Thursday, February 26, 2015

The Wildrose Prentice Governments Austerity Strategy - What's Wrong with That?

What is the problem with the Jim Prentice Wildrose Government narrative about the financial situation in Alberta?

First, it is based on the “big denial”. It is based on the fact that our revenue base is over-reliant on oil and gas royalties which, though they favour the oil and gas companies, have enabled the Government not to have to face up to a real revenue problem – we don't have the right mix of taxes, user fees and corporate revenues. We need to develop a progressive income tax regime which taxes those earning over $150,000 higher than those earning $50,000. We need to develop a harmonized sales tax which generates significant revenue. We need to rethink royalties so that we manage to secure an appropriate return for all Albertans from their resources (we own the oil and gas, Total, Conoco, Shell are leasing from you and me). The “big denial” is that we cant do these things.

Second, its based on the idea that the problem is the public service and their costs. The reality is that this is not the case. While efficiencies can be found, 9% cuts across the board for the public sector is the cowards way of dealing with the artificial problem created by the Wildrose Prentice Government. Reducing the depth and range of service harms the poor and vulnerable. The rich can still do what they have always do – pay for alternatives.

Third, the strategy the Wildrose Prentice government will be aimed at encouraging a mild form of austerity. We know from other places that this lowers tax revenues, increases unemployment, increases demands on social services and health care and damaged the long term sustainability of social institutions, including schools, colleges and universities. This is of little concern to Wildrose Prentice – he wants to further de-professionalize these organizations and lower their cost, effectiveness and resilience.

All of this is ideologically driven. What Alberta needs is an alternative narrative, set of propositions and new leadership. Sadly, we don't have it. While I have a lot of time for Rachel Notley (NDP), the NDP carry a lot of baggage – not helped by the decision of Brian Mason to seek another term as an MLA (he carries some of the bags). The Liberal Party of Alberta – say no more. Killed off by Raj Sherman, the PC who crossed the floor in the most opportunistic way. The Wildrose is now the Tame Daffodil and impotent. The Alberta Party is a party in name only. Prentice will win a snap election, though it is likely the last election the PC Party will win.

What can happen now is that public intellectuals should speak out loudly and call what they see directly, bluntly and clearly. As we watch our carefully built world class education system – the leading English speaking system in the world – being stripped of its capabilities and attacked in very direct ways, we need to speak out. As we watch our health care system staff being challenged, we need to speak out. As we watch the rich benefit from all of this and the poor getting poorer, we need to speak out. Its time for straight talk.

1 comment:

Anonymous said...

Is tax , tax , tax all you can come up with.