Still Spending: Government squanders higher revenue instead of bringing down debt, taxes
Toronto: The Canadian Taxpayers Federation (CTF) today responded to the 2005-06 Ontario Economic Outlook and Fiscal Review, presented by Finance Minister Dwight Duncan in the Legislature at Queen's Park. According to CTF Ontario director Tasha Kheiriddin, "The government just can't stop spending. Instead of using higher revenues to balance the books faster, or reduce taxes, the government is increasing spending by 55% of every 'new' tax dollar it takes in."
The following table shows revenue and spending and compares the May 11 budget projections with today's projections.
Revenue projections increased by $445 million dollars from the May 11 budget. At the same time, the government is increasing program spending by $243 million. On the government's books, however, this expense is offset by a projected decrease in debt interest payments of $225 million.
"While it looks like expenses are only up by $18 million, the reality is otherwise. The government is relying on lower interest costs to hide its program spending spree," said Kheiriddin. "This is both misleading and irresponsible. What if interest rates go up "
According to the Economic Outlook, debt servicing currently consumes $9.6 billion annually, or 11 cents for every dollar Ontario taxpayers remit to the government.
"Had it applied additional revenues to balancing the books, this year's deficit would ring in at $1.13 billion instead of $1.37 billion - saving taxpayers a potential $16.2 million in interest payments," said Kheiriddin. "Alternatively, the government could have reduced the Health Tax by 10%. It had choices - and it chose instead to spend, spend, spend."
The following table shows revenue and spending and compares the May 11 budget projections with today's projections.
Revenue projections increased by $445 million dollars from the May 11 budget. At the same time, the government is increasing program spending by $243 million. On the government's books, however, this expense is offset by a projected decrease in debt interest payments of $225 million.
"While it looks like expenses are only up by $18 million, the reality is otherwise. The government is relying on lower interest costs to hide its program spending spree," said Kheiriddin. "This is both misleading and irresponsible. What if interest rates go up "
According to the Economic Outlook, debt servicing currently consumes $9.6 billion annually, or 11 cents for every dollar Ontario taxpayers remit to the government.
"Had it applied additional revenues to balancing the books, this year's deficit would ring in at $1.13 billion instead of $1.37 billion - saving taxpayers a potential $16.2 million in interest payments," said Kheiriddin. "Alternatively, the government could have reduced the Health Tax by 10%. It had choices - and it chose instead to spend, spend, spend."