Madam Speaker, the hon. member for Kingston and the Islands did a desperate job of defending the restrictions on debate this afternoon, but there really is no excuse for restricting debate on such an important topic. It is not because the media do not think it is a hot topic any more but because people out there are aware of the budget and the problems it could produce.
At the various public meetings I am attending people keep asking me: "What did you think of that budget?" It is almost as if there is this background awareness that the budget, which was a major anticlimax, might just come back to haunt us.
Several weeks ago when the finance minister had his short meeting with Moody's bond rating service it was clear that Moody's went away dissatisfied with the explanation from the finance minister. The Financial Post predicted the same day that Canada's debt rating would be downgraded within a few days. As we see that is exactly what happened.
Even when Moody's announced the downgrade the markets had already anticipated the news and there was very little reaction out there. As the lack of substance in the budget becomes more and more apparent, it is quite likely we will continue to incur ever higher interest rates to finance our borrowings.
We have been lulled into a false sense of security lately by a dollar that seems to have risen a little in value. I even heard the business reporter on CTV this morning saying that our dollar was holding up very well. However, when we look at our currency against a basket of major world currencies instead of simply comparing it with the U.S. dollar, we find that our currency has continued to drop against the basket of major currencies.
In an international sense we are actually losing ground quite rapidly. This means that price inflation is just around the corner. Significant price jumps have started to occur already in some consumer products. In my office we recently purchased a second laser printer. The price had jumped more than 8 per cent in six months. Can anyone remember when the price of electronic goods actually went up? Prices have been dropping for years now, and all of a sudden we have price increases on things like cameras, VCRs, vegetables, garden tools, paint and cars, almost everything. It is starting to look like standard Liberal economic policy: allow the dollar to drop and inflation comes roaring back in.
The dollar dropped in the late seventies and early eighties from $1 to 85 cents. Inflation rose. The export sector boomed. It all looked very rosy. We had the appearance of prosperity while our deficit and debt were ballooning dramatically. Unfortunately the strategy is not going to work this time. We are a little too close to the debt wall for it to be effective.
Because of my business background I have quite a number of friends who are small business people. I have taken the time to ask them in the last few weeks about their sales and price levels over the past six months. In a group that includes one of the most productive realtors in the country, a hardware and garden tools importer, a car dealer and a furniture sales company, all have experienced dramatic drops in sales over the past two months at the same time as they have experienced huge price increases from suppliers because of the low dollar.
Stacey's, a large furniture manufacturer in Vancouver, revealed on a radio talk show last week that bankruptcies in the furniture industry were imminent because sales had suddenly dropped to levels lower than they were in the last recession. On the same radio talk show, bankruptcies of car dealers were being predicted as well.
The hardware importer I know has had two price increases exceeding 15 per cent, in some cases since January, and reports that some retail clients have declared bankruptcy in the past month. Sales in this sector have dropped sharply at the same time as the price increases that they are trying to pass on because of low profit margins.
Except for the export sector, the good news is not being passed on to other parts of the business sector. In the meantime there are those sneaky budget tax increases in place taking a bite out of everyone's spending power.
The Liberals and the NDP must be the only people in the country who think that the penalty tax on banks announced in the budget will not lead to higher bank service charges or loan charges for the average Canadian.
Liberals and the NDP must be the only people in the country who think that a 1 per cent increase in corporate taxes and a change that forces corporations to report their income at the end of a calendar year will not lead to an increase in the price of goods.
Liberals and the NDP must be the only people in the country who think that a 1.5 cent increase per litre on gasoline will not lead to an increase in the price of gasoline. Actually the new gas tax also increases the GST because GST is added on after the other taxes on the price of gasoline.
Incidentally the Deputy Prime Minister said during the election campaign that if the GST had not gone within a year of the election she would resign. She has not done that yet.
As I have said before, despite the tax increases and the token spending cuts, the ship of state is still going down a little bit slower with a smaller crew on board. That is all. In three years the increase in interest payments on our growing debt will consume every cent of savings the minister made in his budget. He did not go nearly far enough and he is not going fast enough.
I mention New Zealand all the time in my speeches. It has shown us the way by making some pretty massive cuts in government spending at the same time as it lowered taxes. New Zealand is now expecting a budget surplus in excess of $3 billion. It forecast $2 billion and is getting in excess of a $3 billion surplus. It has increased spending on social programs. Its unemployment rate is down to 5.6 per cent.
I cannot use props in the House but I have a full page advertisement from a New Zealand newspaper wherein Roger Douglas, the architect of a lot of New Zealand's restructuring, has now proposed that by the year 2000 New Zealand could have zero income tax.
I am not suggesting we could follow the procedure here because New Zealand is going to run on a 15 per cent GST. That is easy to do with a consumption tax when there are no bordering countries. Perhaps by the year 2000 New Zealand could be income tax free and running on just a consumption tax. Imagine zero per cent income taxes. That is pretty good.
I repeat what I have said before. The best way to put more money in the hands of the poor, of families, of business, of everyone, is to cut spending and to cut taxes. Tax cuts and spending cuts make it easier for people to buy homes and improve their standard of living. Things work better when people make their own spending decisions instead of having big brother government make the decisions for them.
High taxes punish those who are the most productive in our society. High taxes are a symptom of a government's failure, incompetence and inability to see the damage taxes are doing to society.
The finance minister gave it his best shot and was overruled by what might be a socialist cabinet. I congratulate him for trying but I castigate him for not doing what he knew had to be done. He stands responsible for the massive loss of net worth that is now occurring for Canadians across the country who do not have offshore shipping companies and a multimillion dollar worth.
Shame on the government. Shame on the MPs who failed their constituents by avoiding the truth that we cannot buy our way out of poverty. We have not even begun to address other very real problems with government programs that lead to waste and cheating.
For example, I have a copy of an advertisement that appeared in the Vancouver Sun on March 4, 1995. It was sent to me by a constituent, Mr. George Brooks. The advertisement reads:
UIC top-up positions: two festival production jobs available mid-April with performing arts association. Outgoing individuals with festive or event experience sought. Must have minimum of 21 weeks UI benefits.
My constituent asks since when has UIC been a prerequisite for employment in Canada. Here we have blatant abuse of a program that is supposed to help people get retrained. Mr. Brooks has asked quite a good question.
Special interest groups know how to milk our system. Nothing was done about it in the budget.
Look at Bombardier. The hon. member mentioned government grants to business. Bombardier, a tremendously profitable corporation, is receiving grants from the federal government. These grants go directly to the bottom line because it is a profitable company. We have no business giving grants to a company like Bombardier.
I urge members to vote against the implementation of the 1995 budget on the basis that it has failed to address government spending and brings us one step closer to a debt and currency crisis.