Thursday, March 29, 2012

Some comments, issues and concerns about the Federal Budget

This likely to be rather random.  

1) Slowly but surely more and more of the burden of the federal budget falls on personal income taxes.   The budget calls for more than 50% to come from personal income taxes by 2016/17

2) A bit less than half of the federal budget is actual spending by the federal budget, the other half is transfers.  29.4% is transfers to elderly, unemployed or parents.   23.8% is money going to provinces.   0.8% is transfers to local government.   These areas are not ones the Feds can easily change which means Federal government savings have to come from the $115 billion they directly spend.

3) The budget is calling for the penny to eliminated, good idea but a tiny savings.   The budget says $11 million, I only get to $4 million.   Still, it will make life easier for banks and stores.

4) Raising OAS to 67.   I know there are many saying we do not need to do this because the program can pay for itself.   I think it is important for non-monetary reasons.   I do not think it is good for our society to have people in retirement for decades.   It is better for the individual's own health and well being to be employed to an older age as well.   We should looking at a goal of having the average retirement age for people being close to 70.   It used to be 65 back in the 1970s and dropped as low as 60 by 2000.  At the moment it seems to be around 62.

Allowing people to defer OAS to 70 will hopefully encourage more people to work a bit longer.

The budget also calls for new federal civil servants hired 2013 and beyond to have 65 as their retirement age.

I thought I would get more in, but work, shopping, dinner and kids all got in the way.   Not much to show for having started this four hours ago.   I hope to post more thoughts later.

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