The annual budget consultation farce started on Monday with a couple of sessions.
This year the provincial government has turned out a budget simulator that is supposed “to illustrate the tough budget choices” the provincial government is facing and “to promote a public dialogue on how we can set a sustainable fiscal course.”
The simulation can’t really do either of those things. The information is relatively recent but the options to adjust income and spending don;t cover the full range of policy choices the government can make. The ones it does offer are artificially limited to presented increases or decreases. That’s a programming choice as much as anything else, but the reason for the artificial limitations is not important. The fact is that the choices are deliberately limited.
The result is that people can’t really see what sorts of choices the provincial government might make to set a “sustainable fiscal . . . → Read More: The Sir Robert Bond Papers: The Unsustainability Problem #nlpoli
CBC’s On Point this weekend delivered up some all-too-familiar conversation on the budget and a political panel talking about Judy Manning but sometimes you have to look closely at things to appreciate the value in public comments by politicians and reporters.
In an interview with David Cochrane, finance minister Ross Wiseman confirmed that he cannot even think about trimming government spending because the economy is heavily dependent on it. Wiseman put the figure at about 30%.
Regular readers of these e-scribbles have know this for years. What’s news in this is that we have a finance minister admitting it publicly.
On the outside, the spring budget for 2014 looks like a delicious assortment of goodies for everyone. You can tell it is delectable because everyone is shouting for joy and drooling over their good fortune.
There is not a single group who have had their hands out for government money that did not get something. And they are telling anyone who will listen just how happy they are.
Once you bite into one of sweetmeats in the Conservative Quality Assortment budget, though, the result might be a wee bit less tasteful.
Finance minister Charlene Johnson will read the new provincial budget speech on Thursday.
In keeping with the provincial Conservative tradition, though, they’ve been announcing bits and pieces of the budget already. On Monday, for example, justice minister Darin King announced that the new budget would contain money for 20 new sheriff’s officer to provide court security and new lawyers and staff for the legal aid division.
Both news releases specifically indicated that the money was from Budget 2014, that is, money that isn’t supposed to be announced until Thursday. Reporters asked King if the finance minister would have money for these announcements.
The Conservatives used to say that Newfoundland and Labrador was eastern North America’s energy warehouse. Once Danny Williams ran for the hills and left Kathy Dunderdale in charge, she kicked everything up a notch.
Energy warehouse was too plain for Kathy, whose party ran on the slogan “New Energy” in the 2011 general election.
With Kathy running the place, it became a super warehouse. “We are an energy super warehouse,” said Kathy countless times.
The New Energy Party even clipped this bit of Kathy from the House of Assembly for its website back in 2011:
Mr. Speaker, this Province is an energy super warehouse. We have what the world wants. We will bring it to market. We will supply our own people, Mr. Speaker, and we will earn from those resources for generations to come.
“We will supply our own people, Mr. Speaker.”
. . . → Read More: The Sir Robert Bond Papers: The Vibrant Unsustainable Super Energy Debt Warehouse #nlpoli
When any country or province depends heavily on the money that comes from resource extraction, it affects politics there.
Political scientist Michael Ross is probably the most recent author on the subject. Terry Karl has also written extensively on the resource curse. She wrote of the best known books on the subject: The paradox of plenty: oil booms and petro-states. You can also find some of Karl’s further thoughts on the issue in an article she wrote in 2007 and revised in 2009.
These studies focus on the developing world, for the most part, but what academics observe
. . . → Read More: The Sir Robert Bond Papers: The Politics of Oil and Budgets #nlpoli
As part of the orchestrated campaign to attack the people making the comments instead of the comments themselves , finance minister Tom Marshall trotted out in front of the news media on Friday to lace into a group of five lawyers.
Marshall said comments by five lawyers opposed to Muskrat Falls were “nothing new” and had been addressed before. All true.
At the same time, though, Marshall quickly read through an obviously prepared diatribe in which he said that the “use of such inflammatory language in my view is irresponsible and borders on fear mongering.”
People should pay attention
. . . → Read More: The Sir Robert Bond Papers: Not exactly, there, Tom, b’y #nlpoli
Simply put, Tom Marshall’s most recent news release about the report by Dominion Bond Rating Service doesn’t match what the bond rating agency said in a news release about the provincial government’s finances.
You can see that pretty clearly if you read the whole release from DBRS.
The release indicates that DBRS uses the words “prudent fiscal management” in describing the provincial government’s performance.
Here’s the full quote from the finance department’s release:
In confirming the province’s “A” and R-1 (low) Stable Trend status, DBRS highlighted the Government of Newfoundland and Labrador’s “prudent fiscal management” as playing a role in
. . . → Read More: The Sir Robert Bond Papers: Marshall’s release doesn’t match DBRS public statements #nlpoli
The provincial government set its budget this year based on an oil price forecast of US$124 a barrel in 2012.
As we move up on the midway point in the fiscal year (it starts on April 1), oil is well below that. The result is that the provincial government could wind up with a deficit of nearly three quarters of a billion dollars, according to the Premier.
Some people are amazed by this.
They shouldn’t be.
This fits a pattern.
For starters, we need to establish a few things so that we are all on the same page.
. . . → Read More: The Sir Robert Bond Papers: The Art of Budget Forecasting #nlpoli
Via labradore, a chart that plots Conservative unsustainable public spending since 2003 with recently announced controls on discretionary spending.
In a column in the weekend Ottawa Citizen, Brian Lee Crowley of the Macdonald-Laurier Institute made a convincing argument for investing provincial government oil revenue in an investment fund:
Natural resource revenues, by contrast, gyrate wildly. The temptation, when prices are high, is to pretend those revenues will always exist, causing a cycle of booms and busts in public finances. Moreover if you acquire recurrent obligations on the basis of one-time asset sales, an inevitable day of reckoning comes. The natural resource is gone and you have a lot of public servants you can’t pay and a lot of
. . . → Read More: The Sir Robert Bond Papers: Another call for an oil investment fund #nlpoli
In the wake of the latest revelations of financial mismanagement in the provincial government, SRBP has been looking at some of the possible contributing developments over the past decade or more.
Last week, SRBP noted that it appears the provincial government broke up the treasury board secretariat around 2007. They sent some of its bits off to one department and put the rump of its administration – about the size it had been in 1968 - under the finance department, as it had been before the 1973 reforms introduced by the Moores administration.
At around the same time,
. . . → Read More: The Sir Robert Bond Papers: The Bow-Wow Parliament lacks bark and bite #nlpoli
Mr. Speaker, if the members opposite think that the level of scrutiny that we do over a $3 billion expenditure in health care is to take every single health authority and work down line by line by line through every piece of that, I do not know what they are thinking over there.
Health and community services minister Susan Sullivan, House of Assembly, May 30, 2012
Let’s hope that health minister Susan Sullivan doesn’t sit on the treasury board.
That’s a committee of cabinet created under the Financial Administration Act. Passed by the House of Assembly in
. . . → Read More: The Sir Robert Bond Papers: The Root of the Problem #nlpoli
If the provincial government can actually get control on its spending and head down the road to management reform along the lines that Eastern Health’s Vicki Kaminski talked about on Tuesday, then they are headed down the right road.
Kaminski described the results of a review of EH’s operations that showed the regional health authority ranked dead last in efficiency. EH was costing taxpayers more than anywhere else in the country to deliver a range of services. The review didn’t look at the quality of the health care involved but on the cost of delivering care and all
. . . → Read More: The Sir Robert Bond Papers: The Hard Road Ahead #nlpoli
The CBC’s John Gushue has a tidy analysis of Premier Kathy Dunderdale’s recent suggestion that government employees could work from home in the future as a way of cutting down on government real estate costs.
Gushue notes that people have been talking about “telework” for a couple of decades. But where it was once an idea, today it is commonplace.
Unlike other employers that have looked to telework to improve productivity and employee lifestyle, Dunderdale’s interest in the concept is pretty simple and – for politicians in this province – typical and old-fashioned. As Gushue notes:
. . . → Read More: The Sir Robert Bond Papers: More pork for the buck #nlpoli
The provincial Conservatives promised on Tuesday that they had a 10 year plan to reduce the provincial debt.
They have been in office since 2003. in that time they boosted public sector spending by more than 60%. Since 2009, the Conservatives have acknowledged their spending practices are unsustainable.
To date they have done nothing to change their ways.
Here’s some of what they promised in 2003:
Keeping real program spending constant by limiting the annual growth in spending to the anticipated growth in inflation. New needs that arise will be accommodated within this budget constraint. Ensuring value for . . . → Read More: The Sir Robert Bond Papers: There’s no greater fraud… “unsustainable” version #nlpoli
As you try and contain your excitement on provincial budget day, here are a few numbers you might want to keep in mind:
Dozens: What CBC reported on Friday as the number of layoffs in the budget.
Fewer than 150: What CBC reported on Monday as the likely number of layoffs in the budget.
$5.0 billion: The amount of cash Tom Marshall had in the bank last year after the finance minister paid all the provincial government bills a year ago. Don’t believe it? Check Volume 1 of last year’s Public Accounts. Windfall
. . . → Read More: The Sir Robert Bond Papers: Significant budget digits #nlpoli
Job cuts in the public service. One of the more spectacular communications frig ups by the Premier lately.
Here’s what your humble e-scribbler said on March 6:
So if Danny Williams couldn’t cut anything even after saying it in plain language, what makes anyone think that Kathy Dunderdale and the rest of her crew are even saying “cuts” let alone thinking about doing them?
Then the Friday before the provincial budget is scheduled to appear, CBC reports that “sources say the job cuts will number in the dozens, instead of the hundreds.”
Of course, public sector