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Falcon's Budget Simulator a 'Phony' Ploy, Says NDP

Finance minister unveils web app that allows public to try tweaking spend and tax priorities.

By Andrew MacLeod, 11 Jan 2012, TheTyee.ca

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Finance Minister Kevin Falcon unveiled a web application he says lets people give input on how they would balance the provincial budget.

The tool is limited in how much users can rearrange the budget, and depending on choices made, gives comments that lean positive or negative in the context they provide.

NDP finance critic Bruce Ralston accused Falcon of creating a "phony" impression the calculator would give the public more say over the next round of budget making.

Falcon announced the tool, sold by a British company, in a Jan. 10 speech to the Vancouver Board of Trade, but was unavailable for an interview.

"Balancing a $44-billion budget for 4.5 million people demands difficult choices," a government press release quoted him saying. "I hope this tool will help demystify the budget process and give British Columbians an opportunity to learn about some of the choices required to balance the budget."

The release noted that the website is one of the ways "the government is consulting with British Columbians in the lead-up to Budget 2012."

It's odd that Falcon would launch a consultation now, said the NDP's Ralston. "The idea any of this would be used for the 2012 budget is completely phony."

The Legislature's finance and government services committee held hearings around the province in the fall and released in November its report on what people said they wanted to see in the budget, he said.

Past finance ministers have spoken to the committee at the outset of its deliberations, but this year Falcon didn't bother, said Ralston, who has been on the committee for six years. "I think his commitment to genuine consultation is insincere."

Raising points

The website allows users to adjust revenues in nine different areas, including corporate taxes, income taxes, sales taxes, medical services premiums and the carbon tax. On the spending side, there are 10 areas to adjust, among them health care, education, childcare and community living.

Each time a user makes a change, the website calculates how it affects the financial bottom line and offers a comment.

If you were to raise corporate taxes, for instance, it says, "Raising corporate income tax would make the province less competitive compared to other provinces and countries, and would reduce long-term economic growth. Companies would decide to move to lower-tax jurisdictions, costing B.C. jobs and investment."

Raising personal income taxes, for comparison, brings this message: "B.C. families generally have one of the lowest overall tax burdens in Canada, and B.C. currently has the lowest provincial personal income taxes in Canada for individuals earning up to $119,000 a year."

As for tobacco taxes: "Substantial increases in tobacco taxes historically have resulted in increased tobacco smuggling which causes increases in administration and enforcement costs."

And medical services plan premiums: "Increased health funding, including MSP premiums, continues to support world-class advancements for health care in British Columbia, including the longest life expectancy in Canada, the lowest heart attack rate in Canada and the country’s lowest cancer mortality rate."

Thousands for priorities

There is something to be said for getting people to think about what it takes to make a budget, said former NDP MLA and strategist David Schreck. "It's a very good exercise to make people appreciate there are trade-offs."

The tool Falcon has put out, however, is simplistic and deserves to be ridiculed, he said. "It's an insult to any informed voter," he said, adding it might be useful for teaching a grade four class. "Falcon runs the risk of being laughed at."

There are strict limits on how big a change visitors to the website can make, Schreck pointed out. For example, the tool only allows any tax to be moved by 10 per cent. Corporate income taxes are now 10 per cent, so a 10 per cent increase would take it to 11 per cent, he said, noting that's lower than what NDP leader Adrian Dix has proposed or what Premier Christy Clark proposed last year when the government was trying to salvage the HST.

"On first blush, it's a propaganda exercise," Schreck said. "The agenda is to say they have to hold the line and even cut programs on the spending side if they're going to balance the budget."

The tool fails to acknowledge that the government already has to add spending of as much as $200 million on essential, underfunded areas, including filling judicial vacancies, community living and child protection, he said. That doesn't include the normal inflationary pressures on health and education or the desire for public sector workers to get wage increases, he said.

The software is provided by a company called Delib Ltd., which has its headquarters in Bristol, England.

The company's website offers answers to frequently asked questions, including ones about why a government might be consulting when its budget is already set or when "we won't be able to do what they tell us."

"Budget Simulator is designed to educate as well as consult," it says. "Research shows that as long as the public are told about and understand the reasons why you can't do what they want, they will feel more included and satisfied with the authorities spending. They will certainly be less content if they've had no opportunity to have their say."

The pricing for the budget simulator starts at 2,795 British pounds, or about $4,400 Canadian dollars at today's exchange rate, and goes up to the equivalent of $7,850 for an advanced version that gives "consequences" in real time like the B.C. one does. Custom versions cost more. [Tyee]

Andrew MacLeod is The Tyee's legislative bureau chief in Victoria. Reach him here.

26 Comments:

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  • Gary

    19 weeks ago

    It's a ploy alright

    And what this government is now admitting by trying this propaganda move is that they haven't got a clue as to how to "manage our finances".

    On to[p of that admission they are foolishly spending our well needed tax dollars on an exercise in futility. To say it's laughable is an understatement. It's morbidly hilarious.

  • DPL

    19 weeks ago

    Would you buy a used car from

    Would you buy a used car from the guy? I thought not.

  • Karen D.

    19 weeks ago

    I checked out this ridiculous

    I checked out this ridiculous application and the first thing I thought was "either Falcon is really stupid or he thinks we are".

    This is such an amateur means of trying to make the province think that no matter what they do to balance the budget, social services must be cut drastically. Falcon, and his simulator designers, have only further proven to the B.C. public that the B.C. Liberals aren't fit to run this province with their inability to manage fiscal matters.

    And, what the heck is the appointment of seven, mostly business people (some who are exceedingly generous with their political contributions), to review business taxes? Since the HST didn't work out is Falcon asking corporations how he can make it up to them?!!!

  • Grouchy

    19 weeks ago

    'Phony' Ploy

    I agree with Gary. This little toy also does not let us adjust things like MLA salaries and see the effect that abolishing MLA gold plated pensions would have on the budget. There is also one large section that we cannot adjust, probably because it contains the money that this government spends on useless items like the stadium roof, and pointless advertising, and photo ops for Crusty the Clown. Another thing we are not allowed to see is the budget for these ridiculous severance packages that aids and others get for just a few months work ( or so it seems ). There should be no severance for jobs that can appear or disappear at the whim of a political party. I have only played with it a bit, but it seems to be designed to show a deficit no matter what you do with it. Just more smoke and mirrors from our third world banana republic government.

  • Chris Keam

    19 weeks ago

    Spend the money elsewhere

    $7,850 would be better spent in the long run offering financial assistance to a deserving student wanting to enrol in BCIT's entrepreneurship program or something similar.

  • Grania

    19 weeks ago

    Too little too late

    Too bad this fool did not do this BEFORE the Olympics and HST and, etc., etc....why are we paying him to do...ummmm...what exactly IS his job these days?

  • irth1st

    19 weeks ago

    PR

    This site is just a PR stunt. Developing the budget, I'm sure is a bit more complex than suggested by Mr.Falcon, who is again spending our tax dollars on pre-election spending for his own party. How ridiculous and how much is this costing us?

    If business's are so put out by paying their fair share let them go do business somewhere else. Last time I checked though, other jurisdictions don't have the incredible natural resources that the prov. of British Columbia has. Let's raise corporate taxes immediately, hold profitable corps to ransom. If they don't want to develop our resources then we can do it ourselves under proper regulations and those massive profits will go directly into BC's bank acct. The buyers will still be eager China is a big market let's sell it directly without the largesse of the middle man. With limited non-renewable resources on this planet make them beg!

  • Waltz

    19 weeks ago

    It's a joke

    Try raising revenue for natural resources: for example, an increase in the minimum stumpage rate applied to most timber extracted from the public forests. You can't.

    Try raising revenue by increasing corporate taxes and watch the deficit increase.

    Someone commented on Twitter that the simulator must have been programmed by Goldman Sachs. It's a joke.

  • Skywalker

    19 weeks ago

    Yes Karen D.

    I think Falcon thinks we are all stupid.

  • Amelia Bellamy-Royds

    19 weeks ago

    "educate as well as consult"

    Well, that pretty much sums it up, doesn't it?

    I checked out the website when you posted the link yesterday, and that was my main impression. The tool isn't designed to gather opinion, it's designed to convince you ahead of time that the decisions the government will announce in the budget are the only necessary and practical choices.

    As Andrew MacLeod notes above, trying to increase corporate taxes or even tobacco taxes results in stern warnings about the dangerous effects. Increasing personal taxes gives us a reminder that BC currently has the lowest personal tax rate (a misleading statistic, since most other provinces don't have separate health care premiums of ~$700/year per single person). Increasing those same health premiums leads to a reminder about how important health care is. Come February, I'd expect both these rates will be increased in the budget.

  • Amelia Bellamy-Royds

    19 weeks ago

    Also, why can't you adjust natural resources revenues?

    As "Waltz" notes above, natural resources revenue is described in the introduction to the simulator as something outside the government's control, but the government sets the royalty rates same as other taxes.

    So the question is, are they left out of the simulator because the British company who invented it wasn't used to that being a major source of revenue? Or is the government just hoping that if they don't mention the possibility of changing these rates, people won't even discuss them?

  • Bucket of Oil

    19 weeks ago

    I have an idea..

    Stop advertising smart meters..Jobs in China...BC Hydro..ICBC..

    The BC Christy Clark party must spend a $hundred million per year on advertising..

  • DenisB

    19 weeks ago

    wages

    I have to endure zero wage increase while the excluded non-union managers get 10%/year plus semi-annual bonuses. For every dollar I save 90% goes to feed the bonus structure. Maybe if these increases were frozen as well things might improve. Eventually the province will have one doctor and one nurse and they'll still be looking for "efficiencies".

  • pwlg

    19 weeks ago

    they have painted themselves into a corner

    Tax reductions to corporations, elimination of taxes on banks, subsidies to oil and gas industry, privatization of power supplies, privatization of liquor sales, subsidies to the tourism industry, new roof on public stadium for private sports clubs, low log stumpage fees on public lands, excessive and increasing raw log exports, transportation infrastructure subsidies for the improved mobility of imported goods to travel through urban roadways to markets elsewhere in North America, leasing-selling of BC Rail, etc etc...

    Is it no wonder...

  • Howard William

    19 weeks ago

    Not so hard - tax the bads

    Jacked up Corporate, Tobacco, Carbon, Property Transfer Tax by 10%, threw in a 2% hike in Fuel tax; left everything else the same --> budget balanced with $7M surplus.

    Would love to be able to split out Pollution Tax from Corporate Tax, but anyway, i think this shows there's financial merit in "taxing the bads"...

  • cfvua

    19 weeks ago

    Subsidies

    A complete bad joke. Falcon hasn't left us a way to elimiinate subsidies and tweak royalties to add to revenues or calculated in the cost of lost revenue due to not collecting PST that should have been paid by out of province companies bringing in equipment, etc. No way to adjust for things like the $30 Million and $6 MIllion hush money paid out in a couple of recent court cases.No way to increase income taxes by ensuring that BC residents are actuallly doing work at home, not transplants from one province east that pay income tax at home. Hopefully the liberal brain trust can come up with something a little more meaningful when it comes to real budget solutions.

  • frank2

    19 weeks ago

    Lots of things wrong with

    Lots of things wrong with this "simulator' as pointed out above. But the basic idea of developing such a tool for REAL consultation should be taken up by the Finance Committee of the Legislature in making its recommendations at an earlier stage of the budgetary process than the present.

  • Henry Dorsett Case

    19 weeks ago

    contrived

    I just wrote the program and it is completely contrived. The whole thing is skewed to prefer minimal increases on corporate taxes - no mention of wealth taxes at all nor bank taxes - etc.

    The one nice thing about it is you can type up a little message for Kevy and the BC Liberal crooks at the end.

  • Cynic

    19 weeks ago

    And there's no way to suggest

    And there's no way to suggest that government raise revenue by having the Bank of Canada buy its bonds. Interest payments would be returned to the province as a dividend, minus a small administration fee. This would help reduce the debt and get rid of any deficit. But no. This ploy reinforces the fantasy that money is scarce, that these are "tough economic times", that our options are few. Nonsense.

  • kmdyson

    19 weeks ago

    silly

    It only allows a 10% increase in corporate taxes...it can easily be fixed by letting the person tweaking the budget put in the corporate tax rate...a 25% increase in corporate taxes will soon fix any shortfall...so I couldn't balance the budget...using this ridiculous application...

  • Vox.Pop

    19 weeks ago

    Gimmick

    What do you expect from a government where the top 70% of premier's helpers are spin meisters?

  • raging senior

    19 weeks ago

    Balance the Budget

    Like other polls the Government puts out, if they like it they will use it as propaganda,if they do not like it will enter the trash can - eg: the $20 million poll on treaties for aboriginals.

  • igbymac

    19 weeks ago

    There isnt a person in government ...

    or opposition that can offer a solution to our economic woes. There isn't one with the knowledge or depth of character to even table such a thing.

  • Old but wise

    19 weeks ago

    Did any of the corporate newspapers pick up on this?

    Did any of the corporate newspapers pick up on this? Likely not!

  • MacKenna

    19 weeks ago

    BC Liberals worst money managers ever

    BC Liberals gave themselves huge raises and hired incompetent business clowns like David Hahn and they paid them ridiculously inflated salaries. BC Liberals illegally ripped up union contracts, then contracted out non-medical health services to the most piggish and corrupt multi-national corporations who hoard public money while they downgrade services (hospitals aren't cleaned properly, improperly trained workers are paid bottom of the barrel wages; long term residential care workers are fired repeatedly, then rehired at lower and lower wages). There is so much wrong with the BC Liberal Party it makes me want to spit. During a period of economic prosperity when corporations were making huge profits, these clowns lowered corporate tax rates and kept the minimum wage as low as possible. These clowns catered to every whim of the richest corporations while they destroyed services to the middle class, and jacked up the poverty rate.

    Corporations in BC are so spoiled that one of them - Catalyst - actually fought to pay NO TAX in Powell River where it lives.

    Those corporations that have no allegiance to the communities they live in, could care less about citizens or the environment or this country, can always count on the BC Liberals to be their salespeople

    The demise of the BC Lib-Socred party can't come soon enough for this gal. I am sick and tired of these charlatans. They don't represent me.

  • zalm

    18 weeks ago

    Nice job, Howard William

    "Jacked up Corporate, Tobacco, Carbon, Property Transfer Tax by 10%, threw in a 2% hike in Fuel tax; left everything else the same --> budget balanced with $7M surplus."

    Been waiting for someone to prove what I've been saying for years. Surprising to find it in an obviously-flawed model touted by a realtor with a big mouth. I'd nominate you for finance minister - the current crop seem totally unable to master the math and ethics.

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