Maybe it’s a clever political manoeuvre. In a recent newsletter sent to all households in B.C., the provincial Liberals suggest how they would reform government using Ireland and New Zealand as models — countries who have shown “how we can save tax dollars by making the delivery of government services more efficient and effective.”
The idea of reducing taxes through efficient government strikes special resonance in B.C., but that alone was not the key to the phenomenal economic growth in Ireland. One key decision was to make all education free — no tuition fees for colleges and universities. B.C. already has frozen tuition fees, and has one of the lowest costs for education in Canada, but it’s not free. Do the Liberals propose to lower tuition fees further, or even make education free?
Another part of Ireland’s success is the tripartite agreement reached between government, business and labour. The resulting labour peace and coordinated industrial strategy focusses the Irish towards a common goal. A government that is openly hostile to labour, as in Ontario, is a recipe for reduced productivity. Will the Liberals establish a good relationship with unions, as well as business?
Irish artists pay no tax. The spin-off generated by recording groups, for example, has increased economic activity in the recording industry. Nelson Riis, MP, has proposed a private member’s bill that make income generated by artists, up to $30,000, tax free. The bill has received all party support in Canada’s parliament.
Ireland’s government is now considering a “basic income” scheme in which all citizens receive an annual income, regardless of whether they are working or not. An guaranteed universal annual income could eliminate welfare payments and provide relief for many workers (usually women) who leave well paying jobs to care for children or elderly parents.
If the Liberals plan to implement some the Irish solutions, it could be a clever political manoeuvre to steal the thunder of the NDP. It has worked for the federal Liberals. They silenced right-wing critics by implementing the policies of the Reform party. Canadians watched numbly as the feds implemented drastic cuts to health, education and welfare. If Reform had done the same, there would have been a revolt in the land. One way to silence political opposition is institute their policies.
Tax saving can have a disastrous effect when it is an ingredient in a different political recipe. Just look at what happened in New Zealand. They swallowed the right-wing concoction whole. Taxes were cut to the rich on the pretense of creating jobs. Spending to education and social services were cut, as well as subsidies to farmers . Public utilities were sold off.
The result was an increase in unemployment and despair in the countries youth. Teen prostitution increased 800 per cent and 11,000 citizens left the country last year. Urban crime has become a major problem. Capital took flight as the rich took their tax cuts and invested their wealth in safer economies elsewhere. Power outages occur in the private utilities that were unheard of in the public utility.
New Zealanders tossed out the right-wing radical government last December but repair to the damage caused will be a long time coming, and they will probably never get their utilities back. The new prime minister, Helen Clark, has some advice to others who want to try the New Zealand experiment, “Don’t try it. It won’t work.”
Tax reductions may be useful as part of an overall strategy of government. But tax reductions alone, while popular, only benefit the rich. And the Irish solution involved cooperation — businesses limited profits in return for a 10 per cent reduction in corporate taxes. This makes taxes only slightly less than Canada’s. Personal taxes are approximately the same.
Do the Liberals plan to make government more efficient by reducing union jobs and weakening the labour code? If they plan is to go to war with union workers, as Alberta and Ontario have done, the result will be disastrous. The road to prosperity in B.C. isn’t paved with reduced wages and labour unrest.