Friday, August 24, 2007

Flaherty Can't Add

People in Ontario are already aware of Jim Flaherty's problems with accounting. Having said that, the math gap with the federal budget is staggering:
The federal government is once again awash in cash thanks to a much stronger than expected economy.

The Finance Department says the budget surplus for fiscal 2007-08 will be much higher than projected.

In March, Finance Minister Jim Flaherty estimated the surplus would reach $3 billion.

However, the surplus had already reached $6.4 billion in the first three months of the fiscal year, from the beginning of April through the end of June.

In three months the surplus is more than double what Flaherty predicted for the entire year. I realize the economy is probably doing better than anticipated, but isn't it somewhat outrageous for the Minister of Finance to have a surplus potentially 8X the forecast? These aren't Paul Martin numbers, Flaherty is either incompetent or a complete fraud.

Let's not forget that the last budget was an election budget, and if Flaherty had concluded he could afford a big tax cut he would have done it. By the looks of things, Canadians could have a nice income tax cut, not to mention the contentious issue of income-splitting, which Flaherty nixed, on perceived fiscal grounds. Objectively, there is something amiss, when your budget predictions are shattered in the first three months, nevermind the fiscal year.


Bailey said...

What bugs me is how the Conservative Party and its predecessors used to complain about how the Liberals were purposely undervaluing the expected surplus for the year in order to go on a big spending spree. I guess things change when you are the ones in office. Personally, I think it is much better if you forecast conservatively than run overbudget.

Steve V said...

"I guess things change when you are the ones in office."

In many ways, that is true. What is different here, the magnitude of the error. Flaherty has usurped Martin as a "fudger".

Anonymous said...

The first 3 months does not predict what will happen for the year. The crux of the story is the "economic growth projection".

Get ready for a flush-and-plush pre-election budget. quickly, before bad things start to happen.

Anonymous said...

My, my and how the Conservatives attacked the Liberals for having surpluses when they were in opposition - now it's suddenly okay?

Mind you, I'm not sure I'd trust Flaherty on this - afterall, he lied to Ontario citizens about the debt.

Steve V said...

"Mind you, I'm not sure I'd trust Flaherty on this - afterall, he lied to Ontario citizens about the debt."

The hilarious part, all you hear now is how McGuinty broke his promise on taxes. Flaherty is a crook.