Where would Albertans be without such sound guardianship of the public purse?
In 2008, give yourself a 30% wage hike.
In 2009, set spending to run a deficit of 11%, later jumping to 20%.
Later in 2009, cut your own salary by 15%. Cut cabinet pay by 10%.
Freeze the salaries of top civil servants.
Preach restraint.
Easy enough when you are still looking at a net gain of between 15% and 20% on your own pay.
-srbp-
4 comments:
Ed,
To put the story and your commentary in perspective:
In 2008, the pay increases were a result of government playing catch-up with a very hot economy where wage rates had been seeing hikes for a number of years in the 30% range.
The deficit increase from 11% to 20% is almost solely the result of low natural gas prices and hence low royalties paid to the government...not much the government could have done about gas prices.
In the meantime, the government is reducing program expenditures and drawing on their sustainability fund which has $17 billion in savings in it. This fund was established to take the province through times like these.
And you insinuate that they aren`t good guardians of the public purse......I don`t know of many other provinces out there that are as well positioned financially as Alberta.
Well, Touton, for a government to be faced with a 20% revenue drop, I'd say they were living more than a bit beyond their means and depending, much like the crowd here, on fairy take commodity price projects.
Yes they have $17 billion in the bank but that's what you have to do when the cash flows in faster than you can spend it. Thank God for Peter Lougheed.
And as for the current round of cuts, we can likely attribute those more to Ed's growing political opposition on the right than to any sound fiscal management.
Whether they were living beyond their means is a debatable point. I would argue that they were doing a fair bit of catching up on the accumulated infrastructure and program cuts that arose as Premier Klein was tackling the deficit. As well, over the last number of years, Alberta saw substantial numbers of people moving in to the Province which also lead to a substantial increase in demand for services, everything from teachers to doctors and nurses. Even today, there are areas like Edmonton, Fort McMurray, Red Deer and Calgary where there aren’t enough schools and hospitals nor health and education professionals. So government had to respond to those pressures, regardless of revenue levels.
As to their forecasts of commodity prices, these were generally in line with third party forecasts with the exception of the most recent quarterly update where government is more bullish to the tune of 10 – 15% percent so I take exception to the fairy tale projections comment. My view is that this has been a fiscally prudent government that has responded to public pressure and a real need for increased funding as a result of the factors I identified above. This same public is now calling for more restraint, which is fair given the circumstances that the Province faces. And Premier Stelmach’s government is responding....and I don’t mean in the context of today’s announcement of salary cuts for the Premier, Ministers and senior civil servants. The last budget froze salaries for elected officials and senior level bureaucrats, departments were directed to cut program funding and infrastructure funding was cut back in some areas.
And Ed, the $17 billion in savings had nothing to do with Lougheed. Lougheed set up the Alberta Heritage Savings Trust Fund about 30 years ago. The money in that fund is not being used to tackle the current fiscal challenge. The $17 billion I’m referring to is the sustainability fund that government set up a couple of years ago and is the result of surpluses over the last number of years. This fund was set up for exactly the purpose that it will be used for this year and next. Again, hardly an example of fiscal mismanagement. On the contrary, I would argue that it points to a fiscally prudent government.
I won’t argue that today’s announcement of the Premier and Ministers taking cuts wasn’t politically motivated....it is exactly that, a political response...tokenism if you will. But I do take exception to the suggestion that this government hasn’t been good fiscal managers.
The fairy tale part would be the idea that prices are only going up from here.
As for the rest, a government that is that far in deficit was - on the face of it - living beyond its means. We've seen the same thing here where wildly optimistic projections were used as the excuse to boost spending to insanely highly levels: umpteen multiples of the rate of inflation. The result is that the health minister before this admitted the spending was unsustainable and that health care cuts were necessary.
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