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?

 

 

 

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6 thoughts on “So was a PST hike really necessary?

  1. Yes a tax hike is essential. That being said, it should be an all party solution, rational presentation to taxpayers and the electorate, and a vote be taken by taxpayers.

    Further, before it is presented to taxpayers, all parties should sit down and tackle the issue of a bloated civil service and waste. They should first find savings there then they will find that manitobans will dig deep to get the province back on its feet.

    Breaking the law and lying why you are doing are 2 sins that cannot be tolerated.

    This issue isn’t about the tax, this is an issue where our leadership at all levels is prone to lie, cheat, and break laws with impunity. If this is the NEw manitoba, no thanks.

    • I don’t agree. If you can increase your travel budget by almost 50% and give yourself $600,000 more for your constituency offices, then clearly a PST hike isn’t necessary.

      I’m not against the concept of a PST hike, but when it’s being used to fund general revenue ( and yes, it is being used to fund general revenue when the infrastructure spending is less than the revenue is being generated) for spending on bloated non-front line services, I have a problem with it.

      Never mind that PST is a regressive tax in that it hits low income earners hardest. I’m not sure what the argument is to support a regressive tax that hits low income earners, coupled with tax breaks for middle and upper class seniors.

      • All I was suggesting is that it be an all party agreement. I also suggested that cuts need to happen to find savings. A tax to rebuild infrastructure is not a bad situation if properly engineered.

        Manitoba doesn’t have the resources to maintain itself so taxes are required but tough choices must also be made. usually that implies everyone at the tabgle is on the same page.

        Clearly in this province, at the municipal and provincial level, they seem to live in a bubble. I expect that is because they are well fed by the taxpayers.

  2. Reasonable suggestions for a few of the cuts.

    Tax credits really complicate the tax code and governments use them to curry worth select groups. The NDP government has chosen the path it has chosen and now you have to wonder of they really are headed in the right direction. Their piling on of a debt and taxing people while cutting some services makes them vulnerable like at no other time in their governance.

  3. The wealthy pay PST too! Can you think of a better way to acquire funds in a faster & more efficient manner? That bread helps pay for displaced flood victims & their million dollar Mona Lisa Restaurant bill! They are so hard done by dontcha know?

    • Good point. The PST is a consumption tax and you do have some control over what you pay. The wealthy per capita will pay more. My biggest been is that they are breaking a law and electoral promises made.

      Either they wait for the next election to explain what they want to do, or they get an all party agreement. At some point , whats left of the electorate must be respected. How better to do that than following the law.

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