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politics

Budget 2012: Apocalypse Deferred

The Liberal budget has little to please and something to annoy everyone. But the only question that matters is, will it cut the deficit?

There’s a through-the-looking-glass feel to watching the budget delivery. First, the government stands up and explains why this is the fairest and most commonsensical distribution of resources since Solomon offered to chop a baby in half. This is immediately followed by the leaders of the two opposition parties proclaiming it the most reprehensible document ever to hoodwink a gullible public.

It is, of course, neither.

No one expected it to be popular. Budgeting in tight times isn’t easy; we can only steal from our future selves for so long before they become our present selves and we have to give something up to pay ourselves it back. Some thoughts:

The Good

Notwithstanding Tim Hudak’s frothing at the mouth over entitled public sector unions, or Horwath’s motherly brow-furrowing over whether the arbitration process is being properly observed, the Grits got it right on their treatment of the public-sector unions.

In an approach telegraphed long before budget day, the Liberals advised that they would be looking for wage freezes and pension concessions, with the expectation that government and unions will “come to an understanding, together.”

Should the unions be unmoved by the call to congenial collaboration, well, there’s a catch or two. For example, if teachers don’t play nice, it just might cost us all-day kindergarten or mandated class sizes, along with some ten thousand jobs. And the government won’t hesitate to “propose necessary administrative and legislative measures.” (Cue devil-child choir music from The Omen.)

Contentious for sure, but given that that compensation constitutes the largest portion of the budget, not dealing with it would eliminate any possibility of eliminating the deficit by 2018, or for that matter by 2118.

Another budget win is the widely-expected postponing of the corporate tax cuts scheduled for 2012 and 2013. Taxes are already respectably low in Ontario relative to competing jurisdictions, and taking them lower is neither necessary nor desirable right now. Along with public sector executive pay freezes, this populist move should buy some NDP and maybe public support before the upcoming vote.

The Bad

The biggest downside is potential labour unrest. Will the unions doff their caps and chirp “Thanks Dalton!” while cheerfully taking their medicine, or can we look forward to work disruptions and grim mobs on the lawn of Queen’s Park a la Common Sense Revolution days? If the Liberal bat isn’t big enough to get the proles to play ball, it could be a long, hot summer.

Also disquieting are the big-dollar savings attributed to as-yet unidentified “efficiencies” in various ministries: $100 million at Citizenship and Immigration, $117 million for the Attorney General, $121 million for Training (Colleges, and Universities).

Overall, the budget talks about $4.9 billion saved here. While these efficiencies may be real (although, why didn’t we think of them sooner?), without deep analysis and detailed planning the numbers included in today’s budget proposal can only be educated guesses at best, and could prove wildly off the mark.

There’s also at least one glaring omission. The budget doesn’t account for the omnibus crime bill recently passed by the federal Tories, which the McGuinty government has predicted will cost the province cost $1 billion in housing for an influx of new prisoners.

Endgame

The government has produced a hard-times budget that walks a middle road, not really pleasing anybody.

Both NDP and Tories responded by flailing around like flies in maple syrup screaming “too much!” and “not enough!”, for predictably opposite reasons. That, however, is the best that could have been expected, and the outrage from left and right may indicate that the Liberals have finally located their cojones and stopped trying to please everybody.

The budget won’t force an immediate election. Tim Hudak has already said the PCs won’t support the minority Grits on the budget, but it’s a near certainty that the NDP will, given that the electorate doesn’t want (and the parties can’t afford) an election.

The budget is far from perfect, and there will be some negotiation before it comes to a vote. Huge changes are going to be required in the way the government does business, and only time will determine if the numbers truly crunch in the right direction to kill the deficit by 2018 as promised. But it’s a fair start.


See also:

BUDGET 2012: PUBLIC SECTOR ON ALERT
BUDGET HIGHLIGHTS
BUDGET 2012: OPPOSITION PARTIES REACT

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