Jim Flaherty came through with an interesting and, I would say, very optimistic Economic Update (mini-budget, whatever) yesterday that aimed for something that all voters love to see under financial siege, Government Agencies and MP’s.
No Debt Financing?
With some very creative and optimistic accounting, the Finance Minister is promising to try to have either balanced budgets or very small surpluses up to 2013, which is very contrary to what most economists are saying is possible in the current economic instability (i.e. Financial Apocalypse).
Flaherty did couch his optimism with the following cold statement:
“Any additional actions to support the economy will have an impact on the bottom-line numbers in our next budget. These actions, or a further deterioration in global economic conditions, could result in a deficit.”
So he isn’t saying there will be deficits, just that there will be measures taken to avoid debt if possible.
Take that Ottawa Fat Cats
No, that is not a real Ottawa fat cat, it’s my cat from when I lived in Kitchener, but he is a good metaphor for the “Fat Cats” in Ottawa.
Some of the measures against the “Ottawa Fat Cats” taken will be:
- Elimination of the $1.75 per vote allowance to support political parties that receive more than 2 per cent of the vote, staring April 2009. I really like this one, because all of the politicians are howling about it, so it must be a good thing.
- Wage controls holding increases to public servants, including MPs and senators, to 2.3 per cent for last year and 1.5 per cent for each of the next three years. I really like this one, because the MP’s are mad about this as well, and the public service doesn’t like it either.
- Slash cost overruns on government travel, hospitality, conferences, exchanges and political services, this sounds like something they should have been doing already? What exactly were they doing before this, wait, I don’t want to know the answer to that one, so please don’t answer.
- Provincial equalization payments are gauged to the average GDP growth over a three-year period. Can’t wait to hear Dalton McGuinty tirade about this one.
- No mention of any extra taxes, but since this is not a budget, then I guess nothing has to be mentioned about that (yet).
Other Steps
Some pro-active steps being taken are:
- Giving $350 million in equity into the Export Development Canada and another $350 million in equity into the Business Development Bank of Canada. Interesting, guess I should send my resume in there since they might be hiring soon.
- A scary one for soon to be pensioners is allowing federally regulated pension plans to spend 10 years instead of five to make solvency payments if necessary. This is a slippery slope I think and it could end up like some of the private pensions that are woefully underfunded these days.
- Only allowing seniors to withdraw $7,500 instead of $10,000 from their Registered Retirement Income Funds (RRIFs), which is supposed to slow the cashing in of stocks and mutual funds I guess.
There are different forms of proportional representation,and not all would involve people who answer to no constituents. For example, the single transferable vote system has constituencies with multiple seats. That’s the system that is being proposed in B.C. (they had one referendum where they didn’t get quite the needed 60% but they are supposed to have another referendum in 2009).
I have nothing against minority governments per se. I quite liked (if I can be said to have liked something I was not alive to see!) the 1972-1974 Liberal minority government (propped by the NDP and David Lewis of “corporate welfare bums” fame). Or what about Lester B. Pearson’s two minorities, which implemented such key Canadian concepts as universal health care, the Canada Pension Plan, our flag, and the Order of Canada, and also convened the Bi and Bi commission?
Proportional representation? Goodness you want people in the house of commons who answer to NO constituents whatsoever and never see a majority government ever again?
Liberal/NDP coalition? More likely to see Jack Layton take over as Liberal party leader :-).
I am against the eliminating of the subsidy to political parties. That $1.75 is the only effect my vote has had the last few times. In the first-past-the-post system, the only votes which count are those that are for a winning M.P. This subsidy ensures that if nothing else, at least the party of my choice will get a little bit of money for my vote — which will perhaps help them be slightly more effective in future. The only way I would be for the removal of this subsidy would be if we were to switch to a form of proportional representation.
I wonder if we’ll end up with a Liberal-NDP coalition — these sure are interesting times!
No, my view of government expenditures and such is coloured by the fact that I know a lot about how the bureaucracy works in Ottawa (unfortunately).
If any business had the rules the federal (don’t know about provincial) government had for:
1) Hiring
2) Budgeting
They would be out of business quickly.
Surprisingly I am not a Conservative I am a Civil Libertarian and view Government’s role in our lives should be minimized.
I agree the U.S. “pork trough” is a worst case example of how a government should work, but no government is a Utopia, and all could use better fiscal controls and management.
Is this all a ruse by the “Conservatives” to force an early election and catch all parties off guard? I think that may be true also.
However, I do not condone wholesale changes to our way of governing (Democracy seems to work best), but lots can be fixed!!!
C8j said: “Government spending should be well behaved, above board and completely explainable to every voter, and I don’t see that right now at all.”
MOST voters don’t balance their chequebook, and many could not complete an accurate personal net worth statement. For your statement to have any amount of reason, the voting public would have to be much more financially literate than is currently the case.
Government is a large bureaucracy, I don’t challenge that, but I am amazed that you don’t seem to want to accept it would be expected to behave as such!
Small business is not always so lily-white, either. I have seen many which operate solely for the benefit of the owner, to the detriment of those poor souls who get stuck working there.
Our view of government expenditures and taxation is coloured by the inundation of the media from south of our border. It might be sensible to look to the governments of Europe for comparison rather than our neighbours to the south. Europe seems much more civilized.
DAvid
You don’t live in Ottawa do you? Government spending is always out of control (it is the nature of large organizations), as for your last paragraph, I find it interesting that this argument is brought up all the time when any kind of fiscal responsibility is espoused by anyone. It smacks of the U.S. where if you question the cost of “security” you are branded a “Terrorist lover”.
Government spending should be well behaved, above board and completely explainable to every voter, and I don’t see that right now at all.
My opinion only, but simply saying, “Without government we’d all die”, is a bit of an overstatement.
Count three for the vote subsidy. Given the current situation, it appears as a direct shot against all the opposition parties, who support Canadians with lower income levels. Lower income Canadians are less likely to be able to afford to contribute financially to party politics. The tax savings equate to the price of a cup of coffee each. The six new ministries cost far more, as did the unnecessary election. This is a small cost to pay to help balance to scales of democracy.
Further, cutting Federal employee wage increases to below inflation just builds a poor public service. Government employees, just like those in the private sector will take opportunities elsewhere if they feel undervalued. You then end up with a civil service unable to deliver the services required of government.
Your comments seem to suggest that the government bureaucracy should somehow behave far differently than the businesses with which it interacts. I shold not promote it’s products, values and services; should not educate people as to the expectations of regulation or services offered, and should not attempt to meet its’ obligatory mandate. These tasks require more than an empty desk with a dead phone on it. It requires competent staff with the ability and the tools to complete the work of government.
Or maybe you feel that melamine-free infant formula is unimportant, there is no need for border security, anti-terrorism activities, drinkable water, a court system, or many of the other services paid for through our tax system.
DAvid
I agree with Quick Lunar. That way is a great move to shut down the Green Party.
Personally, I’m incensed that the conservative government is planning on eliminating the public subsidy for votes, as this was put in place to compensate for the fact that corporate and union donations were severely curtailed. This subsidy was also a very positive step to “making votes count”, as it reassured voters that even if their candidate didn’t win, at least the party benefited from this vote.