Thursday, July 09, 2009

Let's Not Squander This Recession but Use it to Revisit the Role of Government.

There are other elements to consider around the recent declaration by Premier Stelmach that there will be no tax increases on his watch. Deficits are also tax increases by other means because the pain is deferred to the future - usually to be repaid on someone else's watch. So it is arguable that running a deficit is a defacto tax increase just not on the current watch.

But there are other considerations too. The tobacco tax was not a money grab, it was a health promotion and prevention issue behind the tax increase last April. The research shows that more expensive smokes are and the less visible they are - like the elimination of the "power wall" displays, the less likely kids will start and get addicted to tobacco. There is also a health prevention argument around the liquor tax. Eliminating them both government reduces revenues to offset deficits (tax increases by other means) and increases the social and health risks associated with these legal but sometimes lethal products. I am not a prohibitionist just a realist.

The last additional point I think is worth noting about eliminating the revenue side from the fiscal took box of government is the issue of the role, efficiency and effectiveness of government. The old Klein approach of simple-minded across the board cuts and damn the consequences is not likely to be the Stelmach approach this time. However, there may be stuff government can do without, stuff we can do better and other stuff that needs doing particularly in a prolonged recession like we are in these days. This is the time to do that kind of revisiting and revamping of the relationships and roles we expect from government.

This recession is a perfect opportunity to revisit and redesign the role of government and our relations to it, as business, service providers and citizens. We can improve delivery and be clearer on what we expect of the public sector and our governance model. We can retool the private enterprise sector and community based social service sector too. The goal is not just efficiency, as important as that is, but it must be more focused on the effectiveness of the outcomes and how we achieve them using government as a vehicle.

This is a quest for better questions as much as it is better answers. We have the Governance Secretariat looking at these matters focused on agencies boards and commissions. We need the same thing to happen in the link between government and the social services sector and the private enterprise sector too.

Lets not squander this recession. Let's make sure we come out of it better focused, better equipped and better able to meet the challenges in the 21st century realities. It would be such a waste of an opportunity. We can't merely try to revive, restore and sustain the inadequate governance, economic, environmental, social and technological models of the past.

Premier Stelmach is hinting at this approach in some follow up comments to his no recent tax increase declaration. Lets hope he makes it more explicit and actionable.