HALIFAX, NS – Today, Stephen McNeil will officially unveil his high tax, high spend agenda – otherwise known as the Liberal platform.
Stephen McNeil will have some explaining to do.
FACT: In the last campaign, Stephen McNeil had the most expensive platform. It contained $527.75 million in new spending commitments with no plan to pay for them (see below).
FACT: Stephen McNeil said he will honour all $62.6 million of the NDP’s pre-election spending commitments.
FACT: The Liberals have no plan to balance the budget and no plan to lower the HST. In fact, the Liberals had to hire a pollster to see whether Nova Scotians think the budget should be balanced in 2013 or 2017.
FACT: Stephen McNeil thinks the small business tax is fine where it is. He doesn’t support the PC plan to reduce the small business tax rate to zero per cent.
FACT: The Liberals and the NDP are the same. Both have expensive agendas that result in high taxes, high power rates, more wasteful spending and lost jobs.
Isn’t it time for change that works?
LIBERAL PLATFORM; So, whose dog ate page 34?
Editorial, The Chronicle Herald
Saturday, May 23, 2009, p. A12
LIBERAL PLATFORM; So, whose dog ate page 34? LIBERAL Leader Stephen McNeil says his 32-page platform gives Nova Scotians a “full plan” for the future compared with the NDP’s “four-page pamphlet.” Liberal briefers even gave the press a 33rd page, itemizing the four-year cost of all the party’s promises.
The grand total is $527.75 million, of which $180.9 million is supposed to come (like financing for all of the NDP plan) from re-allocated spending.
But the plan is missing a crucial page 34. This would be the page showing us where the revenue comes from to pay for all the things on page 33.
That’s how budgets work. Revenue on one page. Expenditure on another. Bring the two together at the bottom line. There you have either a) more income than you spent (a surplus), or b) less income than expenditure (a deficit). If it’s b, you have to borrow and the debt’s going to go up.
Minus page 34, the Liberal plan is not a full plan and may or may not be a realistic one. It definitely isn’t providing the level of transparency and accountability voters deserve.
There are good ideas and bad ones in these 33 pages. But the package in its entirety is pretty meaningless (and would also be meaningless at 53 pages or 103 pages) if there’s no plan to pay for it.
Nor was Mr. McNeil reassuring in his off-the-cuff statements about paying for his promises. He said he won’t raise taxes, but will rely on shifting funds from existing programs – like the Industrial Expansion Fund – and on higher revenue from economic growth, which is merely hoping something will turn up. He can’t say if his plan will increase the debt without examining the books. But he’s already saying the PCs have put us in deficit, so how is it realistic to presume he can spend another $528 million?
There’s also a problem with expectations the Liberals have raised that the Industrial Expansion Fund can be raided for big budget savings.
The IEF is talked about as if it were a $175-million pile of cash that can be shifted to new budget priorities like Mr. McNeil’s pledge to cut the small business tax rate to one per cent (worth $30 million a year). But $175 million is the IEF’s borrowing authority – the amount of capital it can borrow in the markets and re-lend to businesses, often on terms that include a subsidy for meeting job targets or other government goals. What the IEF actually costs taxpayers is the value of the subsidies. Look at the budget estimate books and you’ll see the annual IEF expense was just $20.2 million for 2009-10.
So if the Liberals scrapped the IEF entirely – not likely; it’s a quarter of the Development Department budget – they’d save only $20.2 million in annual budget expenditures. That’s not enough to cover the impact of the small-business tax cut on the budget, without even considering the additional $11 million annually the Liberal plan pledges for enhanced business investment and research parks.
As we noted, there are attractive planks in this platform: the research parks, $10 million for public transportation, an emphasis on mental health services, a focus on energy infrastructure, micro-lending to very small enterprises, letting green power producers sell directly to customers, health and learning programs for preschoolers, a public list of roadwork priorities, rebuilding the church and adding a community centre at the Africville site. Paying tuition over five years for 100 doctors who would go to underserved areas is a good idea. It’s good value (taxpayers will pay more for one Halifax house call by Sir Paul McCartney than the first year tuition expense). But it won’t impact services for nearly a decade.
There are dud ideas, too: a toothless watchdog for de-regulated gas prices, telling the URB to consider “social responsibility” (whatever that means) in setting power rates, telling pension managers to invest in provincial infrastructure, telling offshore gas developers how much gas they have to sell in Nova Scotia (which might mess up financing and delay new projects), mandating when gas should be burned in power stations (shouldn’t that depend on relative prices?). This sounds like a lot of bossy meddling in complex investment decisions.
But the biggest problem is what’s missing, page 34, and the inconvenient fact that there just isn’t a $175-million IEF item in the budget to re-allocate.