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  • PC Tax Hikes Unnecessary

    Over the last week, the Redford government has been floating a variety of trial balloons that have one common theme – tax hikes in order to curb our province’s expanding deficit (now up to $6 billion).

    First, Finance Minister Ron Liepert offered up the possibility of a provincial sales tax. When predictably Albertans shot that idea down, Liepert mused about bringing back the $1000 per year per family health premiums. When it was noted that the revenues from the old health premiums were never spent on health care, but were really just a head tax for the government’s general revenue fund, Liepert backtracked again saying that any potential new health premium would be unlike the old health premiums; yet he wouldn’t propose anything concrete.

    Then Premier Redford stepped into the fray, stating that Albertans want their government to look into ways of increasing revenues in order to stem the river of red ink flowing through Legislature corridors.

    It is the Wildrose Party’s view that Alberta does not have a revenue problem; rather its PC government has a spending addiction. The PCs have consistently increased spending over the last decade at a rate almost double that of inflation plus population growth. They have given themselves and government executives massive pay increases; they have done nothing to reign in the size of bureaucracy or limit public sector wage increases to the cost of living. We spend more per person than any other province in the country save Newfoundland whose small population and oil revenues skew their spending upwards (but at least their budget is balanced).

    Meanwhile oil is at $100 a barrel. Resource revenues including mineral lease sales are approaching an almost record $10 billion this year. Thanks to massive demand for our oil, unemployment in the province is very low (meaning tax revenues are healthy)…yet our cash deficit this year is nearly $6 billion. Roughly $4 billion of that will be drained from our savings fund (which is now down to $8 billion from $17 billion just 2 years ago); the remaining $2 billion short fall will be financed with new debt (which has increased from virtually nothing to nearly $6 billion over the last 2 years).

    If we can’t balance our budget now, when exactly do we plan on doing so? When oil is worth $130 a barrel (which would likely cause another worldwide recession)? When resource revenues double to lofty all time highs in 10-15 years? It’s a lot like you and I relying on winning the lottery every year in order to balance our home budgets!

    So what would the Wildrose Party do to balance the budget if we don’t want to increase taxes like the PCs? We’d do the following:

    We would save almost $200 million by reversing salary increases for the Premier and Cabinet, freezing management bonuses, reducing the number of government ministries to 16, and ending government grants to corporations.

    We would extend the capital plan from three to four years, saving taxpayers $2.4 billion in this budget year alone. This would bring infrastructure spending levels to just above that of BC and Ontario – a much more sustainable and fiscally responsible level. This spending deferral would include delaying or cancelling the $300 million new MLA office project as well as the $2 billion in grants to corporations for carbon capture and storage.

    Finally, we would restrain this year’s spending increase in core social programs like health, education, social supports and seniors to inflation plus population growth (still a 2.2% increase over last year), while freezing or slightly lowering budgets of lower priority ministries, saving taxpayers roughly $1 billion this year.

    The current European debt crisis didn’t happen because Europeans weren’t taxed enough. In fact, Europeans are burdened with some of the highest tax rates in the world. They are in the mess they’re in because their governments couldn’t control the urge to tax and spend their people’s money and to borrow on the backs of their children, in order to buy up the support of voters during elections.

    Let’s not allow Alberta to travel that same path. With just a touch of austerity and responsibility we can balance our budget and keep taxes low so our families can prosper and our entrepreneurs can create well paying jobs for us and our kids.

    The Redford tax-and-spend approach is not the Alberta way…at least not the Alberta I know.