14 January 2013

Putting selective “facts” on the splitting table #nlpoli

Premier Kathy Dunderdale wants to have a  “conversation” about the provincial government’s financial mess and the ways we might fix it. That’s what she told CBC’s David Cochrane in her year-end interview. 

One of the things Kathy wants to talk about is taxes, specifically the number of people not paying the bulk of the taxes the provincial government collects.

Kathy doesn’t really want to have a conversation, of course.  Kathy likes jargon.  She uses jargon a lot.  She thinks it makes her sound smart.  It never has.  Kathy uses jargon so much that It just makes her sound like someone trying to sound smart.

“Conversation” in this case was just a talking point designed to make it seem like she isn’t just going to carry on and do whatever the heck she wants anyway, just like she and her colleagues have done to get us into the mess in the first place. 

She had a bunch of other talking points in that interview, some contradicting others, as SRBP noted at the end of last year. But let’s just stick with the taxes one.

This is not the first time that Kathy has mentioned these people in the province who aren’t paying lots of income tax.  In October, here’s what she told the crowd of provincial Conservatives in Gander for the annual party convention:

Startling fact for you now: We are all so dependent on oil and revenue from our offshore and our mining and our fishery so on to keep this place going. Nineteen per cent of the people in this province pay 70 per cent of the taxes. Think about that now. Nineteen per cent of the population pay 70 per cent of the taxes. And that’s a really good thing. We’re really proud of that as a government, that we’ve relieved that burden on people,…

A source of pride. 

A good thing. 

A couple of months later and maybe it isn’t so good after all.

Lana Payne is the head of the province’s labour federation.  She doesn’t like the talk about people and taxes.  In her latest column in the Telegram, Payne takes issue with Dunderdale’s comments:

“Of those 400,000 or so people in our province who file [income] taxes, 25 per cent of them or 100,000 had taxable incomes of under $10,000 a year, 60 per cent or about 240,000 people had taxable incomes of under $30,000.

Low incomes mean, and should mean, you pay lower personal income taxes.”

In fact, about two thirds of the people who paid income taxes in the province in 2010 made less than $35,000 in gross annual income, according to Statistics Canada.

They are not all old and retired and on fixed incomes as Payne suggested in her column.  Some other Statistics Canada information gives a much clearer picture. 

There were 157, 950 families in Newfoundland and Labrador in 2010.  The median total income for families was $62, 580 while the median income for individuals was $26, 970.  That’s before taxes.

142,280 of those families – 90% – received some form of government transfer:  employment insurance, old age security, child tax benefits, and the like.  66,080 had someone in the family collecting unemployment insurance.  That’s 46% of the families getting some government transfer and 42% of all families, as measured by Statistics Canada.

Payne spends a lot of her column talking about the great things supposedly happening in the province.  Payne’s conclusion is pretty simple:

One thing is certain — a government pushing austerity during times of unprecedented prosperity can, and should, expect resistance.

“Unprecedented prosperity.”

Many of the details Payne recites are ones Dunderdale also talks about:  capital spending.  And her conclusion about it is one that most Tories are probably thinking about in the back of their minds:

If these investments in energy, schools, hospitals, roads and other infrastructure projects are good and responsible investments, perhaps the government should stop complaining and panicking about the short-term deficits these investments create.

After all, the government did double its planned capital spending in 2012 — at a time when it knew there would be lower oil production.

Both Dunderdale’s and Payne’s comments are missing the crucial information right there in those family income statistics. 

We are not in a period of “unprecedented prosperity”.  We live in a province where about 40% of families  depend on employment insurance for part of the family income.  If you wanted to root through all those income details you’d find  just how many of those families and individuals need employment insurance to get through the year.  You will find just how unevenly the current boom is spread across the population.

Take a look at the things that both Payne and Dunderdale crow about and you understand that a sizeable chunk of the current “prosperity” comes from public spending.  We are not talking about just essential services and the number of public employees needed to deliver those services. 


As regular readers know, it’s way beyond any reasonable definition of “essential”, that we’ve needed to do something for years now, and that this is not a temporary deficit situation, as Payne claims.

Dunderdale and her colleagues spend whatever public money they can in order to win votes.  Payne and her colleagues are grateful for the jobs, the new members, and the union dues that go with them.

Payne’s last line  - expect resistance – is nothing more than the  political threat the rest of the column supports. Payne’s entire column is nothing more than the selective presentation of information to bolster the threat that labour unions in the province will fight viciously any cuts to public spending. For Payne and her colleagues,  the tap on the public trough turns only one way and that was Payne’s only message.

And when Payne talks about Muskrat Falls, she is just torquing that one as part of the political fight to come:

How many ways will Newfoundlanders and Labradorians be expected to pay for the development of Muskrat Falls?

Is the government now asking us to pay for this hydro project with higher taxes and fewer services?

Dunderdale and Payne have both supported this project since 2010 and both still do. Both knew then, as both know now, that the only people paying for it are the local ratepayers. Those are the same people on the low incomes both Payne and Dunderdale like to talk about but clearly don’t understand. If they did neither would be proposing to suck a total of $450 million out of their modest pockets every year for the next half a century and more in a new electricity tax called Muskrat Falls.

We need to have a very serious political discussion in this province.  We need to talk about public finance and the future of our province and its economy.  We need to lay all the facts on the table. As both Kathy Dunderdale and Lana Payne have made clear, we are not going to get any serious, factual discussion from either of them, at least not in the short term.