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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

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

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]

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