29 September 2009

“Unsustainable” public spending: the fin min version

Former finance minister Tom Marshall said on Tuesday that he was once asked by an analysis for Moody’s bond rating service if he felt the growth in public sector spending was sustainable.  Marshall didn’t reveal his answer. 

The subject came up in a discussion with talk show host Randy Simms on VOCM.  Marshall noted that the province spends more per person than any other province in Canada. 

Simms suggested that high rate of spending was because of the geographical dispersion of the population.  He didn’t mention that costs in Newfoundland and Labrador are typically lower for many things, including wages.

At that point, Marshall noted that people not from here often don’t understand the issues and then mentioned in passing the comment from Moody’s.  He also referred to boosting spending based on oil revenues only to be faced with a problem when oil prices drop dramatically.

That matches recent comments by health minister Paul Oram that the provincial government’s spending levels were “unsustainable.” 

It doesn’t match claims by Marshall and other cabinet ministers up to now that the current administration was practicing sound financial management.