Budget leftovers? No thanks, I’ll order takeout

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If you woke up this morning feeling a little bamboozled and wondering why, wonder no more. The province just released its 2009 provincial budget.

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Opinion

Hey there, time traveller!
This article was published 26/03/2009 (5065 days ago), so information in it may no longer be current.

If you woke up this morning feeling a little bamboozled and wondering why, wonder no more. The province just released its 2009 provincial budget.

Wednesday’s budget continues our inexplicable journey on the road of mediocrity. When did success become a sin, achievement an afterthought? What is wrong with expecting more from our political leaders in terms of goals?

Budget 2009 plays it safe once again, and should have come packaged in bubble wrap. Manitobans are offered a steady diet of mostly meaningless tax breaks, a smattering of additional infrastructure funding, some improvement to access credit for business start-ups and a few incentives to encourage young people to go into trades and of course, free entry to provincial parks for the next two years.

Businesses receive their own share of modest reductions with the government hanging its entire economic strategy on the elimination of the small business tax rate. Yes, good news for new businesses just starting out. But what about when they want to grow? The payroll tax remains unchanged, waiting to pounce on any whiff of success. The corporate capital tax, gone in every western province, hangs like an anchor around the neck of those that look to invest.

We have in this province — indeed in all provinces regardless of political stripe — been blessed by a decade of economic growth. The decisions we made then are the decisions that will either allow us to stand on our own feet or ride the bench, content to allow federal dependency.

Dependency and debt are two things to think about as we review the 2009 budget, and reflect on past decisions that led us here.

Manitobans were told by government that we were living in a new golden age and that the dark days were behind us.

And for a decade we have been fed a pablum of mediocrity, fed the mantra of middle of the pack.

Funny how a bump in the road exposes the house of cards on which our provincial budgets have been built.

Instead of reducing our dependency on federal transfers, we find that 37 per cent of our budget comes from Ottawa. Considering Ottawa’s own current economic circumstances, the danger of such continued dependence is frighteningly clear.

Debt, and the financial legacy we leave our children, has again risen its head.

Budget 2009 finds our total financial obligations at $11.8 billion, up almost $1 billion over last year. That works out to $9,755 per man, woman and yes, even child — a staggering sum consuming an estimated $766 million in servicing costs and exposing future budgets to the inevitable rise in interest rates. The other debt-related budgetary news is that the government intends to again amend the balanced-budget law, which it only just gutted last spring, so it can reduce its minimal debt payment by some 80 per cent. Does one honestly believe that essentially forgoing debt payments is sound economic planning?

But surely you as a taxpayer will benefit. You’ve been inundated with a dizzying array of numbers, figures and comparisons to taxes paid in the previous century. Truth be told, you will absolutely pay less provincial income tax in 2009 as compared to 2008. A middle-income family will save $121 in personal income tax this year compared to last. Good news, until you realize that this family is paying 150 per cent more than they would living in Saskatchewan, B.C., or even Ontario. In fact, this family now is the recipient of having the dubious distinction of paying the highest provincial income tax in all of Canada next to Quebec. What happened to middle of the pack?

The most absurd part of the budget, however, is not just our government’s willingness to overtax its citizens, but the realization that for the first time in recent memory, there is no plan to address the situation. Usually the government, in its budget documents, will advise Manitobans its intention to reduce income tax rates or increase thresholds and exemptions as of Jan. 1 of the following year, a sort of "hang in there, we’re listening and we’ve got more coming."

Instead, in a classic case of hide the peanut, the government re-announced the 2008 tax changes, trying to claim them as part of this budget even though they all took effect almost four months ago. This inaction flies in the face of the premier’s "a promise made is a promise kept" and that he was "not elected to raise taxes." By breaking his promise, your taxes will essentially rise.

One can think of Budget ’09 as leftovers, warmed up with some Tabasco sauce slathered on top disguised to look fresh and appetizing. Manitobans should have no hesitancy pushing the plate away saying thanks, but I think I will order takeout tonight.

 

Shannon Martin is the Manitoba director of provincial affairs for the Canadian Federation of Independent Business.

 

shannon.martin@cfib.ca

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