British Columbia

Gov't priorities tied to re-electio

Continued from page 1
A year earlier, the finance minister stood
efore the province and reported a financial
Crisis — an $800 million deficit in 1987/88

- and a projected deficit of $350 million for

88/89. Tough measures were necessary,
and they were ruthlessly imposed in the
form of new sales taxes and massive user fee
Icreases on the elderly and sick — while
Corporate taxes were lowered again.

At the time, NDP finance critic Dave
Stupich commented that the government
Was going out of its way to make the situa-
ton look as bad as possible.

The result was an increase last year of
$800 million for the provincial government
in taxation revenue, and a further increase
of $274 million in user fee revenues over the
Previous year. Of the $800 million more in
tax money the Socreds took, about 75 per
cent of it came directly out of the pockets of
Individuals. Virtually all of the user fee
creases were from individuals, mostly
through increased medical premiums.

It is significant that revenues from natu-
Tal resources, even with the new stumpage
fees on wood, remained frozen at the 1987
level.

The outcome of the government’s ruth-
less attack on its deficit was a $1 billion tax
Souge that overnight catapulted it into a
surplus situation. The BS fund was set up to
Camouflage the operation and the Socreds
sank the entire $1 billion into the fund. The
Province’s books at the same time show a
Phoney deficit of $375 million for last year.

Spending not
as it seems

Finance Minister Mel Couvelier
was literally crowing when he trum-

grams on housing and the environ-
ment. But a closer look shows that
neither is much to crow about.

__ Thereis no increase for social hous-
ing. The 1,800 new units in B.C.
announced by Couvelier are actually
less than the 1886 units that the fed-
eral government has already allocated
to B.C. for this year.

_ The major move the government
intends to make is to establish a
Crown corporation to sell or lease
Crown land to developers for rental
housing, and to provide interest write-
downs if the developer agrees to limit
rent levels. A fund is being set up with
$4 million earmarked for the develop-
ers. Developers who buy Crown land
will also be forgiven the property pur-
chase tax that other home or property
purchasers must pay.

The net effect of the program is
perhaps best estimated by the eco-
nomic forecasts attached to the
_ budget which predicts a 4.9 per cent
decrease in housing starts in B.C. in
1989 over 1988, and no improvement
on that in 1990.

The $200 million for the environ-
ment that Couvelier announced also
is far less than touted. The $200 mil-
lion is more fancy figuring of total
spending, including the Vancouver
Island natural gas pipeline, the entire
environment ministry budget, and
any program in any other ministry
remotely affecting the environment.

The environment ministry actually
has an increase of $30 million to pay
for a summer youth employment
program, some new enforcement
officers, and storage and monitoring
of toxic wastes. Most of this $30 mil-
lion in new spending comes out of
lottery funds.

peted the government’s new pro- }

The Socreds also took in another $300
million last year as the spoils of its privatiza-
tion program, and it sank that money into
another special fund called the “Privatiza-
tion Benefits Fund.”

Added to the first instalment in the BS
fund in last year’s budget, Couvelier made
up this year’s budget sitting on $1.7 billion,
stashed away in two exclusive political
reserve funds.

When the results of the two byelections in
March came in, it was the confirmation
needed that the government had to start
using its political reserve funds.

Couvelier decided to increase govern-
ment spending by 12.8 per cent or by $1.9
billion in 1989/90. Just less than half of that
will meet normal inflationary costs. There
are modest spending increases for education
and health, and politically calculated spend-
ing programs on housing and the environ-
ment. But the biggest spending increases
were for good old fashioned Socred “black
top politics” for highway and transporta-
tion projects, and for the regional budgets
of the so-called “ministers of state for the
regions”.

To finance the plan, Couvelier went back
to the BS fund and took out $500 million for
1989/90. The government also took the
unusual step of. taking $102 million from
B.C. Hydro’s profits earned last year from
the export of power to the U.S. The Socreds
also put on another hike in Medical Service
plan premiums effective April 1 that will
bring in another $37.5 million in 1989/90.

Last year’s tax gouge, in effect, “bal-
anced” this year’s budget. And it leaves the
government still sitting on a $1 billion plus
fund to do more of the same next year.

While Couvelier and the Socreds crow
about “balanced” budgets and their pet
spending projects, the 1989/90 budget has
almost nothing for the unemployed and the
poor, and the budget predicts almost no
improvement in the unemployment rate.

With $1.3 billion in the bank can B.C.’s
exorbitant medical service premiums and
other user fees be justified? Isn’t there
money for job creation and significant
increases in GAIN rates?

Could not the government have dealt
with the deficit that came out of the reces-
sion by maintaining its social service spend-
ing and encouraging demand in the
economy, instead of deep social service cuts
and taxes and user fees that diminished
spending power?

The billion-dollar BS fund poses all of
these questions and more. The balanced
budget is, indeed, BS and Mel Couvelier’s
cynical and desperate attempt to curry pub-
lic favour as the provider of popular pro-
grams is a truck load more of the same.

Finance Minister Mel Couvelier delivers his budget speech.

Social Credit spending priorities

Highways
46.9%
Environ-
ment
Overall
34% Energy Spending
Mines Increase
a Private
Petroleum All P
Public GAIN GAIN
12.8% Schools Health Programs Rates
18.6% “
Ga Bags 17%
Li P rrr a7
10.6% 9.9% | 8.4% Pooh
y Lo 5%

Poor are biggest losers
in Social Credit budget

Socred spending programs are increased
by $1.5 billion this budget year — but it
does not signal a break with the fiscal
restraint program that has been in place
since 1982.

Couvelier’s budget, on the contrary,
once again shows social services to be the
lowest of Socred priorities, having received
funding increases below the 12.8 per cent
increase in overall spending.

The highest spending priority is for
highways which has a whopping 46.9 per
cent increase in its budget, including two
major highway projects and a 50 per cent
increase in highway rehabilitation.

A bright spot here is contracts for two
big ferries and two smaller ferries in B.C.
shipyards.

There is also some needed relief for the
province’s universities which receive a 13.9
per cent increase in grants.

But B.C.’s public school system is once
again on the short end of the government’s
stick. The public school system has only a
10.6 per cent increase in funding, while the
government’s prejudice for the private
school system is shown once again with a
17.3 per cent increase in funding next year.

The health system fares even more
poorly with a 9.9 per cent increase in the
ministry’s budget and a smaller 9.3 per
cent increase for acute care hospitals.

Couvelier announced 700 new continu-

balanced against a 4.5 per cent inflation

ing care hospital beds, but did not indicate
whether they will be designated for public
hospitals or the private sector.

Medical Service Plan premiums were
increased again while funding for the Med-
ical Services Commission which pays hos-
pital bills and doctors’ fees was held to
only a six per cent increase. MSP premi-
ums next year will amount to $612 million,
which by comparison is roughly equal to
the $646 million expected from the fore-
stry resource.

Funding increases for universities,
schools and the health system need to be

rate.

The big losers once again in the provin-
cial budget are the province’s poor. Even
with the government’s much vaunted new
housing programs, the Ministry of Social
Services and Housing has a below average
11.4 per cent increase in funding. The big-
gest chunk of the new money goes to the
controversial Employment Plus Program
in which the Socreds will give low wage
employers half the cost of employing wel-
fare recipients.

Basic GAIN rates will rise by five per
cent in July, 1989, which means that most
GAIN recipients will continue to fall
behind rising shelter and food costs.

There were 134,835 persons on income
assistance in January, 1989.

Pacific Tribune, April 10, 1989 « 3

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