Friday, December 02, 2005

Harper's costly promises

So... Stephen Harper will reduce the GST to 6 percent on taking office and to 5 percent within 5 years of taking office; A two percent reduction in a tax that increases revenue during a strong economy and reduces revenue when the economy weakens. Most economists would tell you to leave it alone. It also doesn't help that Harper was a Reformer (against the GST when Mulroney implemented it) and is now a Conservative (implemented the GST) which makes him look like he's trying to suck and blow at the same time.

Harper's next promise is to reduce waiting times for medical procedures. He accompanied that with the adamant assurance that there would be no independent private system. First, Harper hasn't said how he intends to execute his plan. His statement that he will hold governments (the provinces) responsible would be laudable if it hadn't already been tried before. His own home province of Alberta has always been the loudest opponent to federal health care funds coming with strings attached or performance monitoring, an objection echoed nearly as loudly by Quebec. (Alberta has a legitimate right to object. Federal transfer payments flow out of that province, not in). So, if Harper intends to supervise or monitor health care (and step into a provincial canoe) he must be planning to spend even more federal taxpayers' money on the system. Add cost, after reducing federal revenue.

What many people, including the media, seem to have forgotten is that just prior to the election, Harper promised to retain all the tax cuts and modifications that were passed by the Liberal government before it was brought down. There's a little multiplier there.

Cut GST by 2%, follow through with both personal and business income tax cuts, and throw more money at a recently increased health care budget. Something would definitely have to give, only Harper isn't telling anybody what he plans to cut out to pay for his promises.

So... Stephen... show us the money.

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