The economic plan

Posted October 24, 2008 by Sacha Peter - Link
Category: Economy Comments Off

As soon as I heard the Premier say “10 point plan“, I was wondering which point the NDP would cherry pick to attack.

I was thinking the NDP would attack #4 – the 50% rebate on the school component of select industrial property taxes (being relatively beneficial to select corporations), but the winner turns out to be #8 – the 1/3rd rate reduction on BC Ferries in December and January – the argument being that of supposed non-interference by the government.

The point is valid – the whole point of converting BC Ferries into a separate (albeit 100% owned by the government) corporation is to avoid exactly the political interference that went behind the announcement.

It’s a populist move designed to shore up the support of those that depend on the ferry system, but one would wonder where the positive electoral impact for the BC Liberals would be – the coastal regions of BC are dominated by the NDP except for the Saanich/Comox regions – perhaps trying to shore up support in these areas? The government will probably take more damage via credibility attacks than helped via happy ferry riders, especially after the January price decrease is reversed – people are going to get used to the low prices and will wonder what happened after they rose again in Februrary. Presumably the NDP will be fishing for comments made after the structuring of BC Ferries in 2003 for their 2009 election advertisements.

The other measures, especially the taxation ones (#3, #5), are reasonable (although in the case of the proposed defined pension plan, one would wonder how this would mitigate against adverse economic times). The tax decreases muddies the water with respect to how the revenues from the carbon tax will be allocated to tax reduction (i.e. the “revenue neutral” part) – do these accelerated tax decreases go into the category of revenues from carbon tax, or are these stand-alone tax cuts?

The Legislature recall date of November 20 was quite odd – it is a Thursday. This will allow for exactly 5 days of debate on the proposed bill that will enact certain elements of the plan.

The government is clearly in a “need to be seen to take action, although don’t want to take too much action so we don’t blow our election platform” mode, and the NDP is playing the same way – it’s likely that they’re holding their cards close to their chests because they don’t want their ideas poached for the upcoming spring election session.

This election race is getting interesting – the economy is going south just at the worst moment for the government, although it will be very interesting to see how the public assigns blame in the voting booth in just over 6 months. Perhaps a single data point will be the upcoming by-elections?