Many people say Premier Wall is a dreamer - a politician that isn’t afraid to think big. Well, here’s a bold vision for him to embrace.
Mr. Premier, we challenge you to imagine a Saskatchewan that not only leads the country in growth, but a Saskatchewan that shares the riches of its such success with taxpayers.
While your government and the former NDP government have reduced taxes over the past decade, Saskatchewan tax rates are still higher than Alberta and B.C. It’s time to close that gap.
Obviously future tax relief needs to be accompanied by a slower growth rate of government spending. From 2006-07 to 2010-11, annual spending increased from $7.7 billion to $10.5 billion; a 36 per cent increase in just four budgets.
Had spending been capped at the combined rate of inflation and population growth since 2006-07, the government could have paid off the province’s $4.1 billion general debt, eliminated school taxes, invested in health care and saved $435 million in annual interest payments.
Going forward, we encourage you to restrain spending by changing the incentive structure behind the bureaucracy.
First – try injecting some competition to improve results and lower costs. If a bureaucratic division’s work could be put out for tender, it should be; but be sure to allow existing employees to bid-in for the work.
As the City of Indianapolis found, many government employees were able to keep their jobs by winning tenders to continue providing government services. They won the bids as they knew all along how they could trim the fat and improve results; all they needed was a little competition to unleash their potential.
Next, take all the grants given out to special interest groups, arts groups and businesses and give those dollars right back to taxpayers to decide who gets what. And here’s a name for the giant rebate program - “Consumer Driven Culture and Commerce.”
For remaining core government services that aren’t easily subjected to competition, change the model so that bureaucrats have the incentive to cut back on costs. By introducing a process known as “gainsharing,” the government could split cost savings with employees as long as they maintain or exceed future productivity targets.
This could encourage bureaucrat divisions to go from taking up an entire floor of a building to a small office area, perhaps where some employees work from home; coming into the office as needed. With proper productivity targets and incentives in place, some employees could even be bought out all together.
In terms of taxation, why couldn’t cost savings and future revenue growth be used to bring in a single 10 per cent income tax rate for individuals and businesses like the province of Alberta?
Further, why couldn’t Saskatchewan raise the basic personal exemption to match Alberta’s $16,825 level? That would be much closer to the poverty line; allowing everyone to keep more money for the basics (food, shelter and clothing) without having to worry about provincial income taxes.
Phasing out education taxes should also be a top priority – especially as many baby boomers are retiring and will face challenges paying income insensitive property taxes.
In summary, we encourage your government to set bold targets for tax relief, debt repayment and spending restraint. Saskatchewan taxpayers have paid their dues; it’s time to reap the rewards.
Colin Craig is the Prairie Director for the Canadian Taxpayers Federation.
