Need for accuracy demands response to Opposition's tax paper comments
GUEST COLUMN — I read with a mixture of interest and disbelief the piece written by Opposition leader Jeannot Volpé in your newspaper and other newspapers in the province recently.
Since I firmly believe New Brunswickers deserve accurate information when it comes to the Discussion Paper on New Brunswick's Tax System, I feel it is very important to set the record straight and correct a number of misleading points Mr. Volpé put forward.
Ironically, the two primary objectives behind the Discussion Paper on New Brunswick's Tax System are precisely the goals the Opposition leader complains about.
First the paper is geared towards making sure New Brunswickers get to keep more of their hard-earned money to spend, save and invest as they choose; and secondly, the proposals aim to make the province more attractive to business investment so we are more competitive globally. This will create jobs and a brighter future for our entire province.
When Mr. Volpé talks about tax relief and job creation, it makes me wonder if he looked at the paper at all. It's the foundation on which the paper is based. As a matter of fact, the options outlined in the paper would provide the greatest personal income tax relief in the history of the province.
Perhaps the comments made by the interim leader of the Progressive Conservative party that really made me do a double-take were questions he raised regarding help for families.
The discussion paper outlines a new non-refundable child tax credit of up to $400 per child under 18 and a universal child care benefit of $600 annually for every child in the province under six. There are approximately 45,000 children under six, so that measure alone would provide $27 million to families in our province. This is significant help for families of all income levels.
He also speaks about middle income earners. Let's review the facts. One of the personal income tax options would see a single-earner family with two children with annual earnings of $40,000 have $1,801 more in its pockets to spend than it does today. Why Mr. Volpé believes that is insignificant is beyond me.
As a matter of fact, if we were to put aside the carbon tax and just focus on the two points of HST — the sample family above would have to spend $90,000 in one year on HST-taxable goods and services to offset the $1,801 benefit.
On the topic of small business, Mr. Volpé fails to mention that personal income tax reductions will significantly reduce taxes for the owners of small businesses He also neglects to mention New Brunswick currently has a competitive small business corporate tax rate, and reducing the gap between the general corporate tax rate and small business rate will help encourage business growth and expansion.
He makes wild comments about the two points of HST without putting the issue in perspective — the two points proposed would bring the tax to what it was two years ago and means three cents on a $1.50 cup of coffee, $10 on a $500 television and $400 on a $20,000 car.
As I have mentioned before in these pages, the simple fact around the tax discussion paper is that the options would see an additional $500 million put into the pockets of New Brunswickers compared to today, while the tax revenues would amount to approximately $350 million.
The difference between those two numbers would be made up through economic growth resulting from changes that would make New Brunswick more attractive for business. This would create a new influx of jobs, and the tax revenue that flow from them. In addition, government would go to greater lengths to control its own spending.
What Mr. Volpe fails to put forward are his ideas on where the revenue would come from to government if personal income tax and corporate tax breaks go ahead. So the question to him is: what hospitals would he close? Which schools would he close? Which roads would he decide would not be fixed or paved?
The options in the tax paper are about making New Brunswick a leader. We have a chance to put our province on a path of growth it has never experienced before and on a fast-track towards self sufficiency. This is the goal of the Shawn Graham government.
When you see Mr. Volpé complain about the taxation policies as they relate to apartments or rural areas, you can't help but ask, "Why didn't you do something about it when you were in power for seven years?"
The answer, like so many other public policy issues, is that the former government did nothing about these issues because it was paralyzed by indecision.
Our government looks forward to the report of the all-party tax review committee and, more importantly, I want to thank the dozens upon dozen of individuals, groups and community leaders who took time out of their busy schedules to make presentations to the committee in recent weeks. There were approximately 100 presentations made to the committee and I understand the committee has received nearly 200 e-mails and other correspondence. That is impressive. It's good to see so much interest, and input, surrounding the discussion paper.
The debate on the tax discussion paper was healthy and productive, and except for those who have made selective comments for political gain — as we have seen recently from Mr. Volpé — the discussion has been mostly based on facts.
Our government looks forward to the committee's report, and, more importantly, on taking action to put more money into New Brunswickers' pockets and creating a better business climate that will create new jobs and wealth for the entire province.
Victor Boudreau is the New Brunswick Liberal Minister of Finance
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