Saturday, September 26, 2015

If the “hole” in the Liberal 4-year Plan is not $6.5 billion, then explain how big it is



The presentation of the Liberal plan leaves something to be desired, with the Conservatives blethering about a $6.5 billion hole that will be filled with tax increases on the middle class and on seniors, and the NDP just going on about everything in general.

Here’s one explanation in Macleans of the incredible shrinking hole – down from the Harper dead cat on the table $6.5 billion to “only” $3 billion according to some Liberal sources:


The Conservatives, in response, allege that this review will result in a “$6.5 billion dollar increase in taxes.” To get to that number the Conservatives would seem, while ignoring the spending aspect of the review, to have added together the projected savings—$500 million in 2016/2017, $1 billion in 2017/2018, $2 billion in 2018/2019 and $3 billion in 2019/2020.

Using a similar approach in 2011—adding together several years of projected savings—the Liberals alleged that there was an $11-billion hole in the Conservative party’s costing. In that case, the Conservatives pointed out that the figures were cumulative. That is, the figures were not to be understood as unique to each year, but rather part of ongoing effort that would ultimately amount to $4 billion per year. And so it is with the Liberals now: the party confirming to me that the savings are to be understood as cumulative and ultimately amounting to $3 billion.




If the “hole” to be filled by cost cutting and tax loopholes closing is really only $3 billion over 4 years, then the Liberal Party should play this up right now, preferably with Trudeau explaining in some detail what the “hole” is, why it is not $6.5 billion, what programs are redlined and not to be cut (read my lips: no cuts to this and that), and with concrete examples of loopholes shut, costs cut, and revenues not counted but that could be counted (multipliers actually costed out, new revenue sources etc).

And make sure this is widely disseminated. So far, the Tories are winning the framing war on the very good, solid and defensible Liberal budget.

 PS Also, contrary to so many headlines, the actual expenditure over 4 years is not $147 billion - a whopping $74 billion of those increases in spending will be funded by scrapping existing child care programs put in place by the Conservatives. This $74 billion therefore means changing the money spent by the Tories on their slice and dice programs, to new programs to be implemented by the Liberals, aimed at those who really need the help.

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