Tuesday, June 22, 2010

UK coalition wastes no time in axe-cutting and revenue raising

What would Jesus -- excuse me, Stephen Harper -- do?

In an attempt to get Britain's tattered finances back on track, the Conservative-Lib Dem coalition today announced some pretty tough austerity measures that even by Canadian standards are quite draconian.   The sales tax has been raised to a mind-boggling 20% (up from 17.5%), and the government is vowing to cut public service spending by 25%.   In addition, child benefits have been frozen, and seniors' pensions de-indexed to be raised only to a maximum of 2.5% per year -- but oddly enough sin taxes are also being held where they are.   Capital gains taxes are up, though not as much as some Cons had feared; and in an interesting bit to the surfing community, a proposed tax on landlines to speed up the rollout of 100% broadband is being scrapped.   Finally, there will be a banks profit "super-tax."

At least this coalition has a definite target to balance the budget which is no later than FY 2016.   Can we expect to see such a promise from PMS?   Let's see.   Slowing down the rate of growth in "net debt" as Slim Jim calls it just doesn't cut it.

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Anonymous said...

Looks like a good plan. To bad Harper wasn't smart enough to do the same in Canada. More proof that we need a Liberal government.

BlastFurnace said...

The scary part of this? The British tabs were actually praising Canada for leading the way on the slash and burn approach to protect social services. But on the UK networks, Flaherty and company were talking as if it was their idea -- when in fact they have broken the bank and any sense of fiscal responsibility.