A budget that ignores the danger signs

Perhaps you were expecting something different. Maybe you hoped last week’s provincial budget to put Manitoba back on a path toward balanced budgets. It’s possible you anticipated our NDP government would show some sort of spending restraint, even if was to simply hold the line on spending increases. 

If those were your expectations – and it is safe to say that many of your fellow Manitobans shared them – you have every right to be disappointed. 

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This isn’t a budget that even pretends to care about deficits (instead of going down, this year’s deficit will be larger than last year), the province’s skyrocketing debt burden, nor the millions of dollars in interest paid each year to service that debt. 

This isn’t a budget that respects the balanced-budget law, and it ignores the fact that we were warned just a few months ago that our credit rating would be further downgraded (which would result in increased interest rates and higher debt payments) if the government didn’t get its spending under control. 

My kids have an expression that seems appropriate at this moment – “YOLO!” – which means “you only live once” and implies that you don’t care about the consequences of your actions. After reviewing this budget, it’s easy to see premier Greg Selinger, finance minister Greg Dewar, Brandon East MLA Drew Caldwell and the rest of the NDP caucus yelling “YOLO!” before the budget speech, exchanging high fives as they smother Manitoba in a debt load that our grandchildren will struggle to dig themselves out from under. 

So much for the general impression. Let’s look at some of the details that should concern you. 

The Selinger government claims to care about families and the working poor, but the evidence suggests otherwise. Ordinary Manitobans are going pay more income tax because of this budget, making it harder to feed and clothe their kids, pay their rent, or make their mortgage payments. 

A two-income family earning $76,000 will pay four per cent more in provincial income tax thanks to this budget. On top of that, the budget failed to adjust tax brackets for inflation (“bracket creep”), meaning that thousands of Manitobans will find themselves paying income tax at a higher rate. 

On a related point, our NDP government is taking credit for finally increasing the shelter allowance for Manitobans living on social assistance. The rates had been frozen for more than a decade, making it very difficult for the poor to find safe housing.

Far from deserving credit for this move, the NDP repeatedly refused to increase the allowance until opposition leader Brian Pallister promised to do it if his Progressive Conservatives win the next election. In other words, it wasn’t the NDP’s idea at all.

The biggest flaw in this budget is the NDP’s insistence that the province can spend its way out of its fiscal problems, and that spending restraint is unnecessary. The problem is that revenue increases are not keeping pace with spending increases, and the situation will only worsen when federal transfer payments are reduced in the next few years. 

The provincial government has 20 departments, but six of them (health, education, justice, jobs and the economy, infrastructure and family services) consume more than 85 per cent of provincial government spending. A genuine effort to balance the budget -- something our lenders insist we need to do -- will inevitably require us to find savings in those six departments.

Finding over $400 million in annual savings won’t be easy. Doing so would have painful consequences for many Manitobans, especially government employees. The alternative is raising taxes yet again, and making the province even less competitive compared to neighbouring provinces. 

There are tough choices to be made, but it requires an honest discussion with Manitobans about the danger posed by years of deficits and record debt levels, and the options available to fix the problem. 

Judging by last week’s budget, it is a discussion that our NDP government desperately wants to avoid – at least until after the next election.

 

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