If you think neo-liberalism is dead, consider what happened this week to Finance Minister Bill Morneau. Faced with a less robust economy than he anticipated, he'll have to consider new sources of revenue. He mused that those new sources might include the GST. Alan Freeman writes:
That appeared to be what Finance Minister Bill Morneau was doing earlier this week when he gave a convoluted response to a journalist that was interpreted as opening the possibility to a GST hike sometime in the future.
Within hours — probably after a panicked call from the Prime Minister’s Office — Morneau tweeted a climbdown of his own: “Contrary to misleading headlines, we are not considering changes to the GST.”
What Morneau made clear is that the Liberals are scared to death of being slammed as tax-grabbers by the Conservatives. While much of the Harper legacy is being scrapped — his obstinate refusal to take action on climate change, his surly, tough-guy foreign policy — the anti-tax mantra lives on.
Neo-liberals don't believe in deficits -- under any circumstances. And they don't believe in taxes. The Liberals have gone half way, by planning to run deficits. And they'll raise taxes on one percent of the population. But the notion that citizens should pay for the services they demand? That is a notion they can't stomach.
So Stephen Harper's legacy lives on:
The Harper Conservatives used anti-GST sentiment in the 2006 election to help get themselves elected and soon lowered the tax by two percentage points to 5 per cent. It was a populist brainwave that boosted Harper’s anti-tax street cred but left economists scratching their heads — and deprived Ottawa of an estimated $14 billion to $15 billion a year in revenue.
Lowering the GST never made economic sense. It's better to tax consumption than income. Apparently, the Liberals haven't learned that lesson either.
Neo-liberalism is alive and well.