Budget's done. Now what?

Last week’s budget was pretty much as advertised, with the lion’s share going to pay down the debt, the purchase of a new ice-breaker, but with a revealing program to increase personal savings.

The latter would give each of us the opportunity to place up to $5,000 a year in an investment/savings account, where we would be shielded from tax on the interest and capital gains that would accrue. And though perhaps not a large chunk of this year’s federal budget, once ensconced in law, such a measure is easily expanded yearly.

The Conservatives’ “common sense” idea of governing relies, as we know, on the (Aristotelian) metaphor that the state is the family writ large. So, for example, we find the claim that in tough times one should pay off the debt, that paying debts should always take priority over spending. Similarly, in family budgets, if one can put a little away for unexpected challenges down the road, one always should.

Voila, the new savings account! However, to see its full force is to see beyond one’s own tax return. Indeed, it would be a good exercise of our citizenship to work through a number of returns, first imagining one’s self as well-to-do then as poor.

What would, in such an experiment, be the revealed purpose of the savings account tax shield? It wouldn’t take very long to see that a $5,000 tax shield is a lot more valuable to the wealthy, some of whom pay nearly 50 per cent on their marginal income, than it is for the middle income earner or the working poor. Not to mention how hard it is for many families to make ends meet now. Maybe the rich did indeed need a tax break, but let’s just call it that.

Otherwise, the budget didn’t do all that much in any direction and by placing more toward the debt, it leaves the country with more debt room to spend if things get really rough in the next 18 months.

The Opposition acts predictably

The Opposition Parties appear to have decided to play out their anticipated roles in response to the moderate budgetary direction set by the Government.

The Bloc loved the budget, which is why they’re voting against it. It spends very little in Quebec to help the industrial sector, so they now have the support-rebuilding issue that they need; that again Canada has left Quebec short.

The NDP love it too, which is why they too will vote against it, claiming that the Government has let down working families in Canada in order to serve the rich a bit more Dom Perignon.

And the Greens are wild about the budget as it steadfastly ignores the sensible idea of the British Columbia government to introduce a tax cut and carbon tax as a way of strongly encouraging a smaller environmental footprint, giving them and their fellow travelers in the Liberal Party something to take to the people.

Only the Liberals seem confused. They’re pretty sure that they don’t like the budget, but will let it pass. As I argued last week, this is good strategy, even if it is a bit awkward, making, as the NDP used to say, Tweedle Dee look a lot like Tweedle Dum.

The real story?

Of course, the budget has more going for it, and against it, than I have captured here. Beyond these strengths and weaknesses, there are some interesting ancillary points that may be worth noting.

First, the Liberals’ willingness to let the budget pass — while also reclaiming responsibility for the Afghan mission and letting the crime bill through the Senate without further reform — reveals a move toward the centre right from the terrain they were seeking to claim from the NDP.

Second, it shows that the massive lead in fundraising by the Conservatives does worry the Liberals, who have not yet made the shift to raising money by the handfuls, and not the wheelbarrows full.

Third, it reveals an important moment in the life of the new Conservative party, whether to continue to move to the centre to meet the Liberals or to serve the ideological ambitions of some of their strongest supporters. They’ve now used up their playbook and will need to write a new one. It should be interesting.