VICTORIA -- When Finance Minister Andrew Petter let last year’s deficit cat out of the bag at last, it weighed in at $395 million.
The1997-98 deficit, meanwhile, is projected at $185 million, which means that, next year at this time, British Columbians will be a further $580 million in the hole, bringing the province’s total debt to $30.8 billion.
Listening to Petter’s budget speech, you’d think that was quite an achievement. The minister virtually gloated over the NDP’s fiscal prowess.
"This government remains committed to the goals of eliminating the deficit and reducing taxpayer-supported debt …," he told the legislature.
Where have we heard that before? Oh yes, during last year’s election campaign. Actually, the way the NDP put it then, the war against the deficit was already won. We could look forward to a "modest surplus." That was the surplus that eventually became the $395 million deficit.
Stung by last year’s budget fiasco, Petter stressed in his speech that the 1997-98 budget was based on "prudent economic assumptions." A good thing, too. Last year, the government ignored all prudent advice and warnings from its own staff and projected the famous modest surplus.
This time around, the finance minister consulted the private sector and came away with forecasts, ranging from economic growth of half a per cent to $3.75 percent this year. His ministry told him that a 2.2-per-cent growth was in the offing. Petter, wanting to err on the side of caution eventually arrived at his own "prudent" expectation of 1.6 per cent growth.
When all is said and Done, the government expects to have spent $20.5 billion at the end of the new fiscal year, while collecting only $$20.3 billion.
In spite of the shortfall and the government’s bad track record in predicting budgets and economic trends, Petter forged ahead with unbounded faith in the future and promised to bring down a balanced budget next year and a surplus the year after.
On the plus side of the budget, tax cuts introduced in 1996 are maintained. Those reductions included a four-per-cent drop in personal income tax phased in over two years. The B.C. Family Bonus – a monthly payment of up to $103 per child – will also continue.
On most other fronts, the government will extract more money from British Columbians. User fees will be hiked for numerous businesses and consumers.
Tobacco smokers will have to pay another 2.6 cents per gram. For a 50-gram pouch of tobacco, that hike amounts to $1.30.
Under "other revenue," the budget lists $55 million for various fees and licences, up from $49 million last year, an increase of roughly 11 per cent
Among the fees that will go up are probate fees, motor dealer and travel agent registration fees, angling licence fees, safety inspection fees for elevators, electrical and gas installations, and boiler and pressure vessels.
There will be a $15-per-cent surcharge on all provincial fines to help fund spinal cord injury programs and services for victims of crime. Some of these fee hikes were already announced earlier.
If you wonder just where all the money comes from that the government will collect and spend this coming final year, and where you might come in, here’s a partial breakdown:
Personal income tax -- $5.3 billion; Corporations -- $1 billion; Social service tax -- $3.1 billion; Fuel -- $623 million; Liquor -- $592 million; Tobacco -- $479 million; Lotteries -- $323 million; B.C. Hydro -- $373 million; Residential property tax for school purposes -- $507 million; Business property tax for school purposes -- $724 million; Timber sales -- $1 billion; Small business forest enterprise program $300 million.
Looking over the aforementioned partial list, I find that I’m a generous contributor to eight out of the 13 tax extraction rackets. Small wonder average British Columbians are flat broke after the government is through with them.