There is so much wrong with Brian Pallister’s plan to introduce a healthcare “premium” that its hard to know where to begin.
It introduces a potentially regressive and significant tax by a government that has consistently criticized the previous government for increasing the PST by 1%. The Pallister government has promised to reverse that increase before the end of its mandate yet the Premier now tells us he plans to introduce a tax that will be far more costly for Manitobans.
If Premier Pallister thinks that Manitobans won’t do the math to understand how the cost of a 1% sales tax compares with a healthcare tax, and what it will mean for their families, he’s clearly had too much Costa Rica sunshine.
We know that the Pallister government will lose approximately $300 million by reducing the PST by 1%. We don’t yet know what level of premiums different households will pay, however the total revenue generated will need to be large enough to offset the loss in PST revenue and whatever administrative costs are involved. Our guess is that Pallister will want to maximize revenue from the premium, so looking to the levels in other jurisdictions is a good place to start.
This article in the Winnipeg Free Press shows how a 1% increase compares with the likely cost of healthcare premiums. There is…well…no comparison. For example, the additional 1% sales tax paid by a family of four earning $60,0000 is around $196.00 per year – for the entire household. An adult in British Columbia earning a net income of $42,000 pays a $900 premium annually. So a family of four with two parents pays $1800 per year.
This oped in the Winnipeg Free Press describes in more detail the regressive nature of healthcare premiums in Ontario and B.C. and why we should be concerned about going down this path in Manitoba.
Is a healthcare premium necessary?
Brian Pallister tells us the premium is necessary to pay for spiralling healthcare costs. This article in the Winnipeg Sun shows us that spending on healthcare has not increased drastically as Brian Pallister says it has. Spending has remained stable relative to GDP for the past 15 years.
It is also notable that the Premier, who has promised Manitobans a vote on major tax increases, has said that introducing a healthcare premium does not require a referendum because it isn’t an income or sales tax (how convenient).
What he has done instead is invite Manitobans to complete this online survey. Check it out and tell Premier Pallister what you think. But first check out our followup post on this issue. Value Manitoba lays out the problems with “Manitoban’s Making Choices” survey.