Additional thoughts on referendums

I apologize in advance if you were one of the few people who read my first post on this subject over a year ago, as this re-hashes much of what I said there. But I feel compelled to post about it again in light of a MyToba column wherein Spencer Fernando argues for holding a referendum on increasing or decreasing the sales tax. “If a referendum on a large tax increase is a good idea, a referendum on a large tax cut is a good idea as well” suggests Spencer, although if you ask me, neither is a good idea.

At one point Spencer makes the following stunningly contradictory statement: “with the global economy facing significant challenges and growth expected to be slow for some time, tough choices will have to be made. That’s why the PST cut should go to a referendum.” This is why we elect government representatives — to make tough decisions when necessary, not to bail on that responsibility by passing the buck back to the electorate. It is highly unlikely that the general population will vote for a specific policy that will deny themselves of some benefit or take money out of their pockets. We can’t rely on referendums to make “tough choices”. We need to trust our elected leaders to take a long term view of the economy and make appropriate spending and taxation decisions, even if they are unpopular.

Furthermore, and this may come across as elitist (although sitting here in my Costco cargo pants I sure don’t *feel* elite in any way), but complex policy decisions should not be left for the public to decide directly. Not because people are stupid, but because people have lives and different areas of expertise. You can’t expect Joe and Jane to have an understanding of the various implications of a tax change for example, or separating from the European Union. Their votes therefore are likely to be influenced by rhetoric from special interest groups and various individuals who have something to gain. Referendums therefore don’t create more democracy so much as they generate more influence for biased parties with some sort of vested interest in the outcome.

Government bodies by contrast have a whole infrastructure of neutral (ideally) people who have expertise in economics and related fields, who are well-equipped to advise the government on policy direction. The governing party will of course steer the policy based on their ideology or values, since that’s what got them elected, but they will do so in an informed manner. It does not make sense to toss this resource aside and turn the decision over to the Simpsons on Willowlake Grove.

The twist I hadn’t thought of until now was, what if the government changes its mind? The Selinger gang got booted out of office, not just because they increased the PST but because they lied about it. They breached the trust of the electorate. Pallister, now, got elected in part on a promise to decrease the PST. He is therefore obligated to follow through.

But what if he can’t? The poor guy took office and (surprise) the books are worse than he thought and now he’s in a pickle. What is he to do?

A referendum could be a tool to change his mandate. He could explain what has changed and the referendum would essentially ask for permission to break a key promise. It would have been a difficult trick for Selinger to pull off as nothing fundamentally changed between the election and the tax increase, but it could theoretically be an option for Pallister in this case.

Still, it should be avoided if possible. The government should not be asking a blogger wearing cargo pants from Costco if they should increase or decrease taxes, and such a referendum should absolutely not be enshrined in our balanced budget legislation. However, upon reflection, I am not entirely opposed to the idea of using a referendum to alter a key part of the government’s mandate in some circumstances. It’s cheaper than calling an early election to get a whole new mandate if that’s the logical alternative.

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