Mr. Speaker, I will be sharing my time with my colleague, the member for Winnipeg North—St. Paul.
The preceding two speakers have conducted a dialogue which was interesting and amusing in some ways. I do not say that in any derogatory sense, but it seemed to be a philosophical discussion. I heard references to a moral imperative. I heard echoes of Max Weber and Tawney, but it reminded me of earlier views of economics and finance that they followed God given laws, a sort of theocratic conception.
I would suggest that the rules of economics are man made rules, or let us say person made rules in the age of political correctness, and they are developed and confirmed experientially. As William James or Dewey would say, truth is something that happens to an idea. It is confirmed operationally. That is the pragmatic definition of truth.
To get us further into this philosophical discussion I would have thought we were dealing with a paradigm shift, to use the trendy words of current commentators. We are moving from one era of economic thinking to another. Somebody said the end of history; I would have said the end of Keynesian economics.
The great charm of our finance minister is that he has presided over the ending at least for the time being, the death blow, of Keynesian economics, the concept that governments would throw away money, deficit spend and somehow the economy would come into healthy being. This may have been true in the 1930s and 1940s when Keynes was at his height but it is an error to take any thinker out of its particular space time dimension.
To his credit, the Minister of Finance has refused to become a prisoner of the past. It is not the end of history. It is the end in our time era of the concept that governments spend. We have leaner and trimmer governments. It is shown in the fact that when this government came to power in 1993 it inherited a $42.8 billion annual deficit budget. We set as an objective to achieve budget integrity, a balanced budget by the year 2000. As we all know, the 1998 budget was balanced. What about 1999?
Our Prime Minister is fond of repeating a conversation he had with the prime minister of Norway at one of these economic meetings. He said to the prime minister of Norway, “We are going to be balancing our budget”, and the prime minister of Norway said, “Good Heavens, I am sorry for you. Your problems will begin. The moment you have a surplus, everybody wants to spend it and you make a lot of enemies who find it difficult to resist”.
I think the key note of our present budgetary policy, what I would call the present conception of economic truth, is that fiscal integrity is the requisite of a sane society. We have gotten down our budget deficits to zero, we have a surplus and we must continue with responsible economics.
The recommendation that my constituents have made and which has been echoed by many of my colleagues is that the surplus in being used responsibly should be earmarked 50% for reducing taxation and amortizing the accumulated national debt, the suggestion is a 50:50 balance, and 50% for creative social programs. Putting money back into taxpayers' hands is a way of getting taxpayers to invest in the future, to invest in new industries.
In British Columbia I think the dramatic impact on the economy has been the creation of the new industries, space technology, informatics, these areas. They are interesting because they reflect the contribution of science and technology and pure research.
I used the metaphor in earlier discussions in caucus in previous years of the economic miracle in Germany and Japan, the countries whose economies were shattered by defeat. Their industries were bombed out but they invested their first moneys in research on the basis that fundamental research does not yield rewards tomorrow but the day after tomorrow it may. Five or ten years down the road is when we become the leaders in the areas in which we have invested in pure research. The correlation between pure research and practical application in industry is there.
I think this is the explanation of the German and Japanese miracles. It is one of the things we have been able to sell to the finance minister: invest in research because that is where the jobs will come in the future and that is how to keep our best talent.
All of us I think are alarmed by the brain drain. We are losing our best and our brightest to the United States, to Germany and to other countries because taxes are too high. We have not spent enough on research facilities. We do not offer the stimulating research environment which for many people is better than take home pay.
Let us look at the problem of repaying student loans of $50,000 or $60,000. For a graduate student in one of the professional disciplines it may take a number of years to repay that in Canada but in the United States that sort of thing is repaid in a year or two with the salaries the graduates are getting.
I mentioned the correlation between fiscal integrity, balancing the budget, reducing taxation and spending money on research. I will utter another connection here, another link which takes us back to the earlier concept of economics as political economy. We cannot separate economics from government. We have tended to forget it. We do not need a leaner, more modern system of government.
The pre-emptive concern with Quebec, which I do not criticize as a concern because it is all with us, but at the expense of other issues has prevented us from examining the rationalization of parliamentary and governmental processes. Too much antiquity is present in this chamber. One can worship tradition as an end in itself but tradition is simply a way of recording customs useful and productive in the particular time era. The dynamic of a tradition is adjusting it, upgrading it to new, changed social conditions.
Some of the more interesting developments that are occurring now are in a way a repeat of Prime Minister Pearson's co-operative federalism. The new term social union comes from another more dynamic federal system which is very modern.
It sometimes helps to have lost a war. You have to start from scratch. You build a new governmental system. The German federal system is much more modern than ours. The social union is basically an attempt to readjust federal, provincial and municipal relations, new approaches to tax power and its allocation. But here you get the issues. If you followed the European Union principle of principe de subsidiarité you would allocate to governments the things they do best.
I think in the new approach to the new post-Keynesian budget we will be concerned with modernizing the system of government, getting the provinces to co-operate. If they do, not though, the commitment is there. The federal government must spend money on research, must invest in our young people. It goes hand in hand with this business of lowering taxes, getting money back into the hands of productive and useful people so they will invest in creating the jobs and the infrastructure necessary to carry our economy safely into the new century.