Wireless spectrum auction profit already counted toward deficit

Written By Unknown on Jumat, 06 Maret 2015 | 22.39

The final tally isn't yet known, but Industry Minister James Moore on Friday is expected to announce the government has netted between $2 billion and $3 billion in the latest auction of wireless spectrum.

Although all of that money will be in the government's coffers before the end of April, it will be of little help to Finance Minister Joe Oliver as he continues the difficult task of presenting a 2015 federal budget that is both balanced and believable.

The spectrum licences being auctioned off are good for 20 years, and the government is accounting for the revenue over the lifetime of the licences.

In other words, when it comes applying this income toward the bottom line, it will count for only $100 million to $150 million a year for the next two decades.

What's more, as this auction and a subsequent one planned for April have been in the works for a long time, the government has already factored in this revenue when presenting the 2014 budget and the fiscal and economic update this past November.

In its planning assumptions, the government is counting on a total of $1.5-billion in 2015-16 from the proceeds of the sale of government assets — including an estimate for the spectrum auction.

As of November, only $300 million had been applied toward that line item — much of that coming from the last spectrum auction that brought in $5.3 billion and is being spread over the 20-year life of the licences that went with that batch.

All of this means that this and the next round of spectrum auction results, while welcome revenue, will do nothing to alleviate the tight spot the government finds itself in.

To balance the budget this year — as has been promised by the government since the last election and reiterated as recently as Monday by Prime Minister Stephen Harper — Conservatives are contending with expensive tax breaks and much lower than expected oil revenues.

In January, Oliver announced he was delaying the budget until at least April; although there is no formal rule, budgets are normally delivered in February or March.

The stated reason was to allow time for the markets to become more "stable" after the sudden fall in the price of oil in the last part of 2014 and early 2015 — most observers agree the government was biding its time in hope the price of oil would recover and bolster government revenues.

Economists and the Parliamentary Budget Office agree the government will likely be in a position to table a balanced budget — but there is very little room to manoeuvre or deal with the unexpected.

In this scenario, any little bit of unexpected revenue could be a big help.

Unfortunately for the government, the money to be raised by the wireless spectrum action has long been expected — and already counted.

Anda sedang membaca artikel tentang

Wireless spectrum auction profit already counted toward deficit

Dengan url


Anda boleh menyebar luaskannya atau mengcopy paste-nya

Wireless spectrum auction profit already counted toward deficit

namun jangan lupa untuk meletakkan link

Wireless spectrum auction profit already counted toward deficit

sebagai sumbernya

0 komentar:

Posting Komentar

techieblogger.com Techie Blogger Techie Blogger