Wednesday, October 31, 2007

The big announcement

I would have loved to stay home last night and write about Jim Flaherty's showy tax cut extravaganza....and I will have a go at it now, but I actually had something much more fun to do last night. I went to the Kelly Clarkson concert at Massey Hall in downtown T.O and I must say, it was awesome. More on that later.

So back to a very odd occurrence, a rushed economic statement from our man in the neon green tie, Jim Flaherty. So rushed, that in fact they have ensured that there will be little to no time to ask questions of any significance. It's quite the democracy they're runnin' up there:
The Tories rushed out the update, giving reporters only a 30-minute embargoed preview of the documents in a lockup before they were made public at 4 p.m. EDT. This cut by about half a day the advance time given to journalists to analyze budgets in lockups.
You know what that calls for...
Now about that 1% GST cut, I would much prefer that this percentage be instead directed to the cities for infrastructure and much needed revenue. In Toronto, we've been dinged with huge Land Transfer Taxes on the purchase of new homes that represent a major tax grab by the city as it tries to make up its $500 million deficit. And, on top of the increased thousands it will cost to buy a new house in the city, not to mention the added cost for sellers, we are in for what is believed to be at least another 3 to 4% property tax increase in the next year. So how exactly does a 1% cut in the GST help any of this? The nation's largest city is crying out for help and there's none to be had from the fat cats in Ottawa sittin' on their surpluses. The property owners in Toronto and municipalities across the country are going to be the squeezed ones. The GST cut in particular is obscene given how constructively those funds could have been used and not to mention the fact that it will make little difference in people's everyday lives. It's symbolic and people fall for it, but it's opportunistic politics and not doing the right thing.

And besides, when we see the news of the federal parties locked into the same percentages of support, time and time again, the latest being a Decima poll yesterday which Steve V and Scott Tribe posted on last night...this tells me that while news of such tax cuts is likely to move the Conservatives maybe a blip, they'll likely settle back to where they've been all along. People's views seem to be either hardened or content at where things stand for the time being. (And thanks to those bloggers for hammering on Bob Fife. I meant to do it last night, he certainly deserved it, but was, as noted, otherwise occupied.)

Consider also the fact that both the Conservatives and Liberals favour tax cuts. The Conservatives, for example, have just lowered the bottom personal tax rate with this announcement back to the level it was at under the Liberals, to 15%. The Conservatives had actually raised it to 15.5%. On tax cuts, they're not significantly differing in orientation, but for the GST folly. Dion has recently expressed support for corporate tax cuts as well. In such an environment where the major parties are inclined to support such tax cuts, it arguably cancels out any political advantage in an election campaign to either one of them. It appears to be a similar dynamic in Saskatchewan. Consider this article on the leaders' debate last night where they're all jockeying to provide the biggest tuition promise, the biggest education property tax reduction, the biggest prescription drug benefit. Who do you choose when there are similarly oriented tax policies? Likely the party you're comfortable with. So this tax cut issue may not be a big "mover" of people. We'll see.

So, it's an open question to me as to whether there'll be much ground gained of any electoral significance in the long run on this economic statement. The numbers haven't been moving to date. And there are too many issues at play at any given moment including Afghanistan, the environment, cities' needs, international affairs, the Conservatives' in and out overspending scandal.

And by the way, best line of the day had to go to the press gallery moderator sitting on the dais with Flaherty and Cannon who asked the last question of Flaherty at the Q & A. He said something like this, "Who are you trying to kid...this is an electoral gambit, right?" I don't have the exact wording, but the "who are you trying to kid" part was in there. I love that guy.