Moves made to reduce inequality

FAR be it from me to attribute any significance to the coincidence of Finance Minister Greg Selinger’s first budget and the start of a new millennium. In any case, I would never describe what he delivered yesterday as a “millennium budget.” Anyone looking for profound shifts in Manitoba’s economy will be disappointed by Selinger’s modest, moderate budget.

Still, this was the best budget Manitoba has seen in more than a decade, and a good budget for this time. It takes us a few tentative steps towards the kind of social investment needed to build a strong future for Manitoba. And, slowly, slowly, it moves to reduce inequality.

The budget contains a number of imaginative and valuable spending initiatives, including an aboriginal community economic development fund, money for housing renewal, and new money for child care. On the symbolic level, therefore, it contains much to feel good about.

However, in some ways Selinger has taken two or three steps forward and one step back. Across-the-board income tax cuts, while not huge, have come at the cost of stronger funding for creative and deserving new programs.

The government obviously heard the privileged minority’s calls for huge cuts to personal income taxes, and it should be given credit for putting up more resistance than most other provincial governments. There are income tax cuts in this budget, but on the whole they are fairer than such cuts usually are. The property tax rebate that was promised during the fall election, a good measure, was delivered, and there is targeted help for families and people with disabilities.

In order to understand the significance of the new government’s first budget, we need to look at where we’ve come from.

Over its decade in power, the Gary Filmon government implemented an economic strategy that shifted our economy in a more market-oriented, corporate-driven direction. Wages were kept low, with the goal being to lure businesses to Manitoba using a huge pool of low-wage workers and low rates of the most visible taxes on business.

This strategy was effective at reducing unemployment levels, but left the province overly reliant on exports and therefore vulnerable to swings in the national exchange rate. By the end of its mandate, the Filmon government had achieved a balanced budget, thanks in large part to massive spending cuts and regular draws on the fiscal stabilization fund.

The costs of the Filmon government’s policies were very high, especially for the most vulnerable. Poverty, for example, rose to epidemic levels. Tens of millions of dollars were cut from public services such as health.

These areas — help for those who need it most, restoring funding to programs that were slashed, and a strong focus on building Manitoba’s economy from within — were opportunities for Selinger to set himself apart. And he is moving in the right direction.

The budget includes significant and much-needed investment in education and training, major new support for community colleges and enough money for universities to give students a 10 per cent tuition reduction and give universities a modest funding increase. These are important investments in the future of Manitoba.

Still, the budget contains not nearly enough for the poorest of the poor. It makes only the most limited adjustments to the clawback of the National Child Benefit, by promising to stop clawing back future increases in this federal program. It also promises an extra $20 per month per child on welfare for children under six. These small innovations suggest a path toward a better province, but for now, little more than that.

So, what we got was moderate income tax cuts, moderate spending increases, and a good deal of reason for hope.

The best interpretation of this budget’s “a little of this, a little of that” approach is that it is balanced. For the first budget from a young government, that is fair enough. The worst interpretation is that this government does not know where it wants to go or what it wants to do, other than stay in power. Sooner or later, the Gary Doer government will have to stop trying to please everyone, and make its mark. There is enough reason for optimism in this budget. For a clear picture of what the Doer government’s real legacy will be, however, we’ll have to wait and see.