Aside from shifting taxation from the business sector to the middle class (like in the HST), the neo-liberal agenda seeks to reduce the overall size of government, particularly in relation to GDP. A classic example of this reduction in government can be found right here in BC. Below is a chart from the BC government’s 2010 budget document called the “2010 Financial and Economic Review”. [Please double-click on the chart to see the full scale view. The yellow highlighting indicates the NDP years in between the Socreds and the Liberals.]
We can see that, in the second-to-last column, spending has gone down significantly – relative to our overall capacity to pay. The poor economy and the Olympics have changed that recently, but the overall policy trend of the BC Liberals is clear. It may not seem significant, but each percentage point of GDP translates into hundreds of millions of dollars, dollars which disproportionally affect the population in the bottom half of the income scale because a much greater percentage of its income relies on government transfers and services. The CCPA, for example, has calculated that the Liberals’ decade-long policy of tax cuts – largely benefiting corporations – has reduced revenues in the billions:
Between 2000 and 2010, BC’s tax revenues fell by 1.7% of GDP (the size of the province’s economy). That may sound like a small change, but it’s equivalent to $3.4 billion. Meaning, if we’d kept our tax system the same, we’d have $3.4 billion more to spend on needed public services today
This kind of economic perspective also explains why the government can claim it is spending more on services like education and health – in absolute terms and relative to previous years – but then show why the growth of our economy has exceeded our government’s provision of services. And it further explains why claims that health care care spending is “out of control” is a myth. Spending is going up, for sure, but it’s not out of control – except when tax cuts dramatically reduce a government’s revenue and, relative to that shrinking pie, health takes a much bigger proportion. But, if that’s the case, the discussion should not be about health care but our government’s determination to return us to the 19th century, and to take us back to a social Darwinist, I’m-all-right-Jack society.
Edited on: Sunday, November 14, 2010 9:11 PM