Thursday, March 01, 2012

Mystery budget on its way

The budget date was set yesterday, finally, for March 29th, possibly as a bit of a distraction from all things robocall. This should be good:
Flaherty said Wednesday the budget will not lay out in specifics where the government plans to find between $4 billion and $8 billion in annual savings over the next three years.

"There’s not going to be intricate detail," he told reporters in Ottawa.

"But there'll be enough information that it'll be comprehensible, that it will describe what we're doing in terms of the deficit reduction action plan, and much more than that, this is a jobs and growth budget."
Yes, the Flaherty budget kabuki dance continues. Flaherty said last week that it would be a "moderate" budget and not draconian. Economists in the past few days have backed up the point that there is no need for an aggressive budget in terms of cuts.

Then we had some publicity around a Nanos poll suggesting Canadians are ok with deep cuts. Not so clear that if enumerated cuts were put to respondents that they'd be so down with them. Which Nanos backed up: "The issue is that when you move from the idea of cuts to actual cuts that the appetite may diminish," he said." Still, the poll got lots of headlines suggesting Canadians support deep cuts. And then the next day, Flaherty announces his budget date.

Now it doesn't seem comprehensible that Flaherty could think he's going to be able to get away with not telling Canadians specifics about where the axe will fall. If we're indeed talking $4 to $8 billion in cuts per year, there will be great difficulty in masking how that's to be done. No matter how much they'd like to do so.

$4 to $8 billion out of a $265 billion budget doesn't sound like much as a percentage, which is the way Flaherty is presenting it. It's when you look at how that $265 billion is presently spent and then factor in the things the government has taken off the table (transfers to provinces/individuals: "We're not reducing transfers to the provinces or to people"), then look at what remains for cutting that proves difficult (scroll down to "Other Transfer Payments" and below on that fin.gc.ca page). It is why Flaherty would prefer to be vague.