Saturday, March 6, 2010

Channelling the Future

Unless you just got back from Cancun you will know that we had two budgets in the last week. One from the indebted BC government and one from the more indebted Federal Government.

There are links below for those who missed the high-lights. However, the gist is, small cuts that don't add up to much and hope the world economy and inflation pull out us out from under the pile of steaming debt.

I have found a way to channel future budget speeches and am going to give you a little snippet of a few of these.

2012 Federal Budget

Minister of Finance: " as you know, the renewed slow-down in China/US/Europe has caused our fiscal projections to be wrong (there that didn't hurt so much to say we were wrong) and so we have had lower tax receipts, while expenditures have gone up. Some of these expenditures have been from extending the UI eligibility, others were for increased Provincial transfers to prevent credit down-grades and higher borrowing costs. We have also had increased expenses from the entitlement programs of the baby-boomers and also from having to assume some liabilities of the CHMC due to the weakness in the housing market.

The result has been a ballooning of the deficit. The opposition want us to spend more and monetize out debt. Other countries have done this and have seen their currency devalued, and inflation take flight. The Conservative party is committed to fiscal responsibility so we reluctantly are forced to take drastic action. We will be cutting Provincial transfer payments (God help them), we will ask all departments to find 5-10% savings and increase certain taxes such as GST."

BC Provincial Budget 2012

BC Finance Minister: "Since the Federal Government has so irresponsibly cut our transfer payments by 20%, we are in a difficult fiscal situation. Their balance sheet looks better, but they have down-laoded the responsibility for making the tough decisions to the Provinces.

This is not helped by the fact that Health Care is now consuming $6 out of every $10 we spend due to our aging population.

We have had to look for ways of raising revenue in a difficult business environment. The NDP will not cut the basic services that our people need. Our research has shown that there are many in this Province who have significant wealth, acquired in other Provinces and even outside this country who live in multi-million dollar homes and pay very little income tax. Yet they use services. We have therefore decided to place a 'home value surcharge' until the fiscal situation improves. The amount will be 1% of the accessed value of homes over $1,000,000. If you can afford to live in a $2 Million dollar home, you can afford to contribute to the costs of society. Currently the burden falls mostly on middle income earners."

Federal Budget 2014

Federal Finance Minister: " This new government is committed to doing whatever it takes to get Canadians back to work and reverse the funding cuts of the last two years. We will achieve this by increasing taxes on corporations and high earners and we have instructed the Bank of Canada, under it's new Governor, to reverse the interest rate hikes of the last three years and to purchase Government bonds from the market if and when needed. The opposition says that such moves will cause investors to leave the sell the Canadian Dollar. The NDP has often said that the Canadian dollar is over-valued and has lead to a loss of manufacturing jobs. We do not fear such an event."