Tuesday, Finance Minister Tom Osborne announced that a new independent committee would review the province’s tax system, reporting by November 2018.
“The main objectives of the independent tax review are to ensure the province’s tax system is competitive and fair, identify ways to simplify the tax system and reduce costs for both government and taxpayers. During the review, consideration will be given to whether the appropriate tax mix is applied to taxpayers as well as the progressivity of the tax system,” the news release said.
“The tax review will also consider the province’s tax capacity, taking into account issues such as competitiveness and economic impacts.”
The review will cost more than $100,000, and its panel includes members from across the province: Botwood, Corner Brook, Happy Valley-Goose Bay and St. John’s.
Given the sheer breadth of its mandate, $100,000 will be a drop in the bucket.
But that’s only half of the issue.
By going outside to find expertise, you’d think the government was suggesting it had no particular skill in tax policy or something.
But the numbers tell a different story.
Executive Council has a senior economic policy adviser who makes $115,474, the Cabinet Secretariat has a director of research and analysis ($108,399), the Treasury Board Secretariat has seven employees — including a deputy minister and two assistant deputy ministers — earning a combined annual total of $726,552.
The Department of Finance has an entire tax policy division — six people in all, earning a combined total of $534,876 a year — including a director of tax policy and three policy analysts. Also in Finance, there’s a provincial comptroller-general ($137,236), a director of policy and strategic planning ($105,928) a pair of assistant deputy ministers ($127,999 and $147,793) and a deputy minister ($178,265).
That same department has an economic research and analysis division with a director and four economists ($404,370 annually), a fiscal policy division ($287,461 annually), and a policy and program analysis division ($384,859 in salaries). The provincial auditor general’s office costs $3.9 million a year, with all of its expertise. And that’s really just the tip of the iceberg.
So why, exactly, is Osborne spending extra money and adding a new layer of public policy-making?
Well, maybe for strategic reasons. The Liberals’ last round of tax policy changes earned them a public kicking, despite the fact that this province was in a huge fiscal hole.
The timing of the committee’s work will allow the Liberals to take the committee’s findings and put them in place during what will probably be the party’s last budget before a provincial election.
And, if there are tough choices to be made, there will be a lovely independent straw horse to blame for each and every one of them.