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03/23/2004 Archived Entry: "Grits present tight-fisted budget"

Posted by steve @ 07:40 PM EST [Link]

IT'S ACTUALLY NOT THE WORST BUDGET ANNOUNCED: Canada's Liberal government handed down the final budget before an expected election call sometime this year and shockingly they didn't spend like a poet on payday. Okay, let me qualify that...they didn't go insane announcing a raft of new spending.

Total government spending will be held to $183.3 billion, an increase of 4.4 per cent. The surplus for the fiscal year that ends March 31 will be $1.9 billion, another chip against the $510 billion federal debt.

It marks the seventh consecutive balanced budget, the first such run since Confederation.

Surpluses of at least $4 billion are projected for the next two years, as well, as the Finance department restores the $3 billion rainy day fund and $1 billion prudence cushion abandoned last year in former prime minister Jean Chretien's big spending legacy budget.

Compared to last year's spend happy budget, which was an orgy the likes of which hadn't been seen since Plato's Retreat, this budget is fairly tame. Of course, when it comes to the Liberals, spending hikes are all relative. No matter how big, there is always a hike and a 4.4 per cent increase is nothing to sneeze at. As our friends over at the Canadian Taxpayers Federation argue:

The budget does not contain any tax relief for Canadians, despite continued multi-billion dollar surpluses and an 8.9 per cent spending increase over the next two years. Under Prime Minister Paul Martin, the Liberal government's program spending (this figure excludes public debt charges) will total $143.4-billion in 2003/04, it will increase to $147.9-billion in 2004/05, and jump to $156.1-billion in 2005-06. In addition, estimated gross surplus figures will be $5.5-billion this year, $4.2-billion in the coming fiscal year, and $6.6-billion in 2005/06.

Spending, they say, will have rised 31.5 per cent since 2000.

That said, this budget is pretty meh in the sense that it isn't a surprise. Canada's government continues to meddle in every aspect of out lives and we continue to pay for it with high taxes and it's easy to run a surplus when you rig the system to take in far more than you actually need. A lot of journalists are calling this budget "fiscally conservative", a distortion so hideous that Milton Freedman would be spinning in his grave if he were dead.

For the first time in my life, I actually agreed with something that Finance Minister Ralph Goodale said. For years he was my bete noir on the issue of the Canada Wheat Board but today he lashed out at NDP Leader Jack Layton.

The real meat of the budget was in its managerial accountability and fiscal conservatism.

An aggressive 10-year commitment to reducing the debt-to-GDP ratio to 25 per cent from its current 42 per cent was lauded by economists but panned by social activists.

"Canadians wanted positive action and they're not getting it here," said NDP Leader Jack Layton.

"It's like paying down the mortgage when you've got a leaky roof, a sick grandmother and your child is trying to go to university. I don't know a single family who would do what Paul Martin's doing with our economy."

Layton's suggestion that it would cost Ottawa $200 billion to reach its 25 per cent debt to GDP target outraged Goodale at his post-budget news conference. He accused the New Democrat of "stunning ignorance."

"It's nuts, it's absolutely, flipping nuts," shouted Goodale, waving his arms for emphasis.

"On that point, he's 100 per cent dead wrong. . sorry, but it works me up."

Actually Mr. Layton, I've known a few people who decided not to pay the mortgage in favor of a leaky roof, a sick grandmother and a child that is trying to go to university. They're all homeless.

Read on.