Thursday, March 04, 2010
No Dragon Slayer in the House
The federal government's budget was read to the House of Commons today and will be debated tomorrow, and perhaps on other days during this session of parliament. The enormous, vicious fire-breathing deficit dragon was not attacked with any efficient weapons. Instead, the finance minister waved a white flag at it from a distance and assured us that it would shrink to the size of a grasshopper in three or four or five years, or thereabouts. He believes this will happen because: - the economy will keep on improving (I liken this to a faith in financial miracle healing) and because - there won't be any "new" stimulus spending (so the economy will have a good time stimulating itself when the current stimulus money runs out, I assume) - and - some government salaries will be frozen and no new staff will be added. Also, taxes will not be increased and some will be decreased.
I am in favour of controlling the number of people who work in government and ensuring that tax money is used wisely ( the government should listen to Kevin Page). Bureaucracies have a natural tendency to grow into huge fiefdoms given the slightest opportunity. However, I suspect that the areas most affected will be the ones that mean the least to the supporters of socially regressive Conservative party. I believe funding for the arts will decrease more than funding for other sectors since creative people are considered effete and useless. The contribution the artistic community makes to the economy will be downplayed again. Little money will be given to environmental issues because the Conservatives are sure that only wing-nut lefties care about those things and the government wants to encourage more foreign investment and more free trade. (Free trade is not 'free' but that's a subject for another post.)
Unfortunately, the Goods and Services Tax will not be increased although that would be the fairest way to begin to tackle the dragon. And yes, I think we should increase the GST. Even one percentage point would do more to decrease the deficit than anything else that has been proposed and it wouldn't be all that painful.
The government says we are - open for business. Oh goody! I guess we were closed before due to our propensity to tax corporations at a rate that some people think is unacceptable. I would argue that we can never decrease taxes to the levels that some countries offer because a) we are a huge country, b) we have a small population, and c) we need to fund the programs that make us unique. We cannot do this unless we tax adequately. So what does attract business to Canada? Our health and social support programs are a big draw. Do we really need more huge corporations that make demands on local provincial and federal governments in return for possible future success (think of the auto industry bail outs)? Or, are more small and mid-sized businesses a better bet in the long haul? In spite of the recession, new small businesses start-up every day. I'd rather offer a modicum of support to them than to larger enterprises.
All is not lost though, for we will save 1.8 billion each year by decreasing foreign aid. But hey! - it's only those people, so never mind about them and remember - no visible new taxes. So, get out there and buy something.