10 January 2017

Behaviour Patterns #nlpoli

January 2016.

Dwight Ball tells reporters in year-end interviews that "everything is on the table" to deal with the government's financial problem.

Then, Ball took everything off the table. As SRBP put it last year:
No cuts to spending as that would slow the economy.  Ditto for tax increases.  Even “efficiency” went out as Ball told the Telegram’s James McLeod that you couldn’t deliver existing services without the existing staffing levels.
In the budget,  the provincial government boosted spending by 12%.  That was on top of the 12% boost the year before.  Ball increased taxes, largely because the bond raters and the short of cash in the markets gave him no choice.  There were some modest cuts but the cash just got shifted to spending somewhere else.

The big cuts, the serious cuts or whatever Ball hoped to achieve with the unions would come in negotiations.

All the usual suspects - opposition politicians, union activists, people dependent on government hand-outs - accused Ball and the Liberals of "austerity".
People will starve, they said.

None did.

People will die.

None did.

That's because there is no austerity in the Newfoundland and Labrador.  raising taxes and shifting around spending within a budget is not austerity by any measure of anyone's imagination.  And it certainly isn't the reason why the provincial economy shed jobs last year.  Newfoundland and Labrador lost jobs just like all the other petro-provinces in Canada.  The difference between this province and the others is that they added a lot of part-time jobs.

And then Ball and the Liberals abandoned all the nuisance cuts he could ditch, found a bit of cash from Ottawa to lessen a tax people didn't like (as if anyone likes taxes),  and abandoned plans for a fall mini-budget and cuts to spending last year.

People went quiet.  The Liberal polling numbers didn;t get better but people stopped shrieking and that was good enough.

Now, right after Christmas, Ball told the St. John's Rotary Club that we didn't have a revenue problem, we had a spending problem and that there'd have to be cuts of some kind.

Big thing:  talks with the unions. That's how Ball plans to do whatever he plans to do.

"We are really into a negotiating process with our unions right now," Ball told CBC's St. John's Morning Show last week, "and we're looking forward to this discussion because they have made commitments that they see some opportunities to help us with this situation as well."

As the Telegram's James McLeod noted over the holidays, the government needs $250 million to meet its budget projections.   In the CBC's version of things Ball would have to trim $275 million.

That's it.  A deficit somewhere north of $3.0 billion  and all they are going to do is shift things around by $275 million.

They can do that with the same old formula:
  • Less spending.  
  • More money. 
  • Some combination of the two. 
Well, there's more money coming from Ottawa for health.  There's also Term 29 payments if they can get that back on the go.  Not a lot but better than nothing. Year's worth of the levy. The book tax of $2 million.

Since oil tumbled the first time in 2008,  people around these parts live and die by the teensiest shift in oil prices.  Last May, folks got all woody about a hike in oil prices that lasted maybe 30 seconds.  A hike of one dollar a barrel in oil would bring $23 million in additional cash for the provincial government, CBC told us at the time.

Not enough to slay the mighty deficit of $3.5 billion, mind you but the forecast that oil would be $10 a barrel above last year's forecast of $42 would mean a lot for the 2017 budget.  A $230 million lot.
Other income might be up or down. That might make for a few cuts here and there.  All together, though, not exactly a truly radical amount of money to try and shift around but likely to produce a lot of upset folks as they go through the annual budget pantomime for the umpteenth year in a row.