MCC President Graham Starmer speaks to media about Budget 2010
“The Balanced Budget got a body blow” said MCC President Graham Starmer as he came out of the Budget announcements.
Having passed new Balanced Budget legislation last year the government is now tinkering with it again, essentially freezing the requirement to balance for five years.
In fact, even the balanced Budget of 2009/10 was only achieved by using an escape clause that lets the government deduct money spent on emergencies (in this case about $100M regarding H1N1).
“The government said in 2009/10 it had $150M in unexpected expenditures such as flooding and H1N1, a $90M drop in revenue, and an increase in spending of $420M beyond that originally projected in the Budget” added Starmer. “That math tells me the real problem is a predilection to spend.”
The MCC was quite vocal in its criticism of the new (soon to be former) Balanced Budget Legislation and its four-year rolling average. Click here for a summary and here for the MCC’s original submission.
Here is a look at the government’s five year fiscal plan:
(in millions)
| 2009/10
Forecast |
2010/11
Budget |
2011/12
Projection |
2012/13
Projection |
2013/14
Projection |
2014/15
Projection |
|
| REVENUE | ||||||
| Core Government | 10,042 | 10,218 | 10,514 | 10,736 | 11,151 | 11,708 |
| Other Reporting Entities* | 2,460 | 2,502 | 2,605 | 2,675 | 2,746 | 2,743 |
| TOTAL REVENUE | 12,502 | 12,720 | 13,119 | 13,411 | 13,897 | 14,451 |
| EXPENDITURE | ||||||
| Core Government programs & services | 10,644 | 10.755 | 11,037 | 11,156 | 11,372 | 11,598 |
| Other Reporting Entities* | 2,413 | 2,510 | 2,530 | 2,600 | 2,671 | 2,688 |
| TOTAL EXPENDITURE | 13,057 | 13,265 | 13,567 | 13,756 | 14,043 | 14,266 |
| SUMMARY NET INCOME (LOSS) | (555) | (545) | (448) | (345) | (146) | 185 |
Tax Relief:
There was some good news for the businesses community, about $6M in tax relief including:
- Extending the Research and Development Tax Credit to in-house R&D
- Broadening the co-op Education and Apprenticeship Tax Credits and
- A co-operative Development Tax Credit.
Click here for details on all tax relief.
As well, the Capital Tax and Small Business Tax will be eliminated as planned.
The big disappointment is a further reduction in the Corporate Tax to 11% is postponed indefinitely and the Payroll Tax continues to collect more money from Manitoba businesses as try to hire more people and/or pay them more.
Revenue from the profit insensitive Payroll Tax will rise from $358.6M to $378M this year.
