Canada, cuts and communities
Guardian.co.uk – News/Society/Public Sector Cuts/Letters
Wednesday 9 June 2010
Please accept this plea from Canada to avoid the excesses of a “Canadian-style star chamber” (Cameron: cuts ‘will change British life’, 7 June). In the 1990s, Canada’s federal government was gripped by a zealous enthusiasm for spending cuts that resulted in billions of dollars cut mainly from health, education, housing and other social spending.
Canada’s much-heralded national housing programme was dismantled in the Liberals’ 1996 federal budget. The Liberal leader of today, Michael Ignatieff, has publicly apologised for the excessive housing cuts of his predecessors, and other Liberal politicians of the day have mused, publicly and privately, that the cuts of the 1990s went too deep.
In its 2008 report Growing Unequal, the Organisation for Economic Co-operation and Development noted that while Canada did better than the rest of the OECD in cutting poverty and income inequality from 1985 to 1995, we fell behind the OECD in the decade starting in 1995.
The fevered political atmosphere and deficit mania of the 1990s led Canada’s federal government to make drastic cuts in programmes that have had a deep impact on the quality of life for all Canadians. The lesson from the “Canadian-style star chamber” of the 1990s is that it is brutally easy to make swingeing cuts to public social expenditures, but that those cuts have deep and long-term consequences for people, communities, the entire society and the economy.
Director, affordable housing and social innovation, Wellesley Institute
• Let me just make sure I’ve got this right. First of all, a bunch of bankers lose unimaginable amounts of our money by making bets on a bunch of dodgy mortgages. Eventually the banks realise the bets are based on worthless assets, and that technically they are bankrupt.
The government bails them out with billions of pounds, transferring the debt to the public sector. The bankers, full of gratitude, pay themselves multimillion-pound bonuses which they invest in such a way as to pay as little tax as possible.
We express our anger by voting out the government and replacing it with a new one, which promptly blames the debt on the profligate spending of its predecessor, and tells us that the only solution is to cut public services. Civil servants lose their jobs, unemployment rises, libraries are closed, support services for the very poor, the dispossessed and the desperate disappear. Those who caused this mess in the first place get away with it, and are probably already planning the next disaster.
Are we really that gullible?
• Tax versus expenditure remains an ideological as well as an economic question that each generation needs to ask itself anew. Do we tax more (affecting the richest in society more) or spend less (hurting the poorest in society more)? So far, nobody is openly addressing this issue, beyond mooting small increases in VAT and an increase in tax on certain speculative forms of wealth generation. If the relative merits of cutting spending and raising taxes are not publicly discussed soon, those on the economic-liberal right will be able to continue gleefully dressing up their ideologies as economic necessity. The bigger question of what kind of a society we want will thus have been answered without even being asked.
Dr Richard Misek
University of Bristol
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