Thursday, February 09, 2012

Why Flaherty was so upset with the PBO yesterday

Well, there was the main takeaway from Parliamentary Budget Officer Kevin Page's report release yesterday on the fiscal sustainability of Old Age Security that Flaherty would not have been too pleased with: "OAS sustainable under current rules, says budget watchdog." That main point runs counter to the government's messaging. And so, "...Kevin Page's report drew and [sic] immediate — and hostile — reaction from from Finance Minister Jim Flaherty, who dismissed Page's assessment of the program's sustainability as "unbelievable, unreliable, incredible."

This looks like the sleeper point in Page's report at page iii of his Summary that may have ratcheted up Flaherty's hostility:
In fact, the budget officer insists there is even some wiggle room for the program. The report said "the federal government could reduce revenue, increase program spending or some combination of both by 0.4 per cent of GDP annually while maintaining fiscal sustainability. This amounts to $7 billion in 2011-12."
$7 billion in present day budgeting flexibility would undercut the Conservatives' rationale for various austerity plans. Am no economist like our Prime Minister, but it sounds like a wrench was thrown into the Flaherty budget plans right there.

More on the fake OAS crisis: "There’s no old age security ‘crisis,’ PBO report shows."