Stephane Dion found, that can still be a tough sale.
The NDP knows some price on emissions is needed. But its position is playing well.
James, like Campbell, also supported moving ahead more quickly on some infrastructure projects to help the economy. He wouldn't say which projects would get priority; James promised faster seismic upgrading for schools, 2,400 more affordable housing units to deal with the homelessness crisis and accelerated transit spending.
And she proposed other measures the premier had rejected. Skills training and post-secondary education are important when times are tough, she said, so school budgets would be boosted, student grants restored and interest on student loans cut.
Raw log exports would be cut and more effort and money spent on economic measures aimed at helping forest communities. A
And James promised to attack waste and excess spending, pointing to the Vancouver convention centre, where cost overruns have cost provincial taxpayers $450 million. (Expect to hear much about that from New Democrats over the next six months.)
James released a costing for her tax cuts and spending. It looked sound for this year and next, but cut things too fine for 2010/11. There was the risk of a deficit then
All in all, it was a reasonable plan, but probably not likely to shift many voters.
There were grounds for concern about whether it would be affordable if times got tougher. And the Liberals could be expected to attack the details.
But then the Liberals got self-destructive, in a way that should worry supporters.
For weeks, caucus communications staff - publicly funded - have been running an attack campaign. It's been over the top, the kind of rhetoric that partisans love and uncommitted voters loathe. The team leapt into action after James' speech.
Finance Minister Colin Hansen went on Christy Clark's radio show and said, "We have seen the projections for provincial revenues collapse in the last six weeks, to the tune of billions of dollars."
Except a week earlier, Hansen had said things were difficult and volatile, but revenue projections were "still running ahead of what we were anticipating at the time of the budget."
His explanation was that revenues for this year were on budget, but not for the rest of the three-year plan period.
But if things are on track this year, yet revenues are to be down "billions" in the next two years, then the Liberals must be considering tax increases or significant cuts.
The next quarterly update, around the end of this month, will now be very closely watched.
Footnote: The revenue outlook is volatile. The budget, for example, calls for the government to take in $1.9 billion in property transfer tax on home sales in the next fiscal year. Recent projections of a big drop in sales could knock $400 million off the money available to spend.

1 comment:

RossK said...

Caucus communications staff being overzealous is one thing, but when they start forcing Mr. Hansen (who moderate left leaners like me might actually vote for) walk the extremist rhetoric plank, well.....