18 MARCH 2009
The provincial budget received a failing grade from New Brunswick’s newest political party, the Greens. According to party president Janice Harvey, it will take the province in exactly the opposite direction from that set by the party’s Charter of Principles, which includes a commitment to equality, social justice and ecological sustainability.
“The most significant feature of this budget is its retreat from progressive taxation and the principles of social equity,” Harvey observed. Referring to the collapsing of the graduated tax structure to two income brackets, she said, “It represents the near-abandonment of the progressive tradition of using the tax system to more equitably distribute wealth generated by the economic system.” The government’s tax changes will dramatically reduce the taxes paid by high income earners relative to low income earners. The new corporate tax rate at 8% is the lowest in the country. Together this represents a massive cut in tax revenues needed to fund public services, growing to over $400 million in four years.
According to Harvey, the government is still clinging to the discredited theory marketed by the Fraser Institute and the Atlantic Institute for Market Studies that lowering taxes on corporations and upper income earners will stimulate investment and attract workers. On the contrary,” she said, “this worn-out model of trickle-down economics has only resulted in widening inequality between rich and poor, a shrinking middle class, and a deterioration of public services.”
Harvey predicts the tax cuts will do nothing to stimulate the economy in this recession, but instead will result in huge deficits with no plan to compensate for the lost revenue other than throwing hundreds more people out of work and cutting back on services. “It will deliver a body blow to the whole concept of equal opportunity which fuelled New Brunswick’s coming of age by reducing our ability to pay for already-deficient education, health and social services. This government is using the cover of the recession and the public’s willingness to accept big deficits in the name of economic stimulus to deliver a huge wealth transfer from the public to the private sector through regressive tax changes.”
Interim party leader Mike Milligan added, “This budget does nothing to put our economy on a more ecologically sustainability footing. Instead, it puts more discretionary money in the pockets of those who need it least and whose spending already creates the greatest ecological footprint. Meanwhile, it does nothing for people who barely have enough to make ends meet, and whose additional spending would increase personal and family security while having minimal ecological impact.”
He also criticized promised “incentives” to the energy hub in Saint John. “To underwrite with tax dollars the most ecologically damaging economic development strategy one could imagine is the height of folly. This oil-gas-nuclear hub is New Brunswick’s version of the tar sands. We should be investing in efforts to reduce our economic dependence on non-renewables, not increase it. Every dollar spent on ecologically destructive projects is a dollar not spent on moving towards real sustainability.”
The Green Party begins a series of policy forums this Saturday in Fredericton to develop policies for a sustainable, socially just economy. These will be approved by the members at a future policy convention.