Sunday, February 20, 2005

BC Budget reveals true Grit sensibilities

On February 15th BC Finance Minister Colin Hansen was in the enviable position of delivering the largest surplus budget the province has ever seen. $1.7 billion was earmarked for debt reduction, thus reducing the provincial government’s overall debt to $36.6 billion. As a result of this decision the province will save over $125 million in debt servicing costs this year alone.

But it was in where the BC Liberals decided to spend more money that the Liberal sensibilities of both Colin Hansen and his predecessor Gary Collins, were most evident:
$6.5 billion over the next three years has been dedicated to health, education, social services and environmental spending programs.
730,000 low income British Columbians will pay less or no provincial income tax, those earning $16,000 a year or less will no longer pay provincial income tax.
Single people earning less than $20,000 a year, while couples 65 and over and families of four making less than $29,000 per year will no longer pay MSP premiums.

Overall there were tax reductions totaling $484 million a year that were targeted almost exclusively at low-income earners. Yet despite these tax cuts and the additional spending next year’s surplus is projected to be $1.4 billion.

So for all those naysayers who said, “tax cuts don’t pay for themselves” take heed. They do. Another thing to keep in mind is that the BC NDP has never rescinded its promise to roll back “the Gordon Campbell tax cuts.” So for those of you hoping for an NDP victory on May 17th, your reward should they be successful will be more taxes, especially for low-income earners.

Of course the NDP have also been promising more spending for health care. Well while the NDP have been promising the BC Liberals have been delivering with $3.8 billion in increased annual funding since the Campbell government was elected in 2001. As Finance Minister Colin Hansen recently pointed out it wasn’t until the Liberals were elected that the BC Mental Health Plan was fully funded. The NDP had been content to announce, re-announce and announce yet again, but cruelly enough never actually got around to funding it.

As the father of two school age children I was very pleased to see an additional $622 million allocated over the next three years for kindergarten to grade 12 education. There is also $372 million to help create 16,000 news spaces for post-secondary education and $450 million for loan and grant programs for post-secondary students. Best of all future tuition fee increases have been capped at the rate of inflation.

Over $1 billion dollars has also been earmarked for road improvements and repairs, and $207 million for municipal and regional infrastructure and $81 million to enhance BC’s thriving tourism sector. Having worked in and around the BC Legislature since 1989 I would have to say this is the best provincial budget I have ever seen bar none.

It is not a statement I make lightly. I have said in previous columns and I will state again that Gary Collins will likely go down in history as one of the most able Finance Ministers this province has ever had. Collins did much of the groundwork for this budget and Hansen has shown himself to be a worthy successor to Collins.

I also feel the need to mention that both of these gentlemen are in fact federal Liberals. I believe that is worth noting because all too often we tend to assume that fiscally responsible government spending is solely the purview of Conservative governments. One only has to look at the disastrous deficit budgets that the Conservatives racked up in Saskatchewan under former Premier Grant Devine, or the surplus federal budgets achieved by Paul Martin to know that all political parties tend to have a mixed track record in this area.

Even the NDP, who in BC tend to be irresponsible tax and spend socialists, are in Saskatchewan much more prudent financial managers. In fact the NDP here in BC are so left wing that even Manitoba NDP Premier Gary Doer urged his BC brethren to adopt a more politically moderate approach.

Unfortunately Doer’s pleas seem to have fallen on deaf ears. NDP leader Carole James has surrounded herself with a very hardcore group of union activists and “former” Marxists as political advisors. One such person is Boyd Pyper, who during his days as a student at the University of Victoria was a self-described “Gramshite Marxist.” I’m not sure if Boyd is still a follower of Gramshi or Marx but he is certainly one of Carole James new generation of “moderate” advisors.

Similarly in a column published on January 18th in the Province newspaper, Mike Smyth revealed that one of Carole James’ new generation “moderate” candidates was in fact a former communist. Rob Fleming, who is now 33, admitted to Smyth that when he was in his early 20s that he was a member of the International Socialists and used to hand out copies of the Socialist Worker on downtown Victoria streets. Fleming is now the NDP’s candidate in Victoria-Hillside and will likely be the sitting MLA for that riding after May 17th.

All this points to a situation where during the disastrous Glen Clark era, most of the real moderates who had become involved with the NDP when Mike Harcourt was leader quit. Left behind was a group of “true believers” whose ranks were bolstered with the arrival of recently reformed Marxists and Communists who sensed an opportunity to slightly modify their ideology in return for a shot at achieving real political power.

What makes this all the more frightening is the fact that it is still not inconceivable that the NDP could win the upcoming provincial election. If that happens we will see one of the most left wing administrations in Canadian history. Now I write this not as some right wing ideologue but as someone who served as a Ministerial Assistant in the Mike Harcourt government and went to the same university at the same time as Boyd Pyper and saw first hand his political leanings.

As for Rob Fleming one of his claims to fame during his days at the University of Victoria was impersonating an electoral officer in order to have a political opponent’s signs removed. In fact I am still friends with one of the people who served as an electoral officer during that campaign and she has never forgiven nor forgotten the dishonorable manner in which Fleming conducted himself during that election.

I have written previously in this column about the conduct of Adrian Dix who was Glen Clark’s right hand man and like Fleming he also tends to subscribe to “the end justifies the means” school of political thuggery. Dix who is the NDP’s nominated candidate for Vancouver-Kingsway is also likely to be elected as an MLA in the upcoming provincial election.

The upcoming provincial election on May 17th does matter because it is the economic well being of our province that is on the line. I strongly support well-funded health, education and social services programs. I also approve of regulations that protect our environment and workers from harm. I also strongly support any initiatives that improve our transportation and communications services. But I also recognize that the only way we can have well funded public programs is to have a thriving private sector.

If you over tax, over regulate and treat business people as the enemy then investment will flee the province. This is exactly what happened during the Glen Clark administration. So as a result unemployment increased and health care suffered. So ironically enough those who want to vote NDP to help our health, education and social service programs will at the end of the day actually be doing more to hurt than help those areas.

In fact, regardless of your personal political views, if you want a good understanding of what it takes to make an economy prosper then I would encourage you to read “The Birth of Plenty” by William J. Bernstein. A colleague of mine at the Victoria Times-Colonist recommended it to me and I was not disappointed.

Bernstein points out that four conditions must exist for a nation to experience economic growth. They are:
· Property Rights, this means not only having legal title to your home and business, but also intellectual property rights so that innovators are encouraged to innovate.
· Scientific Rationalism, or as it is better known the scientific process where everything is subject to investigation and testing regardless of religious view or dogma.
· Capital Markets, entrepreneurs need access to capital (i.e. money) in order to help start and grow their businesses.
· Transportation and Communication Infrastructure, farmers, business owners and society at large need to be able to rapidly and efficiently move information as well as goods and services.

In 1820 all of these factors came into being in England and shortly thereafter countries like Holland the United States and Germany. The result has been sustained economic growth that has averaged 2% per year that has made all of us in the Western World wealthier.

To put things into perspective, prior to 1820 the life expectancy of the average European was 25. For these people life was indeed nasty brutish and short. Now average life expectancies are closing in on 80 years.

To put it another way, if the Romans had been able to put these four factors into place during their time, with sustained 2% growth per year, everyone reading this column would now be a multi-billionaire in real dollars terms.

The book also serves to explain why some nations, like Japan and West Germany quickly recovered from being almost completely destroyed in the Second World War while other nations, such as Communist North Korea and virtually all of Africa and the Middle East have remained mired in poverty and despair.