Could be right. Could be wrong. #nlpoli

If you accept the provincial government’s version of things, spending a half a billion dollars more than you are collecting is a responsible decision.

That’s the headline the government’s communications people put on the news release covering the release of the fall budget update.

And if you look at either the Telegram or the CBC version of the story,  the biggest thing to notice is that the provincial government deficit is $100 million less than originally forecast.

Let’s take a deeper look and see what is there.

The Keystone Kops Ride Again #nlpoli

We already knew that the provincial cabinet had abandoned their budget before the document had been debated in the House.  That happened last week when the Premier ordered the justice minister and the attorney general to abandon the cabinet-approved cuts in the justice department.

Less than 12 hours after meeting with the same officials justice minister Darin King consulted before cabinet approved the cuts, King and attorney general Tom Marshall (right, not exactly as illustrated) told reporters that whatever those officials had said would now be the policy.

The change of policy is breathtaking enough.  Not only will some of the laid-off court security officers be rehired, but cabinet has also lifted the hiring freeze to allow the High Sheriff to immediately hire more staff.  Someone will also be appointed to conduct operational reviews of the three departments – High Sheriff,  legal aid and Crown prosecution service – involved in the cabinet flip flop.

But that’s not the truly striking aspect of this abrupt change.

The Lady is for Turning #nlpoli

Only a few days ago, natural resources minister Tom Marshall was telling us that the Premier was an Iron Lady.  A compassionate one, mind you, but an Iron Lady, nonetheless.

Firm in her decisions.

Unyielding under pressure.

Tom was telling us that Kathy Dunderdale and Margaret Thatcher were made of the same stuff.

What?

No. 

Tom was not drunk.

No.  He was not stoned, either.

And it was not April Fool’s.

Knock it off and keep reading.

Damn the finances! Full spend ahead! #nlpoli

We don’t know precisely what economist Wade “the Can-Opener”  Locke is doing to earn his loonie from the Newfoundland and Labrador taxpayers.

Finance minister Jerome Kennedy hired him this year to give advice on how to manage the province’s financial mess.  According to the Telegram his contract caps of his pay at $75,000 for a couple of months work.  Locke says regardless he’ll only bill a dollar.  That’s decent of him given that the university is giving him 80% of so of his usual paycheque now that he is on paid research leave from his usual job.

Locke has given the provincial government advice before on everything from Equalization to the annual budget to Muskrat Falls.  We don’t know what, if anything, he got paid for those other stints, but that’s really neither here nor there.  The thing is that Locke is closely tied to the current administration and to what they are doing.

We may not know what else he has been doing the past few weeks but Kennedy released a short memo Locke sent him on March 25, the day before the provincial budget.  It’s a telling little document in many ways.

Budget downs and ups #nlpoli

Earlier this year, our government projected a deficit for 2013-14 of $1.6 billion. 

We are now forecasting that the deficit has been significantly reduced to $563.8 million – a billion-dollar improvement to our bottom line.

That’s the way finance minister Jerome Kennedy started the 2013 budget speech in the House of Assembly on Tuesday.  He said the dramatic change to two factors:  more money coming in and “deliberate actions” by government to “rein in spending.”

One Telegram story on the 2013 budget ran with the idea of extra cash:  “Unexpected oil revenues help with deficit”.  Eight million extra barrels of oil production will bring in $265.5 million in new cash.

A CBC online story said the billion dollars came from two places:

Just over $301 million of the billion-dollar boost over recent projections is attributed to government cuts. Another $696 million came from improved expected revenues for the coming year.

Take away the money the Telegram tallied up and you get about $440 million.  The CBC story said that came from “…royalties or corporate taxes from oil and mining.”  Another news report added in a windfall in HST money from Ottawa.

All sounds wonderful.

The only problem is that the whole story doesn’t add up.

The Debt is Passed: Budget 2013 #nlpoli

[Note – see below]

The throne speech promised that the same Conservative financial management that produced the current financial mess would continue and they delivered in Tuesday’s budget.

The strategic problem remains unchanged

The Conservatives will continue to spend billions in one-time cash from oil and minerals.  That’s the structural deficit people have been talking about and the Conservatives have done nothing to change that.

Tuesday’s budget gave us the year-end cash figures for 2012 and the forecast for 2013.  Here’s the chart from Monday’s post on deficits and surpluses that shows spending and the non-oil revenue.  We’ve updated it to include the cash figures for 2012 (actual) and 2013 forecast from the 2013 Estimates.  Remember that the Estimates are presented on a cash basis.

No adult supervision #nlpoli

Not even 24 hours after the Premier insisted that the daily layoffs would continue until finance minister Jerome Kennedy delivered his budget speech,  Jerome issued a news release  - at 1:30 PM - announcing that they would be holding off on further layoff announcements until he delivered the budget speech.

As it turned out, NTV’s Mike Connors had tweeted around noon that the “Premier says government has decided to stop the trickle of layoffs until budget day.”  CBC’s David Cochrane tweeted the same thing.

Cochrane and Connors also noted that -  as Cochrane put it -  “Premier says more than 500 jobs will be cut in budget. Not all layoffs. There is retirement incentive. No more cuts until budget.”

Meanwhile, 17 employees in a raft of departments got word today that they were headed for the door. 

Apparently, those are the last ones until the budget speech.

Budgeting Control and Resources #nlpoli

Shortly after the 2003 general election, the newly elected Conservative politicians accepted a proposal to cut down the number of health boards and education boards across the province.

Save money, they said.

Save money, the politicians repeated.

And so it happened.

As it turned out, the consolidation didn’t save any money.  It certainly didn’t reduce the public service payroll, a goal the Conservatives set out in their election platform.

“Doom and gloom” #nlpoli

Seems that finance minister Jerome Kennedy isn’t the only fellow out there conducting the annual budget “consultation” farce this year.

According to the Southern Gazette, justice minister Darin King “acknowledged, as part of a small cabinet committee appointed by Premier Kathy Dunderdale to bring budget recommendations back to government, he was asked to split the pre-budget consultations with Mr. Kennedy.”

Apparently, the idea is to have a bunch of ministers fan out across the province so they can come back with ideas on how to get through a “couple of years” when oil production will be down and things will be tough.

A couple of years.

Only two years?

That’s an interesting way to put it.

What’s more interesting is the way the Southern Gazette led into their story on the Marystown session:

It was largely more ‘doom and gloom’ from Justice Minister Darin King, as he conducted a provincial pre-budget consultation in Marystown Friday afternoon.

Yuck.

King had company at his session.  Education minister Clyde Jackman tagged along.

And that small group King mentioned?  It includes Nick McGrath, the province’s government services minister. 

-srbp-