So was a PST hike really necessary?

Well, I’ve waded and waded through pages and pages of the provincial budget, and I am not 100% convinced a PST hike was necessary.

Don’t get me wrong, I’m not a hack and slash advocate by any means ( It would be easy to say freezing government expenditures at 2012/2013 levels would yield a $100,00 deficit reduction without the PST increase – but that’s way too simplistic.

So where and what would I adjust? I have a bit of an issue when we have the highest use of food banks among homeowners in the country and we’re introducing regressive taxes such as PST (which hits low-income earners harder) while introducing boutique tax cuts such as elimination of school taxes for Seniors.

On the taxation side, I’d obviously eliminate the PST increase, but that would also trigger a reinstatement of about 10 million in tax incentives designed to offset the increase in PST.

The reduction of elimination of school taxes for seniors would be cancelled. Let’s face it, the majority of those that would benefit would be those that don’t need it.

The tax credit on custom software – gone. That’s an additional $8M

And the corporate tax exemption for Credit Unions? That’s gone. And it gets us $13 Million.

Cut the Film & Video tax credit by 50%, that would garner another $10 million per year. We have the highest rate in the country, and all the anecdotal evidence I hear is that it does not provide anywhere near the benefit to the economy as a tas incentive for any other industry. We don’t need to be the highest in the country, so lets scale that back.

Here’s a contentious one: Cut funding to Universities by $15 Million and eliminate the tuition freeze. Students will hate me, but study after study has shown that tuition freezes don’t benefit those who they are supposed to. They benefit middle and upper classes that can afford it. I’m actually suggesting a $20M cut with $5M redirected to bursaries. Tuition Freezes doesn’t make post secondary more accessible for those that can;t afford, they make it cheaper for those that can.

A cut of $10M to education, directed at private school funding. I believe while it is not unreasonable for private schools to receive taxpayer funding, the level of funding is too high. Cut it back.

Farmland school tax rebate elimination would yield $6.2M. I was torn between cutting this and departmental funding, but I kept the departmental funding, with a slight $2M decrease.

There seem to be several areas where there are significant increases over the previous year. I wouldn’t eliminate all the increases, but I would scale them back. Sorry Assn. Of Mb Municipalities, your losing $20M of your $40M increase this year.

Legislative spending – frozen. I’m not sure how you can justify a PST hike when you are increasing MLA travel expenditures by almost 50% and introducing almost $600K in new money for constituency offices.

Pushing the implementation of an enterprise system for Industry, Trade and Mines also yields $7.5 Million.

I haven’t quite offset the income from the PST hike, but it is a significant start. I think I’ve made my point that a PST hike wasn’t 100% necessary.

I think as a province we also need to look at tax fairness. I’d love to see a government increase the basic personal exemption to give more relief to lower-income earners. Normally I’d suggest a re-balancing and a corresponding increase to the top-level, but when you are already the highest in the country……..

As a province, I think our priorities need to be tax fairness for low-income earners, and an evolution of the health care system from a reactionary focused to a preventative focused system ( i.e. more spending on healthy living etc., which by nature would lead to reduced health care costs) – I’m just not sure how you do that.

So was a PST hike necessary? Well, I don’t think so. What do you think?