The B.C. Liberals have hitched their wagon to a balanced budget and they have promised us a “prudent” hand on the reins. That means few goodies and cautious predictions. This bland document includes no surprises and it is not likely to make a difference in the May 14 election.
For voters looking at the budget and trying to judge where to cast their ballots, it’s going to come down to a question of whether the Liberals or the New Democrats will do a better job of managing the money.
Finance Minister Mike de Jong took considerable pains on Tuesday to explain how the budget was balanced, with a $197-million surplus for 2013-14. Beyond a discussion of its importance to the province’s bond rating, however, he left it to voters to figure out why it had to be balanced — if it indeed turns out that way.
The debate over whether a balanced budget is necessary or desirable in difficult economic times is over, as far as the government is concerned. It is sticking with its commitment.
The balancing act took tax increases, asset sales, MSP premium hikes, an end to some tax credits and limits on spending increases in areas like health care. It didn’t hit any group disproportionately hard.
Corporations and higher-income taxpayers will not be happy with the tax increases they face, but the Vancouver Board of Trade report card gave the budget B+ overall and A- for spending restraint.
The question of revenue projections looms large. Past predictions have been so far off the mark that the government hired economist Tim O’Neill to go over this year’s numbers and pronounce on their reliability.
When O’Neill said the natural-gas revenue figures were over-optimistic, the Finance Ministry dutifully took out $70 million.
The balanced-budget commitment left the planners little room for knock-it-out-of-the-park new programs that would lift voters out of their seats.
The down-the-road $55-a-month early childhood tax benefit and $76 million over three years to improve child care will appeal to parents of young children, but neither are likely to change any minds in the voting booth.
By the same token, MSP-premium increases and tobacco tax increases are not big enough to send the electors to the barricades in outrage.
When the Liberals were elected in 2001, it was on a platform of fiscal competence. After years of spotty performance in that field, they have produced a budget that is so safe, it is almost apolitical.
It’s easy to see NDP leader Adrian Dix producing a similar document. Indeed, the Liberals stole some of his election platform by announcing they would move up the one-percentage-point increase in the corporate tax rate to April 1 and temporarily increase the income tax on high-income earners.
Prudent financial management is less than sexy as a campaign strategy, but it gambles that voters are not in the mood for wild spending promises this time around. It gambles that avoiding debt, rather than ambitious spending, is the best way to ensure the health of the province.
Dix is likely to take a similarly cautious route in his fiscal plans, leaving the voters to judge which party will do a better job of safeguarding the public purse.
In the final analysis, this bland, safe budget looks nothing like past pre-election budgets. It is simply a stopgap measure, required by law, until we can see the document that matters — the post-election budget update in the fall.
© Copyright 2013