Spring, Annual Budgets and False Hope for the Poor

At this time of the year, both the federal and provincial governments hand down their budgets. Last year in particular, both of these budgets were politically motivated and designed to fool the casual observer that the poor and socially disadvantaged are being cared for. With most of you aware, we all know the general population has somewhat increased its concern for the needy among us. We read upon the New Year that the growing gap between the very wealthy among us and those barely getting by has grown exponentially, despite reported economic growth in this country, Newfoundland and Labrador is left with an aging and poor population. How much surplus dollars government has is irrelevant if people are cold and hungry.

Imagine yourself as somebody who is not benefiting from all of this hoopla around growing prosperity and economic growth. Imagine that you are too ill to work and being one of the growing unfortunate numbers who do not have a private disability plan to look after you, or you have been forced to retire early due to circumstances of your plant closure and your age is a major strike against you getting new employment. Imagine that you are a single parent, through divorce or death of a spouse, that you find yourself thrown into the unbound world of economic competition and cannot obtain affordable childcare in order for you to go back to work or to upgrade your skills. You and a growing number of people are now turning to the government's minimalist plan of support and learning now that all of these years you enjoyed substantial tax cuts are now coming back to bite you. We no longer have the social safety net many anticipated at one time would be there. We no longer have job security that at one time lasted from the time you left school until the day you collected your gold watch and a retirement pension. Employers reject the older, long-term unemployed, injured or disabled worker, in favour of younger people they can pay less and expect more from.

When this happens to you, where do you go? Some people are lucky enough to have a skill to sell or family members to fall back on to assist them in times of need. However, many people find self-employment and entrepreneurship not suited to their lifestyle, needs and budget, nor do they have family members that can or will help. You end up with what the government has left: a tattered social safety net, designed less to serve you than to serve a growing number of low-wage, rule-breaking employers that will use and abuse whatever powers they may have. As a person with a disability, it is no longer viable to remain on benefits, as the value of your benefits have eroded to such a point that it is impossible to survive on so little. Injured workers are more likely to find themselves in trouble with the new Workplace Safety and Insurance Board, which all but guarantees adequate compensation for injured workers and wherever possible, attempts to force you back to work before you are ready. Workmans Comp... I need not say much more about that.

It is the Spring of 2007, which is usually supposed to represent hope for hundreds of thousands of Newfoundland and Labrador families. The federal government, in hopes of getting re-elected, presented a budget that on its surface appears to be something for everyone, including the working poor. The provincial PC's released their own budget a few short days later, attempting to outdo the Conservatives' attempt at becoming Liberals, by trying to make themselves appear to be New Democrats. However, all of this is flash in the pan upon further inspection.

The vast majority of the federal government's budget is geared towards increased transfer payments to the provinces, as well as additional tax cuts that benefit particular sectors of the middle class. For those who work, but do not earn enough to pay income taxes, these tax cuts are of no use to you. For those of you unfortunate enough to rely on assistance, they are even of less use to you. If you are a person with a disability, the only mention in the federal budget is a Registered Disability Savings Plan; that is, a financial instrument that is designed similarly to the Registered Education Savings Plan, but is set up for persons with disabilities, friends and relatives to deposit money into it up to a total amount of $200,000 per person. This RDSP, as they call it, again depends on having the kinds of friends and relatives that have the financial means and willingness to contribute to such an instrument on behalf of a person with a disability, which is usually somebody who is younger and anticipates a number of future financial needs with respect to his or her disability. People who are older, living on HCS and lack such family support will not benefit from such an instrument.

If you are a member of the "working poor"; that is, if you are a single person and earning more than about $4,500 per year, but less than $12,899 per year, you will be entitled to the new Working Income Tax Benefit (WITB). At $4,500, the benefit is at its highest peak of $500, and as your income moves towards $12,899, it decreases substantially until it hits zero. For families, the figures are about $8,500, at its peak and ending at zero at approximately $21,000 per year.

An article in the Toronto Star, Thomas Walkom in his wisdom advised this benefit made good press, but will not help the majority of the working poor, as most year-round minimum wage earners earn more than $12,899, and an estimated 89% of such earners are part of families, where it is likely there is another earner or other sources of income. With regards to families, if both partners earned a minimum wage year round salary, they'd still earn more than the requisite $21,000 per year. To say that this benefit will lift hundreds of thousands of families out of poverty is a lie. It is a way to impress the public that "something is being done" without having to do anything at all, while at the same time, saving $1 billion of this initiative that is obviously not going to be used to be spent on something else. However, the Conservatives did not promise an anti-poverty budget, so they can be forgiven for being a tad slovenly in that direction.

Provincially, the picture is much more cynical, especially given their pre-budget hype about this budget was about it being an "anti-poverty" budget. When you promise so much, but not deliver, this makes the picture much more cynical and brazen to many voters. Their major anti-poverty initiative is an investment over a five-year period on a new Child Benefit. They also promised an investment in affordable housing, as well throwing big numbers at some voters may "wow" some, but upon closer examination, one finds that these numbers do not add up at all.

A little background here. In 1998, the federal government designed the National Child benefit Supplement as a means to reduce child poverty in the provinces, but leaving the provinces with the right to clawback 100% of the dollars from this Benefit from families who were in receipt of any kind of welfare or disability benefits. Some provinces, including Newfoundland Labrador, chose this direction, though not all provinces did. Over time, a movement gained some momentum when it was learned that the poorest of the poor will not benefit from this federal initiative and these same people would only get this money "back" if they took on a low-waged job and left the benefit rolls. It did not matter that many of the parents in this picture were persons with disabilities, who had substantial barriers to employment, or parents who had no access to subsidized or low-cost childcare. They were to receive this benefit on one hand, and have the provincial government claw it back from the other.

After the mathematical shell game is completed, how much money does this mean for families on HRLE and HCS Disability Support Program benefits? I have been promised by various authorities I spoke to, that the net result will be positive for all families, but it appears to me that these families will be getting substantially less benefit from this prorgram than would families that receive all of their income from wages would.

With the general direction and philosophy of this government's budget, I am becoming increasingly concerned that while this government may not REQUIRE people with disabilities to find work in exchange for continued eligibility for benefits, as with the case of Ontario Works, this is being done by stealth. That means that when somebody is finding they can no longer afford to pay for the basics of their survival, they may find themselves forced to take any job -- often at their own detriment and at really no help to their prospective employer. Does the government really want to do this to its vulnerable citizens? I think as a general public, we need to ask these questions and try to find out why this is happening. Because less and less jobs offer pensions and disability plans of their own, anybody ... and I mean anybody ... can be just one paycheque away from this kind of tragedy. By then, it will only be too late when you discover that in exchange for all the tax cuts you received while working, you gave up most of your rights to social protection in the event of job loss, disability, ill health, divorce, etc. It is about time that we STAND UP and do something about this before more people get hurt.

Brudder