The Manitoba Government has attempted to give their PST hike a second chance for a first impression in their 2013 throne speech. The hike and its rollout will likely go down on as one of the biggest communications blunders the NDP government has ever committed and it cost Stan Struthers his job as Finance Minister.
In the wake of widespread anger over the tax increase, the initial strategy to sell it saw government ministers spreading throughout the province to announce funding for schools, hospitals and splash pads with the idea that all were courtesy of the extra PST revenue. This plan was in clear contradiction of the idea of using the extra cash specifically for “core infrastructure,” something many believed, and some still do, would be palatable to voters. That strategy has seemingly been thrown out along with Stan Struthers.
In the throne speech given on November 13, the Selinger government narrowed its focus. The projected $280 million the PST increase should generate will now be spent on “core infrastructure” such as highways, bridges, and flood protection. In other words no more splash pads. Those will just be paid for by the other 7% of the PST, I guess. The move is a clear about-face from the original sales plan and another acknowledgement that the government may have fatally wounded itself with its 2013 budget.
The new core infrastructure commitment will not stop the criticism any time soon. While it does narrow the scope of spending it’s still not entirely clear what exactly it means. There is no “Department of Core Infrastructure” with a designated budget. Also add in the fact that many of these projects also receive funding from other levels of government. It is almost impossible to ensure that every penny of the money will actually be spent in the appropriate areas. As the opposition Tories are quick to point out, government infrastructure spending seldom actually lives up to what has been promised. As a PC news release states: “Budget 2012 promises an overall infrastructure spending commitment of $1.719 billion in roads, schools, hospitals, sewers, waterworks and other infrastructure. Only $1.236 billion was actually spent because of the cancelled projects. That $1.236 billion spent on infrastructure in 2012 is $92 million less than what the NDP spent on infrastructure in 2011.” This definition of infrastructure includes schools and hospitals, “core infrastructure” as highlighted in the Throne Speech doesn’t seem to, another example of how convoluted it is to track the spending.
It should be safe to say that the government isn’t expecting the average voter to get hung up on these sorts of details. We’ve learned in the days following the Throne Speech that much of the spending won’t really be flowing in the immediate future. This could mean that large, visible projects will be ongoing right into an election in 2016. Large projects will create jobs and have a direct impact on Manitobans. Despite admitting many of the projects won’t start right away, Premier Selinger is already saying the tax increase has created thousands of jobs. If nicer highways mean more to voters than being taxed higher or their government showing restraint it has potential to be a winner. I’m sure we can also expect another fresh set of government ads letting all of us know how great this spending is as well.
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There really can’t be much doubt that by increasing the PST the NDP government was making a conscious decision to increase revenue in an attempt to quell its increasingly large budget deficits without making the tough decisions to cut spending. It does look like they misjudged how Manitobans would react to paying more tax. The tax increase itself together with a dreadful communications plan has the government looking more vulnerable than ever. The recent throne speech was another attempt to stem the tide of resentment towards the government. With over two more years for the government to throw around the cash at large projects it is not completely crazy to think that it just might work.
Kelly McCrae is a former PC caucus staffer and is currently a public affairs consultant with Grey Owl Public Affairs. Follow him at: @kellymccrae