A budgeting lesson for Christy

         We have all heard the liberals state the importance of balancing the provincial budget. We have all heard that there is no room for spending in the current budget that is still not balanced, yet spending cuts cannot go on forever. So, I have created a little explanation for Christy on the basic elements of budget making taught in Planning 10 and that she can use to put the province on track to a financially prosperous future.

        There are two main elements to budgeting: income and expenditure. The income is defined by the amount of money that can be allocated in the budget and the expenditure is defined by the amount of money that is allocated in the budget or the amount of money spent. If the total expenditures exceed the total income the budget is not balanced. In such case, for the budget to be balanced at least one of two things must  happen: expenditures can be cut and income can be increased.

        Any government can be very good at cutting expenditures but few will increase their income. Here in BC we see that money is being cut from numerous services in an attempt to break even, but these services cannot take the cuts any longer. If the expenditures cannot be cut then income must be increased. Simple logic, yes? Apparently not to Christy. To increase income all the government need do is increase the corporate tax rate. Something they said they would do in their campaign if necessary. Well now it is.

        The issue, unfortunately, is not that simple. The issue is prioritization: something else that is vitally important in budget making.  High on the liberal's Priority list is to allocate the largest portion of the provincial income possible to corporations in the form of tax breaks. Thus it should come as no surprise that the province with the lowest corporate tax rate cannot afford to fund the education system to the national average. If the money not being taken from the corporations in the form of a tax break is re-allocated to the services the budget will not be any less balanced and the proper funding for the services will have been found. If the government were to demand that the corporations pay a tax rate compatible to that of the income they make this budget deficit would not be an issue.

There we go, Planning 10 level budgeting in a nutshell for Christy Clark and the Provincial Government.