04 April 2014

Horsefeathers #nlpoli

While people have been agitated about comments on Twitter,  the Premier has been dazzling the politicians in the House with his explanation of the marvellous financial position of the provincial government under the Conservative Party.

On Monday, the former finance minister buggered up the amount of dividend that Nalcor will provide thanks to Muskrat Falls.

On Tuesday, he corrected himself and noted he meant all of Nalcor instead of just Muskrat Falls. That just made matters worse, though.  You see,  the Premier’s comments didn’t exactly jive with information one of his colleagues talked about in the House a year or so ago.  That’s not including the fact that much of the money the Premier attributed to Nalcor was actually coming from oil that the people of the province gifted Nalcor with for nothing.

On Wednesday, the Premier went for the hat-trick with a discussion of debt.

Here’s how he started:

…our government over the last ten years have had six surpluses, we have accumulated over $5 billion in surpluses, and we have paid down our net debt by $4 billion. Unfortunately, it has gone up lately, but it is still down about $2 billion.

I have to point out that when the members opposite were in government, for the lengthy period of time they were in government, they did not pay one cent down on the net debt. That is the difference.

Unfortunately, for the Premier and former finance minister, one does not “pay down” net debt.  You see, net debt is just a paper calculation that lists all the money you owe and subtracts any assets you have that could be used – for the most part theoretically – to pay off debt.

In essence, the Premier claimed great credit for doing something that he and his colleagues didn’t do and chastised the opposition equally for failing to do something that was impossible.

It gets worse.

Note the part where the Premier mentions surpluses, says that he and his friends paid the net debt down by $4 billion but now it is only $2 billion.

Well, that would be because the surpluses are gone.


Hence, the reason why the Premier and his colleagues are planning to borrow about $1.0 billion in order to pay the bills.

And just when things couldn’t look any worse, the Premier passed the task of explaining all this financial wonderfulness to his hand-picked successor Charlene Johnson.

Opposition leader Dwight ball asked about the provincial government’s commitment to reduce the net debt per capita to the national average over 10 years.

Johnson said that the government “listened to the people through pre-Budget consultation. There were serious issues that were raised, and we have listened to them, bearing in mind that as we go forward we do need to be very conscious of where we are going with net debt.”

Mindful of where we are going with the net debt, which would be up, of course.

Incidentally, the government net debt per capita across Canada is going up every year.  If they keep on their current path, the provincial government can meet its target without actually cutting anything.  They can just let the rest of the country get itself into the same debt mess Newfoundland and Labrador is in.

As we go forward, we do need to be very conscious of where we are going with net debt.