Sunday, January 17, 2010

Flaherty claims he will balance budget without spending cuts or tax increases

Flaherty's predictions do not seem at all in line with those of Kevin Page the parliamentary budget watchdog. Flaherty seems to have an exceedingly optimistic view of economic growth and how that could improve the budget; alternatively, he may have an ostrich approach burying his head in the sand and ignoring upcoming continuing deficits. Perhaps he is anxious to avoid setting out a budget later that has spending cuts and tax increases as that might galvanise even Ignatieff to vote against the Conservative budget.

Flaherty stands by claim to balance budget
CBC News
Finance Minister Jim Flaherty is standing by his assertion that he can deal with the deficit without spending cuts or tax increases.

He made his comments during a news conference Friday after speaking at a business conference in Toronto on the Canadian economy.

Parliamentary budget watchdog Kevin Page predicted Wednesday that the deficit will still be $18.9 billion by late 2013 — more than $8 billion higher than Flaherty's own forecast.

Flaherty said he's confident that with reasonable economic growth government tax revenues will rise along with economic activity "and, if necessary, restrain the rate of growth of government program spending, that we can get to a balanced budget in the medium term."

"The IMF and others think we will have reasonable growth, the best economic growth in the G7, in the next several years," he said.

'I don't get to speculate. I get to deal with budget-making'
—Finance Minister Jim Flaherty"I see speculation," he told journalists. "I don't see a lot of evidence. I see editorial comment without numbers, without analysis. I don't get to speculate. I get to deal with budget-making."

The minister said he has been told repeatedly in his recent pre-budget consultations with business owners and managers that tax reductions have been good for them and as a result he is unwilling to introduce tax increases.

The government will release its budget on March 4.

In response to a journalist's question, Flaherty said he has no intention of following the American example of imposing taxes on executive bonuses in the financial sector, because there has been no government bailout of banks in Canada