Wednesday, April 27, 2005

The finances of the budget deal

Coyne has tracked down where the money will come from to pay for Jack Layton's insisted-upon spending amendments to the budget. So if I may summarise here is how the back and forth went:

-Layton asks Liberals to get rid of the tax cuts and increase spending
-Goodale and Martin say these tax cuts are necessary and won't take effect for half a decade.
-Martin and Layton make a deal to implement the spending Jack wants but when announcing the deal fail to clearly explain where the money is coming from.
-Martin vows to re-introduce the large business cuts as separate legislation.
-Turns out that the spending will be paid for from contingency and prudence reserves that were earmarked for emergencies or if not needed to pay down the debt.

I'm not the loudest voice calling for debt repayment but all the same it seems disingenuous that Layton and the PM would make it seem as though this new spending were being paid for by eliminating corporate tax cuts when in fact it is being paid for by eliminating part of the debt repayment plan. But I suppose for some the prospect of a tough election for "Canada's natural governing party" is a situation worthy of government contingency funds. Seems like more shaky ground for the fiscally conservative Liberal MPs.

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