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I Shaved My Head When Robert Stanfield Died

"...because Canadian politics is a baffling mystery that, when explained, still doesn't make sense, and has no bearing on anything." -Commenter on a Diefenbaker YTMND I made

Sunday, January 08, 2006

Admittedly somewhat less detailed than the big 5, but still, the bases: Covered.

So the PC platform comes out and there is little to cost, and little specific enough to cost.

I'm going to analyse now and if I got anything wrong don't hesitate to let me know

Plank the first: We promise NO TWO TIER Health Care, period.If they can move from the back of the line to the front of the line solely because they are more well off will the line ever get shorter? The other parties have given up. We haven’t. Health care can be fixed.

Good. Recognises we'll get all the healthcare that we're willing to pay for.

Cost: Possibly more than the historical levels of health spending increase, which means 4% + inflation + population growth every year. So about 9% increases in nominal terms year to year on behalf of the feds. That would be less than $1.8Billion per year, so let's estimate conservatively and say this will cost $10B over five years.

Keep in mind, however, that given the current Alberta pilot program that just wrapped up produces appreciable increases in efficiency and is expected to be revenue neutral. If health technology can begin to focus on making health care less expensive instead of more heroic, now that life expectancy is 79 years and the greatest drawback of western medicine is the cost.

Plank the second: Progressive Canadians would keep commitments on Kyoto, and lead the way in environmental action. We believe that a country with clean air and water will be a place to invest. We believe that industries which serve the needs and desires of the world for environmentally responsible products and services will be able to compete for the best jobs and for economic prosperity in the new global economy.

I like it. I for one believe that Kyoto is good for the economy, because it means incentives to revitalise our infrastructure. Come the '80s, the Soviet economy was a high polution economy, whose industrial infrastuctue had become inefficient and out moded.

Cost: Nobody really knows!? There is no consensus on Kyoto costs. Could this be a long run money maker or an economy killer? Rest assured, however, that to meet Kyoto, and the next round, conventional energy prices will go up. This isn't an inherently bad thing. In fact we may see that offset by plank the fifth.

Plank the Third: The Real Alternative to Eliminating Student Debt
We will strive to keep our best and brightest in Canada to pursue their professional careers.
We will pave the way for our “Commitment to Canada” student financing plan which, in time, would see those who choose to do so be financed for their educations in return for a promise to commit to pursuing their careers in Canada for a set period of time.

Brilliant! Fights the supposed brain drain or improves the brain gain (take your pick) with a hard comittment from students AND has something of a 'try it, you'll like it' approach. Post secondary degrees as a percentage of the population is a key determinant of unemployment by region, so I'm going out on a limb here and saying that this will keep job creation strong, increase taxation revenue, and reduce EI and welfare costs.

Cost: I'm going to go worst case here again: Let's assume that there's no increase in incomes as a result. I recall the Alberta NDP saying that you could lower tutions 30% for 240mil a year. So $80Million a year would lower tutions by 10% in 10% of the country...

$40 Billion over five years

Plank the Fourth: It’s easy to make promises to get elected. We will keep the promise of .7 percent. We will find the money without tax increases. We are for the children, the mothers and fathers and the people in the world who are so desperately in need of our help.
We will find the funds for our peacekeepers for equipment and decent pay.

Good, but vague. There's no acceptable level of funding indicated here on the military side. Shall I go out on a limb and say a matching of the Alberta wage increase of 7.5% on the approx. $10B defence budget would be in order? Maybe, but now I'm just pulling costing out of my arse. Re: Foreign aid:
Given foreign aid of about $2B/year on a GDP of slightly more than $1T/year that makes an increase of $5B/year

Foreign Aid: $25Billion/five years
Military: $3.75Billion/five years

Plank the Fifth: Prosperity Canada is our program to support entrepreneurship, small businesses and 21st century industries in Canada. It’s time that we had an overall strategy for developing the type of economy that will bring us prosperity in the coming century.

This includes incentives to invest by strengthening the dollar, imporving our terms of trade and providing incentive to import instead of export and to focus on domestic markets.

I would normally have said that an increasein the value of the dollar to pre-FTA levels, which, at the time of introduction of the PC prosperity plan, would amount to a 10% increase in the value of the Canadian dollar or 1000 basis point years increase in our bank rate over existing levels, which would amount to a 10% increase in interest to be paid on the debt and a 10% increase in returns on the CPP reserve fund over the same time currently the diffence between the national debt and the CPP reserve fund is roughly $400 billion, however more of that debt, and if memory serves this has been noted by Hon. Mr. Stevens, can be taken up by the bank of Canada so long as the amount is not too expansionary in terms of monetary policy. This is one of the examples of having abandoned John Crowism (a pursuit of zero inflation) at the central bank.

Cost: $40 billion.

Plank the Sixth: Would you really mortgage your children’s future for a tax cut today? Canada has a mortgage to pay, nearly $500 billion. As long as nearly ¼ of your taxes pay just the servicing of the debt, tax cuts are deferred taxes passed onto your children. Let’s pay off our mortgage and then give real tax reductions, not just election gimmicks.

Finally, someone remebers that we still owe more than a half a trillion dollars in federal interest bearing debt. At the current prime rate of 5% that works out to over $25B/year in interest.

Cost: Assuming an average foregone tax cut of $10B/year, and I'm being pessimistic here, the Candian government would save $0.5B in the first year increasing to $2.5B in year five. so over the first five years savings would equal $7.5B, but factoring in the 1000 basis point year intrest increase those savings increase by 40% or to $10.5B a fine illustration of what happens in the event of a high interest rate economy, which is a distinct possibility (remember the 80's anyone?)

Therefore, total cost, derived by me spitballing for the past half hour of the PC platform: $108.25Billion over five years. But again that's the first five years viewed in isolation, which is still fairly short-term thinking in political terms.

So until whenever: Meh.

1 Comments:

At 11 January, 2006, Anonymous Anonymous said...

Great blog I hope we can work to build a better health care system as we are in a major crisis and health insurance is a major aspect to many.

 

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