24 February 2014

Budget consultations and other political insanity #nlpoli

This year it is Charlene Johnson’s turn to host a series of meetings across the province that the provincial Conservatives cynically tout as a way for people to have some input into the provincial budget.

It’s cynical because – as the Conservatives know – the major budget decisions are already made before the finance minister heads to the first of these meetings. They are a waste of time.

The people who show up at these sessions have no idea what the actual state of the province’s finances are. The provincial government hides the real numbers until budget day.   Therefore the people who show up can’t offer any sensible suggestions, anyway.  Instead, they wind up begging like a bunch of serfs for more cash for this and more cash for that, even though the cash isn’t really available.

Even Conservative political hacks like Corner Brook mayor Charlie Pender wind up sitting at a table with his hand stuck out.  Pender told one session that smaller municipalities, with limited ability to raise their own cash from taxes should be forced to come up with three times the municipal contribution his city should have to find.

“We do have very limited sources of revenue here in the west coast, in particular the Corner Brook region,” the TransCon papers reported him saying. “One of the major issues we have is finding enough revenues to meet needs of both capital and operating expenses that we have as a regional centre.”  Charlie clearly has no idea about what is going on in the province, financially or demographically. He shouldn’t be proud.

These pre-budget consultation farces get really obnoxious when you have politicians like Charlene Johnson – or Tom Marshall, the real finance minister, before her – telling people that we “need to spend within our means and when you look at our net debt it is a little over $8 billion. So we need to look at that as well and do what is right for future generations to come. [CBC]”

Higher Public Debt is their Plan

Regular readers know that the Conservatives running the province have as much interest in controlling public debt as whores do in promoting chastity. Conservatives like Johnson have been talking about debt reduction - claimed they’ve deduced debt - for most of the past decade.  At the same time, gross public liabilities today are higher than they’ve ever been thanks to the way Charlene and her colleagues have mismanaged the provincial government’s spending.

They’ve admitted to the mismanagement, by the way.  Unsustainable, they admitted, as long ago as 2009.  And yet they have excuses after rationalizations after fairy tales in order to justify keeping the taps wide open.

As for future generations, Charlene is just being wicked.  It’s like telling people that your number one priority is public safety after the public finds out your department hasn’t been inspecting bridges thousands of people use each day.  An independent inspection of the bridges even found one had vanished, apparently unbeknownst to Charlene’s department at the time.

Charlene’s plan for future generations is a public debt somewhere north of $20 billion and likely to climb higher.  The figure is staggering when you consider that the average tax-filer in the province shows a pre-tax income of less than $40,000 a year.  The number is mind-boggling when you consider that Johnson and her colleagues pretend that the $20 billion that is the inevitable result of their plan is lower than the $11 billion or so they found in public debt when they took over in 2003.

It is astounding to see a number that big when you consider it is founded entirely on the premise that the province will be awash in oil money, even though the evidence – and tons of common sense – suggest that such an idea is insane.

The Insanity Hat-Trick 

It’s insane to say one thing when the evidence shows the exact opposite.

It’s insane to believe revenue will only go up and to spend accordingly.

Nothing exemplifies insanity, and the Conservative’s fundamental problems, than the new hospital promised to Corner Brook.

In 2007, just in time for the general election, the Conservatives promised the west coast city a replacement for the aging Western Memorial hospital. They didn’t just promise a one-for-one replacement.  No.  The new hospital would much bigger with cancer treatment and all sorts of other things available only in St. John’s right now.

Cost was not an issue when it came to making promises.

Cost got to be an issue not long after, though.

They managed to find a site in 2009.  In 2010, the Conservatives announced they’d start building in 2012 and have the hospital finished by 2017, a decade after they made the promise.  In 2012, they put about a million dollars in the budget for the hospital. Not as shovel hit the ground.

In 2013, Charlie Pender could shout that the hospital was coming and all was perfect.  The reason for Charlie’s pride was an announcement by Kathy Dunderdale that the Conservatives had set aside $227 million to spend over three years to advance the planning for the hospital. 

Not build it, mind you, as they had promised in 2010.

But to plan to build it.

Or, more accurately, to keep planning, because they’ve actually been at the planning thing since at least 2007, right?  They’d start building in 2015, if everything went well, according to the latest plan.

Last week, Tom Marshall came out of a cabinet meeting in Corner Brook. He told reporters that the three years of additional planning will now cost $607 million, not $227 million. One year into a simple three year plan and the budget is already two and a half times what it was.

Since 2003, the Conservatives haven’t been able to deliver public works on time or on budget.  The Corner Brook hospital is one example.

Muskrat Falls is another.  Supposed to start in 2009.  $5.0 billion estimated cost in November 2010.  $6.2 billion in 2012 when work started, behind schedule.  2013:   $7.2 billion, unofficially. The government is still sticking to the 2012 figure and Nalcor refused media requests for updated cost information.

More of the same

Not surprisingly, the Conservatives aren’t keeping another of their financial promises.  In 2011, they promised to get spending under control.  They’ve been promising it since 2003.  As the Telegram reported last week, the Conservatives committed to announce an annual cap on spending growth in the budget.

Since then, the Conservatives have refused to disclose the spending ceiling.  There’s nothing surprising in that.  They’ve boosted spending to record levels and these days are annually spending – or planning to spend – hundreds of millions more than the government takes in every year. 

Politically, they can’t afford to do anything else.  When you are as low in the polls as the Conservatives are, you just don’t have the political capital to spend on putting public spending on a sound footing. 

All they can do is talk about putting things right and keep on doing the stuff that created the problem in the first place.

The more things change…