Liberals need fiscal agenda that adds up

Finance Minister Mike de Jong should be good with numbers. Two of them loom large: eight — the months left until the election...

Finance Minister Mike de Jong should be good with numbers. Two of them loom large: eight — the months left until the election; and, zero — the Liberals’ chances of victory unless they quickly demonstrate leadership.

So, what does it take to signal he can do the math? How about a fiscal agenda that adds up?

In its current poll, Angus Reid asked voters to rank government issues. Twenty-seven per cent said the economy was most important, up two percentage points in a month. The next most important issue was health care at 17 per cent, down three points in a month. Then came leadership at 14 points, up two.

Way at the bottom, in the one to seven per cent range, came all those “families first” issues that Premier Christy Clark has touted, such as tax relief, poverty, education, crime, housing, day care and homelessness.

This brings me to de Jong’s prescription for fiscal leadership. Last week, he launched a wave of belt tightening measures including an immediate hiring freeze across government and a wage freeze for public sector managers, including those in schools, universities and health organizations. He also hinted that he will tighten the screws in the already testy negotiations with the public sector unions.

The reason for this austerity is a $1.1 billion hole in the treasury thanks to plummeting natural gas prices. The first quarterly report for the 2012/13 fiscal year projects a $1.14 billion deficit, up more than $170 million from the original forecast.

De Jong said his belt tightening measures won’t go far enough to close this year’s deficit gap. Remarkably, he also said he will fight “tooth and nail” to balance the 2013/14 election budget, a feat that will force him to find another $390 million in savings.

To make matters worse the finance minister is hinting at corporate tax hikes. He is reviewing options for new business taxes because he is handcuffed to the premier’s families-first commitment to make the province more affordable.

“Everything you have heard Premier Clark talk about is about addressing family affordability, so in the days, weeks and months leading up to the budget, that is going to provide a good deal of the focus,” de Jong said.

There are critical elements of de Jong’s agenda that simply don’t add up.

First, most armchair economists would agree that during tough economic times the job of government is to help the economy expand. You don’t accomplish that by cutting back on government’s ability to stimulate the economy and deliver services and job creation programs. And you certainly don’t do it on the backs of the business sector which is responsible for growth and investment.

Second, Premier Clark’s families-first banner is hanging at half mast. Voters — like those polled by Angus Reid — have not bought into the proposition that tax relief, poverty, education, crime, housing, day care and homelessness trumps the health of the over-arching economy.

Clearly the public believes government should facilitate economic wellbeing first and let the family first benefits flow as a consequence.

Finally, while most of us applaud a government’s commitment to balanced budgeting, there is simply no evidence of widespread opposition to the government running a deficit in troubled times.

The Liberals’ zeal to balance the books and tighten the screws is wrong. They should do the math — eight times zero equals zero. M

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