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What Is Kaputall?

Oxford defines Kaput as "broken and useless; no longer working or effective" - similar to our unbalanced economic system. This is a page dedicated to the intersection of capitalism and social, political, and environmental problems.

Thursday, 23 February 2012

The Drummond Report

The word "austerity" has been thrown around a lot in international politics over the past two years. Repeated attempts to curb the recession that started in 2007 proved unsuccessful in virtually every locale in the so-called "developed world", and their most recent attempts to control markets has been to drastically slash government expenditure.

Some traditional welfare states have been staggering along a rough road in the past few years. Italy's austerity measures (introduced in 2011) sparked significant outrage on part of youth, leftists, the unemployed, women, and many other groups. However, the media attention has been sharply focused on the happenings in Greece. Protests have been met with violence and often destruction of public spaces and private property ensues.

At the same time, there have been problems in Canada. While items at the federal level have been pushed to the side in favour of Harper's other ideological goals, the provinces are trying to figure out what to do. And that brings me to my topic for today: the Drummond Report. Commissioned by Ontario's Provincial Government in 2011, the Drummond Report is a document which outlines the ways in which the province can reduce its deficit in order to eventually balance its budget. Estimates from a variety of sources suggest that Ontario will not be able to have a balanced budget until some time near 2020. That's a ways away!

So first off, who is Drummond? Don Drummond is a Canadian economist who has a wide variety of work experience: the Federal Government, TD Bank, and Queen's University. Those three employers demonstrate his familiarity with the intersections of public and corporate interest. He was selected by Queen's Park in order to find a way to reduce the deficit, specifically without introducing new taxes.

When the report was yet to be released I attended an NDP grassroots meeting here in Ottawa. The meeting, which attracted a wide array of citizens, focused on the undemocratic processes of the Drummond Report. Arguing that the Ontario Liberals formed a minority government, the NDP have said that it is inappropriate not to include other parties in this process. While I agree with this particular criticism of the process, I would say that I am quite surprised at how progressive the report really is.

Instead of focusing on a basic idea of reducing cost by reducing services, cutting programmes, or casualising labour, the report is focused on smart initiatives such as striving to increase efficiency. The part I focused on most related to health care (given it's the part I know most about) and this was also the part discussed most on CBC's Ontario Today. I was pleased to see the government take a less scientific approach to health, opening up new conceptualisations of things such as health, skill, and care.

I think that the greatest failing of the report is that there is no room for new or altered taxes. Government revenues are dependent on taxation (or crown corporations). This is, of course, not the fault of Drummond as he was following the instructions laid out by the Liberals. Ontario's Liberal Party should carefully examine whether or not it is possible to maintain a progressive welfare state without reconsidering tax structures (whether corporate, capital gains, or otherwise).

One last consideration: there is a discourse of debt and deficit as bad. It's worthwhile noting that debt is neither good nor bad: it's a tool. If we were to have to pay up front for every service our society needed, we would not be able to and we would offer minimal services to minimal people. Spending more money than is made is an ability to build the future, not to "borrow against it".