The Canadian Press (CP) story on the 2005 budget ended with a paragraph about government spending increases for next year. We learn how much government will spend this year ($192.8 billion), how much spending is going up (8.8 per cent) over last year, and how much of its tax revenue the government plans not to spend (the so-called surplus).
CP gives us a figure of $8 billion which is more than the government admits, because the government hides money in contingency reserves. The money not spent is larger yet because the Liberals like to pretend that revenues will be lower than expected.
New spending information should have been in the first paragraph of the CP story. Governments spend money; it is what they do. It should be spent on our behalf. This is why we elect representatives, such as MPs. Parliaments and legislatures exist because governments raise money through borrowing and taxation and then they spend it.
The priority of the Paul Martin government is the bond market. Pay down the debt, and make Bay St. happy.
In this budget, what new spending there is is for the next five years, with the action taking place in the fourth and fifth years of the five-year plan announced by Finance Minister Ralph Goodale.
Liberal budgets have become a camouflage maneuver; they are intended to hide what the government is doing, not explain it. But like wine stains on white carpets, some things are hard to cover up.
The federal government is rolling in money. The spending cuts made starting in 1995 have been so important that the $100 billion in tax cuts introduced in 2000 will still leave the government with about $12 billion in cash on hand next year (fiscal 2005-6) according to CCPA economist, Ellen Russell.
Know your government by what it spends money to support:
- This a guns-not-butter budget. Over five years, $7 billion is to go to make war, $5 billion to look after kids.
- It is a reduce-the-size-of-government budget. About $7 billion is to be cut from existing programs.
- There is no new money for students. They get to watch as their tuition fees go up.
- Nothing is set aside for affordable housing. More homelessness is the logical result.
- It is a tax-cut budget: the biggest item is $12.8 billion in tax reductions. So the government will spend over the next five years but it will continue to shrink itself.
The greatest rip-off is the new privilege of RRSP managers to take tax subsidized savings in RRSP accounts and pension schemes and send 100 per cent of it abroad. Not so long ago 100 per cent had to be invested in Canada. That was normal. Canadians paid for the tax break, all Canadians could benefit only if it were invested in Canada
What should be savings, patient money for retirement, gets to become a speculative currency play. Hedge funds will be created uniquely to speculate in foreign currencies: aka, funds to undermine governments.
Welcome to the financial world of budget 2005 where we subsidize the speculators and neglect real needs while pretending there is not enough money to go around.
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