A budgetary no-brainer

Opinion

Hey there, time traveller!
This article was published 16/03/2024 (544 days ago), so information in it may no longer be current.

Manitoba’s entire provincial budget is about $20 billion. That is a lot of money. So is $1.6 billion, or eight per cent of the budget, which happens to be both the amount of the provincial deficit (or operating shortfall), as well as the amount promised in tax cuts by the previous Conservative government.

You would think it is a no-brainer to not proceed with tax cuts to help balance the budget.

It depends if, in budgeting, money invested is seen as a means or an end. What could those tax cuts fund with the most beneficial return on investment?

The biggest budget losses are from income tax cuts, costing the provincial treasury $808.5 million a year. Those are where those with the highest income benefit most, including from raising the income tax earning exemption to $15,000. (This is the income before anyone pays taxes.) This $808.4 million could repair and subsidize all of the 2,000 Manitoba Housing units currently vacant, plus at least another 10,000 units a year. Ending structural homelessness in Manitoba.

The reduction in the PST, the provincial sales tax cut, costs us collectively $408.3 million per year. That amount could double the funds paid by Child and Family Services (CFS) to provide for the almost 10,000 kids in CFS care. Per diem rates for foster families and kinship placements have not gone up for 12 years. Some of that $408 million we are cutting could support families to proactively prevent abuse and neglect instead of apprehending kids. A separate prevention fund would ensure current kids in CFS don’t lose out so other kids are not abused or neglected, a problem with the new funding model.

The education property tax cut is pulling $314.5 million from Manitoba schools, leading to teacher cuts. These funds are not replaced by meal programs. This amount could help ensure every child meets their developmental goals, ready for school and learning. At minimum, the NDP government could ensure corporations, especially those not in Manitoba, don’t get the education property tax credit, putting millions back into public education. Certainly, the owners of Polo Park should not get funds instead of Manitoba schools.

The business tax cut of $64.8 million could more than double the number of people getting support to pay their rent through the Rent Assist Program. Which would mean another 11,000 low-income renters have real money for groceries and other essentials.

The $700,000 in other tax cuts could begin to offer mental health services to people on Employment and Income Assistance, who currently have coverage for prescriptions but not therapy to address any trauma, which make it difficult to keep a job. A new portable health benefit, similar to Rent Assist, could help people move into and stay in the workforce.

The gas tax cut is on top of the $1.6 billion in tax cuts. Another $323 million a year cut, which could double the entire child-care budget. This would fund the training of more child-care workers, raise their salaries and build more child-care centres and $10-a-day spaces for the thousands of families on wait lists. More child care means more people working and contributing taxes.

The Manitoba government could easily make the case for these wise budget choices, because government members know the benefit of closing the gap between those with the highest incomes and those with the lowest. They understand the research that shows societies or provinces that are more equitable are more stable and secure. The new government members understand there is a huge social return on investment from supporting people struggling most, with both immediate benefits plus savings in justice, medical treatment, CFS, and other areas in the future.

The new government could run an ad campaign, much like they are running to promote the gas tax cut, to instead promote the benefits of a more equitable province and the social return on investment by reweaving our social safety net, improving social inclusion and equity in Manitoba.

The government could do the political work required to improve social solidarity between middle-income and lower-income Manitobans, building support for how investing in marginalized Manitobans is a better use of funds than tax cuts.

The government ads could educate Manitobans about how improving the social determinants of health for people suffering from abuse, poverty and trauma will save money in medial care. And how these social conditions or determinants have the most significant impact on health outcomes. This is more complex than short term tax cuts which make social equity worse. Simplistic budgeting is costing us too much.

Those of us in the middle tax bracket who vote and are the target of the tax cuts can understand that if we prefer not to have our homes broken into or cars stolen, or if we want to feel safe going downtown to watch hockey or theatre — without being confronted by people self-medicating, pan handling or sleeping in doorways — then we best support prioritizing eliminating poverty, abuse and neglect though remaking our social safety net.

Marianne Cerilli works in health education, community development and politics. For more about a trauma-informed budget go to reweavingsupport.ca