Madam Speaker, it gives me great pleasure to rise in the House today to support my hon. colleague's motion urging the government to deal with our budget crisis through spending cuts rather than new tax increases.
I cannot stress enough how important it is to approach budgetary policy from the point of view that government in Canada is too big. There is a very simple reason why government spends too much. It tries to do too much. It tries to do things that it either cannot do at all or that it can do but does very badly.
I brought up this point in discussing Bill C-65. I said then, and I say now, that unless the Liberal government understands where the deficit problem is coming from, it will not be able to solve it. I said that our spending problem comes from our big social programs and that no solution which fails to target them can allow us to deal with our spending problems.
I also said then, as I say now, that we should listen to the Auditor General. We should make sure that when we devise a program we understand clearly what it is supposed to achieve. We should also make sure that we have a clear set of criteria to measure whether or not it has succeeded. We should shut it down if it is not succeeding and shows no signs of succeeding. That applies to the question of how to cut spending. It also applies to the question of whether to cut spending.
Our fundamental objective is to balance the budget. A secondary objective is to balance it at a sufficiently low level. If the government were to balance its books by spending and by taking in taxes three-quarters of the GDP I would not be happy. We should certainly consider whether any budget balancing measures lead to a zero deficit at an acceptably low level of overall spending and taxation. Our main objective is to balance the budget.
I know that the Liberals are still waving their little red book and claiming that 3 per cent of GDP is a good deficit target. It is not. It is painfully inadequate. Let us suppose that all we are setting out to do is to reduce the deficit to 3 per cent of GDP, to go over the cliff a little more slowly. How are we going to do it? What will our program be? How will we tell if it is working? What will we do if it is not?
There are three ways to try to control the deficit. The first one is to raise taxes. The second one is to cut spending. The third one is to fiddle the books. In my home province of British Columbia they are getting pretty good at number three. I am not even going to consider it. The only thing that I am going to say is that leaving things like the Canada pension plan off budget is not a good idea.
Let us assume that the federal government's books get neither better nor worse over the next few years. That leaves raising taxes or cutting spending. I do not think there is any big mystery about the appropriate yardstick for success or failure. Is the deficit getting bigger, staying about the same or is it getting smaller? By that standard, any reasonable person would conclude that what we have done over the past decade has failed.
If members want a grim laugh go back and read some of the speeches by one Brian Mulroney while campaigning for the Prime Minister's job. Or go back and read the budgets of Michael Wilson or Don Mazankowski. Heck, read the budgets by the former Liberal finance minister, the Prime Minister. They all preach about the dangers of deficits and debt.
It is absolutely amazing to see how many budgets are brought into this House and prefaced with the remarks that the deficit and the debt are the most primary concern of the government of the day. They all promise to bring budgets under control and I have no reason to think they were anything but sincere. Look at the method they chose: constant tax increases. Apply the yardstick. Did the deficit shrink appreciably? No, it did not.
George Orwell once said it is the first duty of every intelligent person to state the obvious. I am about to state the obvious. Tax increases have been tried as a deficit reduction measure for a long time and they have failed. This is also true internationally. It is time therefore for us to recognize the wisdom of an observation by Nobel prize winning economist Milton Friedman: "Governments will spend whatever they can take in plus whatever they can get away with".
The record is clear. Tax increases do not solve budget imbalances. Budget imbalances are caused by spending. They are caused by programs whose appetite is far greater than the tax system can deal with. No tax increases. Spending cuts.
The problem is on the spending side. That is where the ducks are. As Ralph Klein from Alberta said: "If you want to go duck hunting you have to hunt where the ducks are".
