2012 FEDERAL BUDGET - LESS FOR LESS
Do not be fooled by the comforting language: Jim Flaherty’s budget 2012 will force every department of government to do less – and force you to expect less.
The most transformative budget in a generation will effectively eliminate the federal deficit in two years, at worst, by cutting back on everything from food inspections to the size of embassies, from park maintenance to CBC programming, from gathering statistics to delivering foreign aid.
The Finance Minister insists you won’t notice. The budget promises to save billions through ruthless administrative efficiency. Page after page promises to “merge back office functions,” “reduce overhead costs,” “modernize and align operations,” “rationalize redundant services.”
Nonsense. No government can slash program spending by 7 per cent, eliminate almost 20,000 jobs in the public service and relentlessly shrink the size of government relative to the economy without affecting services.
Phones won’t get answered. Grants will disappear. Museums will charge more. Courtrooms will be more crowded. Pensions will shrink.
Put it this way. Either you believe, as the budget promises, that VIA Rail will “pursue productivity improvements such as augmenting the performance of heating, ventilation and air conditioning systems on board trains,” or you believe passenger cars will be colder in winter and hotter in summer.
All this is for a good cause. The budget promises to eliminate the deficit in 2015-16, but that’s overly cautious. The deficit for 2014-15 is pegged at $1.3-billion, which is another way of saying Mr. Flaherty will balance the budget that year unless he chooses not to.
In fact, with the deficit pegged next year at $10.2-billion, a few good breaks on the economic-growth front and this could be the last year Ottawa runs in the red.
By cutting and then flat-lining spending, Ottawa will spend less on borrowing costs, which means it can spend more on Conservative priorities: building ships for the navy and buying jets for the air force; modernizing border infrastructure; improving the quality of education on aboriginal reserves.
Taxes can stay low, allowing each of us to keep more of what we earn and businesses to compete more effectively.
And to the Conservatives’ credit, the budget isn’t being balanced on the backs of the provinces, who continue to receive healthy increases in transfers.
The winding-down of at least some portion of the nanny state at the federal level will encourage both responsibility and initiative. This is what genuinely conservative governments value, and in case anyone still doubted, this is a genuinely conservative government – finally unconstrained by annoying opposition parties or inconvenient recessions.
Still, balancing the books without raising taxes or cutting transfers is painful, which is why most governments in the developed world aren’t even trying. In that sense, Mr. Flaherty’s budget is a model of probity.
But if you take the train, bring a sweater.