Remember I mentioned that big jump in the provincial direct debt yesterday?
Well Loyola did throw out something on it yesterday in the House of Assembly that explains at least part of it, although not that well. A phone call and some e-mails to one of the people who understand these things put me on the trail of the cash.
Following is what Loyola said - word for word. I am going to cut the man some slack since he was turning beet-red yesterday dealing with Opposition questions. If the strategy works, Roger, keep piling on the pressure and see if you can cause a stroke. But man, it is a hard way to do politics.
Also, I am going to check on this in greater detail since Loyola's explanation is just nutty. If I read Loyola correctly, we were supposed to be given Equalization at a steady rate and to do that we get a loan of almost $400 million that we have to pay back. Equalization comes with no strings attached. This shows up on our books as a debt, even if it is interest-free.
More to the point though, this whole line of questioning was about whether or not the government "cash" deficit was real or not. Mr. Sullivan appears to be saying that we don't have to borrow to make up a shortfall. What colour is the sky in your world, Loyola? Now if that $14 million shortfall this year is coming from that loan, we still wound up borrowing it - from the Government of Canada!
He also said there is only one deficit. Then he proceeds to talk about a "cash" deficit and how government will balance the books on a "cash" basis. But Loyola, if that was true, then your budget speech wouldn't have made a distinction between the "cash" deficit and the accrual deficit. That last one is one you talk up whenever you want to throw around a frightening number. Get your story straight, Loyola.
"Loyola Sullivan: When money collapses as a surplus it goes to our debt, that is automatic; besides, we are not in the position where we are going to have to borrow. In fact, we just received a cheque from the federal government for $378 million, a ten-year interest free loan, because prior to the Budget 2004, the Minister of Finance for the Government of Canada indicated that no province would get less than the four year average for equalization. So, if we got a loan - we have a cash flow now that would necessitate borrowing for that. He should understand - if he asked these questions, Mr. Speaker, I will explain them to him. We are not in a position where we are going to borrow that. He should understand that. He was Premier of this Province for two-and-a-half years."
Stay tuned for more. I don't think I am going to be eating any crow on this one.
23 March 2005
Budget Spin Control 2: the good, the bad and the ugly
After a couple of days of sifting through the budget and listening to the various comments on it, I thought I'd offer a general opinion on the whole package.
The Good: On the whole, this is a decent budget. There are sensible investments and good programs being funded. The health investments are well placed, especially the long-term care facility in Goose Bay. Whether the new money is all federal or not, the provincial government has spent it on health, despite musing earlier about doing something else with it.
The same can be said of education spending. Government needed to spend some cash on infrastructure especially as crumbling ceilings due to poor maintenance or no maintenance create a potential legal liability. Adding a new culture program is a minor outlay in the greater scheme of things but it looks good and government can claim to be saving a few teaching jobs.
And yes, Danny Williams, the amounts are "small money". A few hundred thou here. Even two or three million are tiny in government terms. The big expenditures like the $26 million in education capital actually gets broken down into small packets. The key thing is that the money is handed out all over the place. Is there anybody out there unhappy enough to go to war with you over anything in this budget? Since the future promises only more cash, anyone who didn't get their school roof redone this year or find a fresh can of paint by their door courtesy of John or Tom can just keep talking it up until next year when you'll even more cash to hand out. At worst they wait 'til election year and find out how much cash you do have to toss around.
Politically, the investments are smart since health care and education consistently poll at the top of people's issues. The government has been doing a lot of polling and I am sure they know what is irking people. This is a budget full of balm.
Politically, the budget also trumps the Opposition. As much as the Liberals have been making some solid comments since Monday - full marks Roger and company - the hard reality is that they really can't get very much mileage out of saying "You didn't spend enough, Danny". Wally Anderson complaining about a lack of a theatre space in Goose Bay doesn't trump the long-term care facility. Besides from what I hear, there could be a workable solution to the theatre problem if people weren't clamouring for a new-build hall.
Politically, Danny Williams has used the word "miraculous" twice today - at least twice - in describing his triumph over the deficit demons. My spin metre redlined badly on that one since Danny Williams didn't do a single thing to generate the bulk of the cash he got this year. Thank George Bush and the invasion of Iraq for driving up oil prices. Thank Paul Martin for shovelling out bags of federal cash.
In the end, though, even after we counteract all the stroke-me spin, this budget is a good document. It delivers the promise of sensible fiscal management coupled with social responsibility. Politically, that lines you up with the majority of the electorate (See my post on "The Independents") and therefore you are safe, Danny. Safe, that is unless the political Opposition attacks you where you are vulnerable.
The Bad: Oddity that I am, this is one public relations guy who hates spin. It makes me physically ill. Whenever I hear it, I itch in places mortals shouldn't have to scratch . This budget is full of spin - like the claims of Saint Daniel in the Deficit Lion's Den for example. Self-massage in public is a crime and political self-massage in public is no less distasteful.
As I said in a post on the budget already, the government would do well to make a really simple set of promises on the budget and deliver them. Paul Martin's secret of restoring confidence in federal budgets was to make consistent predictions and then failing to meet them, but in a good way. He coupled that with a clear commitment to spend every extra nickel on paying down the debt. He hit the target time and time again and people re-elected the government based on nothing more spectacular than accountability and credibility.
In 2003, the Tories promised to balance the current and capital account. Rather than spin out the old "cash" balance hooey, Loyola Sullivan should be sticking to the "Promise made; promise kept" line. Tell us now exactly where the extra oil money will go. When you get it, spend it exactly that way. Don't wait 'til mid-year and then claim yet another demon has been slayed. Don't drop it on The Rooms without telling us when you do it. It is my money I want to know what you are doing with it.
That's the sole basis of accountability.
The Ugly: The ugly part of this budget for me remains the lack of a longer term plan to tackle the deficit and debt. Government has everything at their disposal to map out a three to five year plan and stick to it. We had one plan last year. This year we actually have a different one. What will next year bring?
More importantly though, I do find it a little offputting when Loyola Sullivan - a man not prone to exaggeration - starts opining about a provincial debt running somewhere beyond $14 billion. When he shamelessly tosses out the figure of $17 billion, I shudder.
Let's start seeing the long-range fiscal plan.
Summary: Overall, this is a fine budget for the times. It is smart politically and smart financially. What else can I say?
The Good: On the whole, this is a decent budget. There are sensible investments and good programs being funded. The health investments are well placed, especially the long-term care facility in Goose Bay. Whether the new money is all federal or not, the provincial government has spent it on health, despite musing earlier about doing something else with it.
The same can be said of education spending. Government needed to spend some cash on infrastructure especially as crumbling ceilings due to poor maintenance or no maintenance create a potential legal liability. Adding a new culture program is a minor outlay in the greater scheme of things but it looks good and government can claim to be saving a few teaching jobs.
And yes, Danny Williams, the amounts are "small money". A few hundred thou here. Even two or three million are tiny in government terms. The big expenditures like the $26 million in education capital actually gets broken down into small packets. The key thing is that the money is handed out all over the place. Is there anybody out there unhappy enough to go to war with you over anything in this budget? Since the future promises only more cash, anyone who didn't get their school roof redone this year or find a fresh can of paint by their door courtesy of John or Tom can just keep talking it up until next year when you'll even more cash to hand out. At worst they wait 'til election year and find out how much cash you do have to toss around.
Politically, the investments are smart since health care and education consistently poll at the top of people's issues. The government has been doing a lot of polling and I am sure they know what is irking people. This is a budget full of balm.
Politically, the budget also trumps the Opposition. As much as the Liberals have been making some solid comments since Monday - full marks Roger and company - the hard reality is that they really can't get very much mileage out of saying "You didn't spend enough, Danny". Wally Anderson complaining about a lack of a theatre space in Goose Bay doesn't trump the long-term care facility. Besides from what I hear, there could be a workable solution to the theatre problem if people weren't clamouring for a new-build hall.
Politically, Danny Williams has used the word "miraculous" twice today - at least twice - in describing his triumph over the deficit demons. My spin metre redlined badly on that one since Danny Williams didn't do a single thing to generate the bulk of the cash he got this year. Thank George Bush and the invasion of Iraq for driving up oil prices. Thank Paul Martin for shovelling out bags of federal cash.
In the end, though, even after we counteract all the stroke-me spin, this budget is a good document. It delivers the promise of sensible fiscal management coupled with social responsibility. Politically, that lines you up with the majority of the electorate (See my post on "The Independents") and therefore you are safe, Danny. Safe, that is unless the political Opposition attacks you where you are vulnerable.
The Bad: Oddity that I am, this is one public relations guy who hates spin. It makes me physically ill. Whenever I hear it, I itch in places mortals shouldn't have to scratch . This budget is full of spin - like the claims of Saint Daniel in the Deficit Lion's Den for example. Self-massage in public is a crime and political self-massage in public is no less distasteful.
As I said in a post on the budget already, the government would do well to make a really simple set of promises on the budget and deliver them. Paul Martin's secret of restoring confidence in federal budgets was to make consistent predictions and then failing to meet them, but in a good way. He coupled that with a clear commitment to spend every extra nickel on paying down the debt. He hit the target time and time again and people re-elected the government based on nothing more spectacular than accountability and credibility.
In 2003, the Tories promised to balance the current and capital account. Rather than spin out the old "cash" balance hooey, Loyola Sullivan should be sticking to the "Promise made; promise kept" line. Tell us now exactly where the extra oil money will go. When you get it, spend it exactly that way. Don't wait 'til mid-year and then claim yet another demon has been slayed. Don't drop it on The Rooms without telling us when you do it. It is my money I want to know what you are doing with it.
That's the sole basis of accountability.
The Ugly: The ugly part of this budget for me remains the lack of a longer term plan to tackle the deficit and debt. Government has everything at their disposal to map out a three to five year plan and stick to it. We had one plan last year. This year we actually have a different one. What will next year bring?
More importantly though, I do find it a little offputting when Loyola Sullivan - a man not prone to exaggeration - starts opining about a provincial debt running somewhere beyond $14 billion. When he shamelessly tosses out the figure of $17 billion, I shudder.
Let's start seeing the long-range fiscal plan.
Summary: Overall, this is a fine budget for the times. It is smart politically and smart financially. What else can I say?
22 March 2005
Outside the box - The Independents
Here's a reprint of the first column I wrote for The Independent in the fall of 2003. In light of the recent budget and its mantra of fiscal and social responsibility, it seems appropriate to reprint it here.
The Independents
If you listen to some, voters on the Northeast Avalon are always Tory, have always been Tory and will always be Tory. Danny Williams is Premier today because he had such a strong political base in St. John's and the surrounding areas that he could focus his campaign on other districts and turn them to the Tory Tide. Simple, neat and tidy.
And wrong.
What traditional wisdom like that ignores is the fundamental change in the Newfoundland and Labrador electorate that occurred over the past 20 years. The political centre of gravity these days is shaped by the Independents.
They are the voters who do not faithfully vote for the same party time and again. As a group, they are better educated than the average voter. They are more likely to be part of a middle class that simply did not exist here for much of the past century, let alone most of the 50 years or so since Confederation. They are well-traveled and well read, and whether they live in St. John's, Corner Brook, Goose Bay or Shoal Harbour, they are perhaps better described as being urbane rather than urban or rural.
Independents also tend to hold certain core values. They value honesty, integrity and plain speaking. In politicians, they expect accountability - saying what you will do and doing what you said. Substance talks; spin walks.
They are fiscally conservative and socially responsible. Fairness and equity (or its synonym, balance) are much more important than rewarding those who share your views and punishing those that don't. Who you are personally is more important to an Independent than what colour you are.
Don't be surprised if these ideas sound familiar. Liberal government policy between 1989 and 1996 was built around those core values. Voters rewarded the Liberal party with three majority governments - including returning Liberals in St. John's seats in 1989, 1993 and 1996.
Things began to shift only after the Liberals under Brian Tobin showed their choices, their future and their time were actually in the past. The gap between what they said and what actually occurred was enormous. Sure the Liberals won big in 1999, but look more closely at that election. Liberals had to fight for 18 seats, coming close to losing six of them when faced with an opposition that really was not supposed to amount to anything. The undecided vote broke after the debate in '99, but it didn't pick Tobin: undecideds, likely including a large number of Independents, went heavily Tory.
In 2003, the Tory faithful mobilized strongly when they smelled victory, but what Danny Williams captured and held, like Clyde Wells before him, were the Independents. His New Approach is only new in comparison to what voters rejected in 1989 and that returned, briefly, under the second Brian administration.
For Danny Williams to stay in power, he now has to deliver, not on mega-projects and massive job creation, nor on some definition of leadership wearing steel-toed boots and making glitzy announcements. The challenge for Danny is proving he meant what he said about honesty, integrity, living within our means and doing the right thing.
In politics these days, substance talks.
Spin walks.
The Independents
If you listen to some, voters on the Northeast Avalon are always Tory, have always been Tory and will always be Tory. Danny Williams is Premier today because he had such a strong political base in St. John's and the surrounding areas that he could focus his campaign on other districts and turn them to the Tory Tide. Simple, neat and tidy.
And wrong.
What traditional wisdom like that ignores is the fundamental change in the Newfoundland and Labrador electorate that occurred over the past 20 years. The political centre of gravity these days is shaped by the Independents.
They are the voters who do not faithfully vote for the same party time and again. As a group, they are better educated than the average voter. They are more likely to be part of a middle class that simply did not exist here for much of the past century, let alone most of the 50 years or so since Confederation. They are well-traveled and well read, and whether they live in St. John's, Corner Brook, Goose Bay or Shoal Harbour, they are perhaps better described as being urbane rather than urban or rural.
Independents also tend to hold certain core values. They value honesty, integrity and plain speaking. In politicians, they expect accountability - saying what you will do and doing what you said. Substance talks; spin walks.
They are fiscally conservative and socially responsible. Fairness and equity (or its synonym, balance) are much more important than rewarding those who share your views and punishing those that don't. Who you are personally is more important to an Independent than what colour you are.
Don't be surprised if these ideas sound familiar. Liberal government policy between 1989 and 1996 was built around those core values. Voters rewarded the Liberal party with three majority governments - including returning Liberals in St. John's seats in 1989, 1993 and 1996.
Things began to shift only after the Liberals under Brian Tobin showed their choices, their future and their time were actually in the past. The gap between what they said and what actually occurred was enormous. Sure the Liberals won big in 1999, but look more closely at that election. Liberals had to fight for 18 seats, coming close to losing six of them when faced with an opposition that really was not supposed to amount to anything. The undecided vote broke after the debate in '99, but it didn't pick Tobin: undecideds, likely including a large number of Independents, went heavily Tory.
In 2003, the Tory faithful mobilized strongly when they smelled victory, but what Danny Williams captured and held, like Clyde Wells before him, were the Independents. His New Approach is only new in comparison to what voters rejected in 1989 and that returned, briefly, under the second Brian administration.
For Danny Williams to stay in power, he now has to deliver, not on mega-projects and massive job creation, nor on some definition of leadership wearing steel-toed boots and making glitzy announcements. The challenge for Danny is proving he meant what he said about honesty, integrity, living within our means and doing the right thing.
In politics these days, substance talks.
Spin walks.
Oil money mysteries solved
In earlier posts on the new provincial budget I raised some issues that struck me as odd. I undertook to provide further information once I had obtained it.
Here it is, courtesy of two phone calls to people who understand these things far better than I do. I am in their debt; they know who they are.
Never let it be said I didn't correct information I provided or give the full and accurate answer to questions I raised.
1. The missing money isn't actually missing. As noted before, the provincial government changed the way it reports Equalization offsets in the new budget. It appeared that entitlements under the Real Atlantic Accord for this fiscal year were missing. They aren't, apparently, at least as it was explained to me this evening.
Under Section 39 of the Atlantic Accord, the provincial government is entitled to Equalization offset payments if the province experiences a decline in its Equalization entitlements resulting from oil revenue growth.
Since the federal government increased Equalization payments this year, there is no entitlement to offsets under the Real Accord. Therefore, the line in the budget is blank.
The only extra oil cash this year is the money negotiated under the January deal and set at $188 million under the deal. That combined with the $70 million increase in Equalization adds up to $250 million so we will likely come pretty close to doubling our oil revenues, as we should under the new deal.
On the face of it, I'd still wonder if there shouldn't have been some number inserted here since we do get a benefit or should get a benefit from the generic solution when the Equalization entitlements are calculated. Basically, though, that is a minor quibble.
A simple footnote in the budget could have explained this pretty neatly. Had the provincial government left the reporting of this money alone from last year's budget, I wouldn't have noticed it at all.
2. Lowballing oil prices actually makes sense. Loyola Sullivan is good with the numbers but not the explanations. Those are best left to finance officials who apparently laid out a simple explanation of this in the budget lock-in. I have heard a couple of interviews with Loyola and I sure didn't get this simple explanation out of what he said. If someone wants to send me the transcript of an interview where he did say it, I'll post it and eat crow. Deal?
The province bases its oil revenue estimates on Brent crude, but lowers the price per barrel by about $5 to allow for potential production slowdowns or other problems related to offshore production that might lower output. They work off a combination of estimates and basically took a price per barrel of around US$42, dropped it by five bucks or so and worked out a number. That sounds like a prudent practice.
In all likelihood, we'll make as much as $100 million more than the budget estimate if oil prices hold above US$45 per barrel this year. The higher the price of oil, the higher the Terra Nova-related revenues go because of the royalty regime. The same thing will apply if White Rose pays off its costs quickly, like Terra Nova did and oil prices continue at these high levels well into the future.
My suggestion: video tape the budget lock-in news conference with government officials and either broadcast the thing over the internet or on the government cable channel or post the transcript on the government web site after the budget speech is out.
Doing that would actually push a lot more hard information into the public domain and prevent people from asking well-intentioned but poorly informed questions. It also stops the Opposition or anyone else from getting excited over nothing.
All I will offer in my own defence is the old saying about a cynic being an idealist with experience. Having sat through one too many bulls*** budgets, I cast a cynical eye on provincial government claims regardless of which party is in power.
Just for the record, I didn't earn a lot of friends among Liberals in the late 1990s when I pointed out that Tobin was claiming financial miracles when he was actually running deficits masked behind a raft of one-time borrowing.
Here it is, courtesy of two phone calls to people who understand these things far better than I do. I am in their debt; they know who they are.
Never let it be said I didn't correct information I provided or give the full and accurate answer to questions I raised.
1. The missing money isn't actually missing. As noted before, the provincial government changed the way it reports Equalization offsets in the new budget. It appeared that entitlements under the Real Atlantic Accord for this fiscal year were missing. They aren't, apparently, at least as it was explained to me this evening.
Under Section 39 of the Atlantic Accord, the provincial government is entitled to Equalization offset payments if the province experiences a decline in its Equalization entitlements resulting from oil revenue growth.
Since the federal government increased Equalization payments this year, there is no entitlement to offsets under the Real Accord. Therefore, the line in the budget is blank.
The only extra oil cash this year is the money negotiated under the January deal and set at $188 million under the deal. That combined with the $70 million increase in Equalization adds up to $250 million so we will likely come pretty close to doubling our oil revenues, as we should under the new deal.
On the face of it, I'd still wonder if there shouldn't have been some number inserted here since we do get a benefit or should get a benefit from the generic solution when the Equalization entitlements are calculated. Basically, though, that is a minor quibble.
A simple footnote in the budget could have explained this pretty neatly. Had the provincial government left the reporting of this money alone from last year's budget, I wouldn't have noticed it at all.
2. Lowballing oil prices actually makes sense. Loyola Sullivan is good with the numbers but not the explanations. Those are best left to finance officials who apparently laid out a simple explanation of this in the budget lock-in. I have heard a couple of interviews with Loyola and I sure didn't get this simple explanation out of what he said. If someone wants to send me the transcript of an interview where he did say it, I'll post it and eat crow. Deal?
The province bases its oil revenue estimates on Brent crude, but lowers the price per barrel by about $5 to allow for potential production slowdowns or other problems related to offshore production that might lower output. They work off a combination of estimates and basically took a price per barrel of around US$42, dropped it by five bucks or so and worked out a number. That sounds like a prudent practice.
In all likelihood, we'll make as much as $100 million more than the budget estimate if oil prices hold above US$45 per barrel this year. The higher the price of oil, the higher the Terra Nova-related revenues go because of the royalty regime. The same thing will apply if White Rose pays off its costs quickly, like Terra Nova did and oil prices continue at these high levels well into the future.
My suggestion: video tape the budget lock-in news conference with government officials and either broadcast the thing over the internet or on the government cable channel or post the transcript on the government web site after the budget speech is out.
Doing that would actually push a lot more hard information into the public domain and prevent people from asking well-intentioned but poorly informed questions. It also stops the Opposition or anyone else from getting excited over nothing.
All I will offer in my own defence is the old saying about a cynic being an idealist with experience. Having sat through one too many bulls*** budgets, I cast a cynical eye on provincial government claims regardless of which party is in power.
Just for the record, I didn't earn a lot of friends among Liberals in the late 1990s when I pointed out that Tobin was claiming financial miracles when he was actually running deficits masked behind a raft of one-time borrowing.
Find the missing cash in the budget
While you're at it, notice that the government is reporting some of its revenues differently than it used to do.
Go to the Estimates. Flip down to "Statement V, Comparative summary of federal and provincial revenues", which you can find on page viii.
Notice that suddenly we have this (add three zeros for the full amount):
Go to the Estimates. Flip down to "Statement V, Comparative summary of federal and provincial revenues", which you can find on page viii.
Notice that suddenly we have this (add three zeros for the full amount):
2004-05 (revised)
Equalization: 790, 613
Atlantic Accord: 128, 324*
Arrangement on offshore revenues: 133, 600**
*[This is the Real Atlantic Accord offsets, never previously revealed.]
**[This is the January deal by its real name.]
Now in the column for 2005-06 (the new fiscal year), the number next to Atlantic Accord is blank. It shouldn't be. The new arrangement figure is there and government should provide a number for the offsets; the new deal didn't eliminate the original offsets - it added to them.
This budget is missing at least $129 million in revenue that this government will positively receive in Fiscal Year 2005.
There is absolutely no reason why the figure should be left off.
The new deal money is there. There is no offset figure reported.
It is obviously omitted deliberately and without explanation.
Why?
N.B.: One implication of the omission is that the budget is actually in surplus by $67 million, rather than in deficit. That is a surplus without adding in the real projections for oil revenues.
Stay tuned. As I find more I'll fill in this multi-million dollar blank spot.
Loyola's Oil
Remember the movie about a boy named Lorenzo and the combination of oils that temporarily relieved his medical condition.
Alright, so the tie-in is a bit vague.
Just a bit.
Well, here are a couple of links to oil pricing to help you understand why most people think Loyola Sullivan's projected oil royalties numbers are as useless as they can be.
This one is to a site that quote for Brent light crude (a benchmark for our crude) and includes some futures out to 2007 (!). Brent is currently trading at around US$55 per bbl and the futures market has it running in the same neighbourhood out for another two years.
Here's another one that shows some trending charts for Brent. Note that in the previous 12 months, Brent has spent way more time above US$38 per bbl than it has at or below that price.
I appreciate that economists and accountants are conservative people, but surely there must be some basis for making a reasonable projection that oil revenues will be higher than the number Loyola included in his budget. Even with oil production down 6% last year over 2003, we still raked in $100 million more than forecast due entirely to higher oil prices.
If oil production goes back up to where it ought to be this year we will hardly make less money this year than last. If we look ahead to the next fiscal year, namely 2006, we should expect ever larger amounts of money.
Loyola has a problem with oil revenues; always has and I would venture always will.
Alright, so the tie-in is a bit vague.
Just a bit.
Well, here are a couple of links to oil pricing to help you understand why most people think Loyola Sullivan's projected oil royalties numbers are as useless as they can be.
This one is to a site that quote for Brent light crude (a benchmark for our crude) and includes some futures out to 2007 (!). Brent is currently trading at around US$55 per bbl and the futures market has it running in the same neighbourhood out for another two years.
Here's another one that shows some trending charts for Brent. Note that in the previous 12 months, Brent has spent way more time above US$38 per bbl than it has at or below that price.
I appreciate that economists and accountants are conservative people, but surely there must be some basis for making a reasonable projection that oil revenues will be higher than the number Loyola included in his budget. Even with oil production down 6% last year over 2003, we still raked in $100 million more than forecast due entirely to higher oil prices.
If oil production goes back up to where it ought to be this year we will hardly make less money this year than last. If we look ahead to the next fiscal year, namely 2006, we should expect ever larger amounts of money.
Loyola has a problem with oil revenues; always has and I would venture always will.
21 March 2005
Budget Spin Control 1: You read some of it here first!
The budget for fiscal year (FY) 2005 is now public.
It makes for some interesting reading and I'll have more in the days ahead.
Here are a couple of interesting little things that I noticed, some of which will sound awfully familiar to those who read this blog faithfully.
One thing to make clear up front. Forget any spin that you are hearing about all this new spending being due to the new oil deal. That's a crock of the highest order. All the new spending is due to a combination of direct provincial revenues that have no connection whatsoever to the new oil deal, new federal money for health care and, well, good old fashioned deficit spending. The only new oil money that shows up in this budget is the relatively small amounts from the first two years of the deal. We haven't seen the money flying yet from the rest of the new $2.0 billion federal transfer.
1. Record increase in direct debt. Loyola Sullivan - the man who supposedly hates deficits - added more to the direct debt in one year than any other finance minister in the province's history. Over the last years of the Tobin and Grimes administrations, the province's direct debt (the amount owed directly by the provincial government) declined annually. Yes, that's right. It declined, as in went down, lessened, was reduced, got smaller, shrank.
This year alone it climbed by 10% from $6.087 billion to $6.743 billion.
There is no obvious explanation, although it is possible this may be related to government contributions to deal with the unfunded liability for some public sector pensions. If it is, then consider this an Emily Litella moment.
Loyola needs to give an answer for that one; I suspect most reporters in the budget lock-up missed it.
2. Mysterious Government focus on "cash" accounting. While in Opposition, the Progressive Conservative Party criticized government for reporting budget information on a cash basis. They claimed this hid the significant deficit in the annual budget, especially for capital spending.
The Blue Book election platform pledged to balance the current and capital account budgets by 2007-2008.
For the last two budgets, Loyola Sullivan has consistently focused on the "cash" surplus or deficit. The confusion between last year's pledge to balance the books on a "cash" basis and the Blue Book commitment is just one of the problems with Loyola's conversion to the traditional way of spinning the budget.
The other problem is that by mixing "cash" and "accrual" reporting, Loyola gets to spread some whopping great falsehoods, like the one about the Liberals causing these record high deficits. The "cash" deficit Loyola faced last year is actually less than the ones faced in the early 1990s. Loyola's "cash deficits" are actually fictional ones created by his spinning the budget numbers, rather than by an accurate reporting of the government accounts.
3. Danny loves deficits or I have money and I'm not afraid to spend it. There is a lot of small cash being spent in this budget, but there have been some other expenditures that are, well, shall we say curious.
For example, and for some currently unexplained reason, the provincial government had so much cash on hand this year that it actually spent $117 million to pay off the entire cost of building The Rooms and something called the Education Investment Corporation. If they hadn't done that, the government would have posted at least a $103 million surplus on current account instead of the $14 million deficit they are reporting on a "cash" basis.
Government predicts it will continue to run deficits on an accrual basis, as noted in a couple of posts here on Loyola's prediction the total debt load will hit $17 billion before the Tories are finished. Government is also planning run some "cash" deficits over the next couple of years even though the government books were actually in surplus this year and likely will be in surplus next year as well.
Check out the budget speech where Loyola forecasts a "cash" deficit next year of $62 million. If he carried forward his surplus from this year - even if he paid off The Rooms alone - Loyola could have had a surplus this year and balanced the books next year, thereby achieving his pledge in a single year. That doesn't even take into account his lowballing of oil revenues.
Forget the "cash" nonsense. This government plans to keep overspending by record amounts for their entire first term and beyond if re-elected despite their Blue Book commitments to tackle the debt and deficit.
Colour me disappointed.
4. Last year's budget was a crock. It looks to me like the provincial government undertook a lot of spending in the last little while to save the embarrassment of showing that their first budget was just completely out-to-lunch when it came to reporting revenues.
The provincial government was never in the financial mess Loyola and Danny claimed.
It wasn't even close.
Thank heavens these guys weren't around when things were really bad.
Like say, 1992.
5. You read it here first! In yet another example of shameless self-promotion, I have to draw attention to yet another accurate prediction from the Bond Papers. In previous posts, I predicted that offshore revenues plus offsets from the Real Atlantic Accord would be over $300 million in FY 2004 and would likely top $400 million.
Guess what?
I was dead on.
Combined royalties plus offsets last year was officially $363, 762, 000 according to Budget 2005. Add to it the other revenues the province collects under the Real Atlantic Accord and you can see we were way over $400 million. [Guesstimate the other revenues at about $ 100 million.]
But that's not all.
6. Pull the other one, Loyola. Despite having a nice chart in his budget speech that forecasts continued high oil production and continued high oil prices, Loyola Sullivan forecasts that his oil royalties will actually drop next year. Pardon me, Mr. Sullivan?
Offshore royalties, Budget 2004: $136, 970, 000
Offshore royalties, Actual 2004: $234, 420, 000
Offshore royalties, Budget 2005: $215, 370, 000
Expect next year's revenues to be at least the same as this year since everyone predicts continued high oil prices. In fact, some forecasts suggest that oil prices will be higher in future, but certainly not below US$40 per barrel. Government forecasts are apparently lowballed, using US$38 per barrel for next year and US$32 per barrel for 2006.
7. 100% is 100%. or is it? As a last point, I'll leave you with this little poser.
During the Great Crusade for the Atlantic Accord, Danny Williams eventually got around to insisting on offsetting 100% of provincial offshore revenues.
He claims he got that.
Well, let me put it this way:
Offshore royalties - not revenues - this fiscal year were around $234 million. The existing Accord offsets plus the amount agreed upon by Williams add up to $263 million. That would mean other revenues like corporate taxes added up to only $29 million.
Hmmm.
Something isn't right there, and based on what has been happening all along with government's reporting of its oil revenues, I don't think the problem is here at the Bond Papers.
Of course, the combined amount is still $500 million, slightly more than the accrual deficit this year!
But I digress.
It makes for some interesting reading and I'll have more in the days ahead.
Here are a couple of interesting little things that I noticed, some of which will sound awfully familiar to those who read this blog faithfully.
One thing to make clear up front. Forget any spin that you are hearing about all this new spending being due to the new oil deal. That's a crock of the highest order. All the new spending is due to a combination of direct provincial revenues that have no connection whatsoever to the new oil deal, new federal money for health care and, well, good old fashioned deficit spending. The only new oil money that shows up in this budget is the relatively small amounts from the first two years of the deal. We haven't seen the money flying yet from the rest of the new $2.0 billion federal transfer.
1. Record increase in direct debt. Loyola Sullivan - the man who supposedly hates deficits - added more to the direct debt in one year than any other finance minister in the province's history. Over the last years of the Tobin and Grimes administrations, the province's direct debt (the amount owed directly by the provincial government) declined annually. Yes, that's right. It declined, as in went down, lessened, was reduced, got smaller, shrank.
This year alone it climbed by 10% from $6.087 billion to $6.743 billion.
There is no obvious explanation, although it is possible this may be related to government contributions to deal with the unfunded liability for some public sector pensions. If it is, then consider this an Emily Litella moment.
Loyola needs to give an answer for that one; I suspect most reporters in the budget lock-up missed it.
2. Mysterious Government focus on "cash" accounting. While in Opposition, the Progressive Conservative Party criticized government for reporting budget information on a cash basis. They claimed this hid the significant deficit in the annual budget, especially for capital spending.
The Blue Book election platform pledged to balance the current and capital account budgets by 2007-2008.
For the last two budgets, Loyola Sullivan has consistently focused on the "cash" surplus or deficit. The confusion between last year's pledge to balance the books on a "cash" basis and the Blue Book commitment is just one of the problems with Loyola's conversion to the traditional way of spinning the budget.
The other problem is that by mixing "cash" and "accrual" reporting, Loyola gets to spread some whopping great falsehoods, like the one about the Liberals causing these record high deficits. The "cash" deficit Loyola faced last year is actually less than the ones faced in the early 1990s. Loyola's "cash deficits" are actually fictional ones created by his spinning the budget numbers, rather than by an accurate reporting of the government accounts.
3. Danny loves deficits or I have money and I'm not afraid to spend it. There is a lot of small cash being spent in this budget, but there have been some other expenditures that are, well, shall we say curious.
For example, and for some currently unexplained reason, the provincial government had so much cash on hand this year that it actually spent $117 million to pay off the entire cost of building The Rooms and something called the Education Investment Corporation. If they hadn't done that, the government would have posted at least a $103 million surplus on current account instead of the $14 million deficit they are reporting on a "cash" basis.
Government predicts it will continue to run deficits on an accrual basis, as noted in a couple of posts here on Loyola's prediction the total debt load will hit $17 billion before the Tories are finished. Government is also planning run some "cash" deficits over the next couple of years even though the government books were actually in surplus this year and likely will be in surplus next year as well.
Check out the budget speech where Loyola forecasts a "cash" deficit next year of $62 million. If he carried forward his surplus from this year - even if he paid off The Rooms alone - Loyola could have had a surplus this year and balanced the books next year, thereby achieving his pledge in a single year. That doesn't even take into account his lowballing of oil revenues.
Forget the "cash" nonsense. This government plans to keep overspending by record amounts for their entire first term and beyond if re-elected despite their Blue Book commitments to tackle the debt and deficit.
Colour me disappointed.
4. Last year's budget was a crock. It looks to me like the provincial government undertook a lot of spending in the last little while to save the embarrassment of showing that their first budget was just completely out-to-lunch when it came to reporting revenues.
The provincial government was never in the financial mess Loyola and Danny claimed.
It wasn't even close.
Thank heavens these guys weren't around when things were really bad.
Like say, 1992.
5. You read it here first! In yet another example of shameless self-promotion, I have to draw attention to yet another accurate prediction from the Bond Papers. In previous posts, I predicted that offshore revenues plus offsets from the Real Atlantic Accord would be over $300 million in FY 2004 and would likely top $400 million.
Guess what?
I was dead on.
Combined royalties plus offsets last year was officially $363, 762, 000 according to Budget 2005. Add to it the other revenues the province collects under the Real Atlantic Accord and you can see we were way over $400 million. [Guesstimate the other revenues at about $ 100 million.]
But that's not all.
6. Pull the other one, Loyola. Despite having a nice chart in his budget speech that forecasts continued high oil production and continued high oil prices, Loyola Sullivan forecasts that his oil royalties will actually drop next year. Pardon me, Mr. Sullivan?
Offshore royalties, Budget 2004: $136, 970, 000
Offshore royalties, Actual 2004: $234, 420, 000
Offshore royalties, Budget 2005: $215, 370, 000
Expect next year's revenues to be at least the same as this year since everyone predicts continued high oil prices. In fact, some forecasts suggest that oil prices will be higher in future, but certainly not below US$40 per barrel. Government forecasts are apparently lowballed, using US$38 per barrel for next year and US$32 per barrel for 2006.
7. 100% is 100%. or is it? As a last point, I'll leave you with this little poser.
During the Great Crusade for the Atlantic Accord, Danny Williams eventually got around to insisting on offsetting 100% of provincial offshore revenues.
He claims he got that.
Well, let me put it this way:
Offshore royalties - not revenues - this fiscal year were around $234 million. The existing Accord offsets plus the amount agreed upon by Williams add up to $263 million. That would mean other revenues like corporate taxes added up to only $29 million.
Hmmm.
Something isn't right there, and based on what has been happening all along with government's reporting of its oil revenues, I don't think the problem is here at the Bond Papers.
Of course, the combined amount is still $500 million, slightly more than the accrual deficit this year!
But I digress.
20 March 2005
The Enduring Challenge of Change
Far from being a new approach to regional economic development in Newfoundland and Labrador, Kathy Dunderdale's announcement of new funding on Friday, March 18, 2005 continued the program contained in the 1992 Strategic Economic Plan (SEP), as modified by the Tobin and Grimes administrations up to 2003.
The SEP was a genuinely strategic document. It contained specific action items for each of the departments with economic responsibilities, including fisheries, tourism and environment. The SEP reorganized the old development department into a new department called Industry, Trade and Technology and focused attention away from resource exploitation and onto non-resource-based enterprises. This stood in sharp contrast to the Peckford administration's heavy emphasis on oil and gas and related spin-off manufacturing like petrochemical plants, a theme that re-appeared almost 20 years later as Chapter 2 of the Williams campaign Blue Book.
More importantly, though, the SEP document contained a broad philosophy that underpinned government's subsequent approach. In future, government's role would be one of creating an overall environment in which individual private-sector entrepreneurship would be the engine powering economic growth. The SEP highlighted the needed for improved productivity throughout the economy and on being competitive globally based on local strengths. It spoke of the need for innovation and on an educational system that fostered individual entrepreneurship and adaptability.
The SEP also called for the creation of economic zones, originally 15 and later expanded to 20 with political agitation from the old rural development movement. The zones would serve two major purposes. For government, the zones gave a basic planning framework so that the provincial government could ensure that each area had the necessary infrastructure to support the second purpose: economic initiatives based on regional plans developed by local boards.
Through the zones, the Economic Recovery Commission (ERC) and Enterprise Newfoundland and Labrador (ENL), government's approach to economic development would be decentralized and placed in the hands of local representatives. Overall, the goal was to ensure that there was economic activity within each zone such that one could live in one community and find lasting employment within easy driving distance. That phrase found its way in one form or another into all sorts of government documents, public comments and news releases.
The new Tobin administration abolished the ERC. It absorbed ENL and its five regional offices into the development department, which was itself renamed several times. Eventually a business investment corporation was started, a pale shadow of ENL, and new investment programs were created to give financial aid to qualifying businesses.
The investment corporation has been retained under the newly announced plan and the funding programs created under Tobin and Grimes after the death of ENL have been sweetened with new cash by the Williams administration. The names may have changed but the fundamental concepts remain the same.
The number of boards has apparently also been reduced from the current 20 to nine. This change appears to owe much to an inverse of the logic of Spinal Tap's amplifiers. "We have made progress; there are now nine boards" as one may well expect to see in a government media talking point on the Dunderdale announcement. The number of boards is less important, though. The goal of the nine new boards is identical in every respect to the original zone boards created under the Wells administrations SEP. [ Challenge and Change: a strategic economic plan for Newfoundland and Labrador, (St. John's: Government of Newfoundland and Labrador, 1992), pp. 16-18. Sadly this is not available online.)
In the new budget expected on Monday, other initiatives may also reappear from the 1990s, including some ideas generated by Dunderdale's deputy minister Doug House but rejected by the Wells administration. The Royal Commission on Employment and Unemployment, chaired by House, had recommended and the ERC subsequently endorsed the idea of series of investment schemes such as the Newfoundland and Labrador Stock Savings Plan, the Venture Capital Tax Credit Program, and the Newfoundland and Labrador Development Savings Bonds.
There are some differences in the New Approach and these may prove telling for overall government policy in the future.
First, the New Approach does not contain a simple set of objectives, as the SEP did to guide overall economic development. There are no simple set of guiding statements that cabinet may use when tackling issues such as the future direction of the fishery. Old ideas which run counter to a commitment to innovation and productivity can take hold. As a result, government policy may well support holding people in stagnant jobs, dependent on some form of income supplement like Employment Insurance because it is politically expedient rather than economically sound.
As well, government may begin to reassert itself into the actual business of economic development thereby replacing the private sector as the engine of growth. Before 1989, government was often seen as the economic engine of the province. Emphasis was placed on government jobs. Government itself invested in industries or provided loan guarantees. Under Wells this was replaced by the SEP philosophy. But in time, the Tobin administration restored government's misplaced role with his decentralization program. The Williams Blue Book talks of using procurement as a means of generating economic activity. it advocates changing procurement decisions from a basis on quality and cost to one of net economic benefit. May we see pencils made in Labrador at 50 cents each because of the job creation involved, rather than buying imported pencils at a nickel each?
Or, in a related way, calls have been made recently for greater government spending generally, both federal and provincial, on public sector jobs with no other benefit than giving everyone a piece of the action. Bella Oxmix would be pleased.
Second, in a structural sense, government is no longer served by a fundamental competition of ideas between established interests and a new vanguard. Doug House railed bitterly against many things in his memoir Against the tide, not least of which was what he called "The Old Guard". These were senior public officials who held their positions under the Peckford administration and who continued to do so under Wells and later Tobin and Grimes.
House's Old Guard could be better described as government officials used to operating within established bureaucratic organizations and patterns. The names may well have changed in the intervening decade but the fundamental approaches of government bureaucracy - hierarchical decision-making, "process" versus outcome - are all retained.
What House missed in his memoir was the value of the competition of the ERC and the "Old Guard" in generating ideas for cabinet. Government is about choices but too often established orthodoxy limits the range of choice. Under Doug House, the ERC embodied the core values of the Strategic Economic Plan. Yet none of its ideas was allowed to emerge as policy without being rigorously tested by a critique from House's nemesis. Cabinet benefited from this process since half-formed ideas could be made whole through the very act of advocating an idea. House disliked advocacy, prefering to simply impose the idea but there is no question of the value of rigorous examination and debate in developing an idea into government action. Out of the dialectics of the approach, policies and programs could emerge which were more likely to stand up to the trials of actual experience. There was little chance of some folly surviving or of some minister or other latching onto a hare-brained scheme that met short-political needs but which was scatter-brained in any other sense.
Unfortunately, the Williams administration has put House into a line department thereby perpetuating the monolithic process of the Tobin administration. House has become, after a fashion, part of the very bureaucracy he once derided. But in a larger sense, House and his associates have become the new Orthodoxy, the new "Old Guard", at least within his department. They will face no meaningful test of what they propose before it is government policy. Much worse, though, House and company cannot define themselves as being different from the bureaucracy when they are now an integral part of it. House may have what he always wanted - namely the power to impose a concept - but he has earned it by essentially becoming what he derided in Against the tide. How many of those he lambasted in its pages have spent the last year chuckling in their retirement beer? In time, Doug House may not serve the province as well in his new role as he did in seven years as ERC chair.
Third, there is no ENL. While it grew out of the Peckford era development corporation, ENL in the early 1990s was a model of practical business advice. It pioneered the use of computer networks to deliver support in communities across the province. It partnered with federal agencies and created positive relationships with all sectors of the economy and society. More importantly, though, ENL provided local groups with direct access to solid information. Contrast that to the post 1996 approach which brought greater power into the hands of St. John's bureaucrats and encouraged in the zone boards - now called Red Boards - a focus on seeking government hand-outs instead of actually fostering sustainable development.
Tobin's business corporation, perpetuated by Williams, is a rump with little real ability within its ranks to do what ENL used to do. After 1996, economic initiative died in Newfoundland and Labrador, assimilated neatly under the control of bureacurats. The words, the appearances survived but underneath the exterior trappings bureaucratic nanoprobes stifled the creativity and effectiveness of the old ERC and ENL staffers. There is no small irony that Roger Grimes has criticized the ERC, falsely, for dictating to rural Newfoundland and Labrador, yet the system that emerged after 1996 with his support did exactly that.
House himself may well see the shortcomings of the modern structures; he criticized them very accurately in his memoir. Yet now he is trapped within that framework. There is little effective co-ordination between Ottawa and St. John's, for example, and in the fall-out from the Premier's Great Crusade, the federal government is unwilling to entertain much in the way of co-operation with the flag stompers.
As an integral part of the bureaucracy, beholden entirely to Williams for his place, House is unlikely to set about building contacts within the federal system that would work despite political disagreements. House was able to do it before, under Wells, but now he cannot go against his master. There is no one who occupies the same role Doug House once occupied to build much-needed bridges to the mainland. There is no Doug House, but more importantly there is no place for such a person to work.
Fourth, what we actually have here in the DUnderdale announcement is less of the substance of the Wells era SEP and more that of Tobin and Grimes. The Blue Book, for example, copies almost word for word the SEP as its first chapter. Yet, in its second chapter, with the emphasis on petrochemical plants and hydroelectrical development and mineral processing we see the same theme of heavy industry and primary resource extraction common to Tobin and Peckford.
We see exactly what Doug House characterized as the ideas of the "Old Guard" (p.79):
"With respect to economic development, the Old Guard, who are of the same age cohort, espouse ideas that were conventional when they did their undergraduate degrees. Their views combine the urbanization/industrialization approach of the Smallwood era with the resource management approach of the Peckford years. In the main, they believe that industrial, resource-related megaprojects in oil and gas, hydroelectricity, and minerals constitute the province's best hope for the future. ... They also believe in a federal presence in Newfoundland and Labrador that would reflect this megaproject philosophy through such things as large penitentiaries and defence bases. [or we might now add agricultural stations, weather forecasting or giant underwater tunnels]".
To be fair, the current administration has not displayed overt skepticism of small and medium-sized enterprises, as House describes the Old Guard view. In fact, House's approach aims at them. But this announcement on Friday was soft. There was no sign of the Premier, confirming that he has no personal interest in the regional diversification initiatives contained in whatever Dunderdale unveiled. The Premier may be earnestly occupied with something else, or taking a vacation but were he genuinely interested, he would have scheduled the announcement for a time when he was available. He campaigned on jobs and business development. He is said to want to focus on that now that he has shuffled some responsibilities off his plate. Yet, where was he on Friday past?
The New Approach is slowly revealing itself to be very familiar. The essential strengths of the Wells administration's economic policy have been affirmed by the very fact that a decade and more after they were put in place, they remain as government policy. Danny Williams trumpets his success to an audience at the Empire Club of Toronto. His landmark economic policy: the "EDGE" program established under Clyde Wells.
Yet for all the strengths of the various programs that made up the policy, its current incarnation contains the same fundamental weaknesses that grew up under the Tobin and Grimes administrations. Only some have been touched on here, but the ones noted point to lingering challenges in economic development.
One is getting politicians out of the business of job creation. Recall, if you will, that Danny Williams stood for election on a platform of creating jobs, not fostering the climate for job creation. Danny Williams, entrepreneur, entered government in order to create employment. Only in Newfoundland and Labrador is this not considered a bizarre idea.
The other challenge is to increase emphasis on anything but government and government- subsidized industrial activity.
Those two are aspects of a fundamental tenet of the SEP: the private sector is the engine of economic growth. They reflect more than a half century of failed efforts up the notorious Sprung greenhouse. They come from two and a half years of consultation with the private sector that led to the SEP, yet for all that, they remain something from the SEP politicians refuse to accept.
They remain the enduring challenge to be overcome before meaningful change can take hold.
The SEP was a genuinely strategic document. It contained specific action items for each of the departments with economic responsibilities, including fisheries, tourism and environment. The SEP reorganized the old development department into a new department called Industry, Trade and Technology and focused attention away from resource exploitation and onto non-resource-based enterprises. This stood in sharp contrast to the Peckford administration's heavy emphasis on oil and gas and related spin-off manufacturing like petrochemical plants, a theme that re-appeared almost 20 years later as Chapter 2 of the Williams campaign Blue Book.
More importantly, though, the SEP document contained a broad philosophy that underpinned government's subsequent approach. In future, government's role would be one of creating an overall environment in which individual private-sector entrepreneurship would be the engine powering economic growth. The SEP highlighted the needed for improved productivity throughout the economy and on being competitive globally based on local strengths. It spoke of the need for innovation and on an educational system that fostered individual entrepreneurship and adaptability.
The SEP also called for the creation of economic zones, originally 15 and later expanded to 20 with political agitation from the old rural development movement. The zones would serve two major purposes. For government, the zones gave a basic planning framework so that the provincial government could ensure that each area had the necessary infrastructure to support the second purpose: economic initiatives based on regional plans developed by local boards.
Through the zones, the Economic Recovery Commission (ERC) and Enterprise Newfoundland and Labrador (ENL), government's approach to economic development would be decentralized and placed in the hands of local representatives. Overall, the goal was to ensure that there was economic activity within each zone such that one could live in one community and find lasting employment within easy driving distance. That phrase found its way in one form or another into all sorts of government documents, public comments and news releases.
The new Tobin administration abolished the ERC. It absorbed ENL and its five regional offices into the development department, which was itself renamed several times. Eventually a business investment corporation was started, a pale shadow of ENL, and new investment programs were created to give financial aid to qualifying businesses.
The investment corporation has been retained under the newly announced plan and the funding programs created under Tobin and Grimes after the death of ENL have been sweetened with new cash by the Williams administration. The names may have changed but the fundamental concepts remain the same.
The number of boards has apparently also been reduced from the current 20 to nine. This change appears to owe much to an inverse of the logic of Spinal Tap's amplifiers. "We have made progress; there are now nine boards" as one may well expect to see in a government media talking point on the Dunderdale announcement. The number of boards is less important, though. The goal of the nine new boards is identical in every respect to the original zone boards created under the Wells administrations SEP. [ Challenge and Change: a strategic economic plan for Newfoundland and Labrador, (St. John's: Government of Newfoundland and Labrador, 1992), pp. 16-18. Sadly this is not available online.)
In the new budget expected on Monday, other initiatives may also reappear from the 1990s, including some ideas generated by Dunderdale's deputy minister Doug House but rejected by the Wells administration. The Royal Commission on Employment and Unemployment, chaired by House, had recommended and the ERC subsequently endorsed the idea of series of investment schemes such as the Newfoundland and Labrador Stock Savings Plan, the Venture Capital Tax Credit Program, and the Newfoundland and Labrador Development Savings Bonds.
There are some differences in the New Approach and these may prove telling for overall government policy in the future.
First, the New Approach does not contain a simple set of objectives, as the SEP did to guide overall economic development. There are no simple set of guiding statements that cabinet may use when tackling issues such as the future direction of the fishery. Old ideas which run counter to a commitment to innovation and productivity can take hold. As a result, government policy may well support holding people in stagnant jobs, dependent on some form of income supplement like Employment Insurance because it is politically expedient rather than economically sound.
As well, government may begin to reassert itself into the actual business of economic development thereby replacing the private sector as the engine of growth. Before 1989, government was often seen as the economic engine of the province. Emphasis was placed on government jobs. Government itself invested in industries or provided loan guarantees. Under Wells this was replaced by the SEP philosophy. But in time, the Tobin administration restored government's misplaced role with his decentralization program. The Williams Blue Book talks of using procurement as a means of generating economic activity. it advocates changing procurement decisions from a basis on quality and cost to one of net economic benefit. May we see pencils made in Labrador at 50 cents each because of the job creation involved, rather than buying imported pencils at a nickel each?
Or, in a related way, calls have been made recently for greater government spending generally, both federal and provincial, on public sector jobs with no other benefit than giving everyone a piece of the action. Bella Oxmix would be pleased.
Second, in a structural sense, government is no longer served by a fundamental competition of ideas between established interests and a new vanguard. Doug House railed bitterly against many things in his memoir Against the tide, not least of which was what he called "The Old Guard". These were senior public officials who held their positions under the Peckford administration and who continued to do so under Wells and later Tobin and Grimes.
House's Old Guard could be better described as government officials used to operating within established bureaucratic organizations and patterns. The names may well have changed in the intervening decade but the fundamental approaches of government bureaucracy - hierarchical decision-making, "process" versus outcome - are all retained.
What House missed in his memoir was the value of the competition of the ERC and the "Old Guard" in generating ideas for cabinet. Government is about choices but too often established orthodoxy limits the range of choice. Under Doug House, the ERC embodied the core values of the Strategic Economic Plan. Yet none of its ideas was allowed to emerge as policy without being rigorously tested by a critique from House's nemesis. Cabinet benefited from this process since half-formed ideas could be made whole through the very act of advocating an idea. House disliked advocacy, prefering to simply impose the idea but there is no question of the value of rigorous examination and debate in developing an idea into government action. Out of the dialectics of the approach, policies and programs could emerge which were more likely to stand up to the trials of actual experience. There was little chance of some folly surviving or of some minister or other latching onto a hare-brained scheme that met short-political needs but which was scatter-brained in any other sense.
Unfortunately, the Williams administration has put House into a line department thereby perpetuating the monolithic process of the Tobin administration. House has become, after a fashion, part of the very bureaucracy he once derided. But in a larger sense, House and his associates have become the new Orthodoxy, the new "Old Guard", at least within his department. They will face no meaningful test of what they propose before it is government policy. Much worse, though, House and company cannot define themselves as being different from the bureaucracy when they are now an integral part of it. House may have what he always wanted - namely the power to impose a concept - but he has earned it by essentially becoming what he derided in Against the tide. How many of those he lambasted in its pages have spent the last year chuckling in their retirement beer? In time, Doug House may not serve the province as well in his new role as he did in seven years as ERC chair.
Third, there is no ENL. While it grew out of the Peckford era development corporation, ENL in the early 1990s was a model of practical business advice. It pioneered the use of computer networks to deliver support in communities across the province. It partnered with federal agencies and created positive relationships with all sectors of the economy and society. More importantly, though, ENL provided local groups with direct access to solid information. Contrast that to the post 1996 approach which brought greater power into the hands of St. John's bureaucrats and encouraged in the zone boards - now called Red Boards - a focus on seeking government hand-outs instead of actually fostering sustainable development.
Tobin's business corporation, perpetuated by Williams, is a rump with little real ability within its ranks to do what ENL used to do. After 1996, economic initiative died in Newfoundland and Labrador, assimilated neatly under the control of bureacurats. The words, the appearances survived but underneath the exterior trappings bureaucratic nanoprobes stifled the creativity and effectiveness of the old ERC and ENL staffers. There is no small irony that Roger Grimes has criticized the ERC, falsely, for dictating to rural Newfoundland and Labrador, yet the system that emerged after 1996 with his support did exactly that.
House himself may well see the shortcomings of the modern structures; he criticized them very accurately in his memoir. Yet now he is trapped within that framework. There is little effective co-ordination between Ottawa and St. John's, for example, and in the fall-out from the Premier's Great Crusade, the federal government is unwilling to entertain much in the way of co-operation with the flag stompers.
As an integral part of the bureaucracy, beholden entirely to Williams for his place, House is unlikely to set about building contacts within the federal system that would work despite political disagreements. House was able to do it before, under Wells, but now he cannot go against his master. There is no one who occupies the same role Doug House once occupied to build much-needed bridges to the mainland. There is no Doug House, but more importantly there is no place for such a person to work.
Fourth, what we actually have here in the DUnderdale announcement is less of the substance of the Wells era SEP and more that of Tobin and Grimes. The Blue Book, for example, copies almost word for word the SEP as its first chapter. Yet, in its second chapter, with the emphasis on petrochemical plants and hydroelectrical development and mineral processing we see the same theme of heavy industry and primary resource extraction common to Tobin and Peckford.
We see exactly what Doug House characterized as the ideas of the "Old Guard" (p.79):
"With respect to economic development, the Old Guard, who are of the same age cohort, espouse ideas that were conventional when they did their undergraduate degrees. Their views combine the urbanization/industrialization approach of the Smallwood era with the resource management approach of the Peckford years. In the main, they believe that industrial, resource-related megaprojects in oil and gas, hydroelectricity, and minerals constitute the province's best hope for the future. ... They also believe in a federal presence in Newfoundland and Labrador that would reflect this megaproject philosophy through such things as large penitentiaries and defence bases. [or we might now add agricultural stations, weather forecasting or giant underwater tunnels]".
To be fair, the current administration has not displayed overt skepticism of small and medium-sized enterprises, as House describes the Old Guard view. In fact, House's approach aims at them. But this announcement on Friday was soft. There was no sign of the Premier, confirming that he has no personal interest in the regional diversification initiatives contained in whatever Dunderdale unveiled. The Premier may be earnestly occupied with something else, or taking a vacation but were he genuinely interested, he would have scheduled the announcement for a time when he was available. He campaigned on jobs and business development. He is said to want to focus on that now that he has shuffled some responsibilities off his plate. Yet, where was he on Friday past?
The New Approach is slowly revealing itself to be very familiar. The essential strengths of the Wells administration's economic policy have been affirmed by the very fact that a decade and more after they were put in place, they remain as government policy. Danny Williams trumpets his success to an audience at the Empire Club of Toronto. His landmark economic policy: the "EDGE" program established under Clyde Wells.
Yet for all the strengths of the various programs that made up the policy, its current incarnation contains the same fundamental weaknesses that grew up under the Tobin and Grimes administrations. Only some have been touched on here, but the ones noted point to lingering challenges in economic development.
One is getting politicians out of the business of job creation. Recall, if you will, that Danny Williams stood for election on a platform of creating jobs, not fostering the climate for job creation. Danny Williams, entrepreneur, entered government in order to create employment. Only in Newfoundland and Labrador is this not considered a bizarre idea.
The other challenge is to increase emphasis on anything but government and government- subsidized industrial activity.
Those two are aspects of a fundamental tenet of the SEP: the private sector is the engine of economic growth. They reflect more than a half century of failed efforts up the notorious Sprung greenhouse. They come from two and a half years of consultation with the private sector that led to the SEP, yet for all that, they remain something from the SEP politicians refuse to accept.
They remain the enduring challenge to be overcome before meaningful change can take hold.
18 March 2005
Clyde Wells' SEP is New Approach to economic development: Dunderdale
St. John's. 18 March 2005
The Progressive Conservative Government of Newfoundland and Labrador today announced a revised version of the Strategic Economic Plan (SEP) developed under the Liberal administration of Clyde Wells in 1992 as the Williams administration's core economic development policy.
Innovation Trade and Rural Development minister Kathy Dunderdale released the revised Liberal platform plank in a news conference at Confederation Building.
Dunderdale's deputy minister, Doug House, was head of the Economic Recovery Commission under Wells.
The SEP has formed the basis of government economic policy since 1992 and was included, in its entirety, in the PC election platform in 2003.
-30-
I just saw the government release, linked above and chuckled all through my lunch before I wrote the little bit you see before the "-30-".
Over the weekend, I'll dig out my old SEP documents and other stuff the ERC pumped out in concert with Enterprise Newfoundland and Labrador. Some of the phrases in the Dunderdale release are almost verbatim copies of stuff written in 1992. A comparison is in order, as well as a comment on the challenges of changing attitudes toward regional economic development in the province.
Oh yeah, don't miss the emphasis in the new document on a form of regional government but it appears to be a provincial government administrative concept rather than the creation of local government around the province.
That will lead to another post or two, I am sure.
The Progressive Conservative Government of Newfoundland and Labrador today announced a revised version of the Strategic Economic Plan (SEP) developed under the Liberal administration of Clyde Wells in 1992 as the Williams administration's core economic development policy.
Innovation Trade and Rural Development minister Kathy Dunderdale released the revised Liberal platform plank in a news conference at Confederation Building.
Dunderdale's deputy minister, Doug House, was head of the Economic Recovery Commission under Wells.
The SEP has formed the basis of government economic policy since 1992 and was included, in its entirety, in the PC election platform in 2003.
-30-
I just saw the government release, linked above and chuckled all through my lunch before I wrote the little bit you see before the "-30-".
Over the weekend, I'll dig out my old SEP documents and other stuff the ERC pumped out in concert with Enterprise Newfoundland and Labrador. Some of the phrases in the Dunderdale release are almost verbatim copies of stuff written in 1992. A comparison is in order, as well as a comment on the challenges of changing attitudes toward regional economic development in the province.
Oh yeah, don't miss the emphasis in the new document on a form of regional government but it appears to be a provincial government administrative concept rather than the creation of local government around the province.
That will lead to another post or two, I am sure.
More Anal than Anal is our motto, Mr. Deckard.
Try this link about selling a house in Switzerland.
Sounds like being in the army.
Reminds me of a buddy of mine on his basic training course. Recruits were required to share a room with one other recruit and they had to have all the room, closets and drawers laid out according to a standard pattern and matching each other. Everything had to be neat, pressed polished and almost sterilized for cleanliness. It all had to be - The Same.
They had the privilege of one drawer which was theirs to do with as they saw fit; it wouldn't be inspected.
Morning inspection after breakfast.
Directing staff otherwise known as DS (two master corporals) enter and begin the hunt for flaws.
They hunt.
and hunt.
They find nothing.
The boys had been up all freaking night working to outfox the DS.
DS go over the place with a fine tooth comb for the better part of 15 minutes. (Usually 30 secs is enough to find one hair on a shirt or one lousy crease in pants as part of the game.)
By this time thoroughly pissed off, the DS pull open the personal drawers looking for anything like contraband porn.
Staring back at them are two identical drawers, laid out neatly and in accordance with a pattern the boys had worked out for themselves. Everything matched, right down to diameter of the socks rolled up. Same toothpaste. Same shave cream.
No contraband.
Nada
It was perfect.
The DS just stared at the boys, standing rigidly at attention and immaculately turned out.
They quietly walked out to the next room which they turned upside down in the space of a few seconds.
The boys s*** themselves laughing.
Sounds like being in the army.
Reminds me of a buddy of mine on his basic training course. Recruits were required to share a room with one other recruit and they had to have all the room, closets and drawers laid out according to a standard pattern and matching each other. Everything had to be neat, pressed polished and almost sterilized for cleanliness. It all had to be - The Same.
They had the privilege of one drawer which was theirs to do with as they saw fit; it wouldn't be inspected.
Morning inspection after breakfast.
Directing staff otherwise known as DS (two master corporals) enter and begin the hunt for flaws.
They hunt.
and hunt.
They find nothing.
The boys had been up all freaking night working to outfox the DS.
DS go over the place with a fine tooth comb for the better part of 15 minutes. (Usually 30 secs is enough to find one hair on a shirt or one lousy crease in pants as part of the game.)
By this time thoroughly pissed off, the DS pull open the personal drawers looking for anything like contraband porn.
Staring back at them are two identical drawers, laid out neatly and in accordance with a pattern the boys had worked out for themselves. Everything matched, right down to diameter of the socks rolled up. Same toothpaste. Same shave cream.
No contraband.
Nada
It was perfect.
The DS just stared at the boys, standing rigidly at attention and immaculately turned out.
They quietly walked out to the next room which they turned upside down in the space of a few seconds.
The boys s*** themselves laughing.
Indy reads Bond
Just a note for the sake of curiosity:
For the first time since I started keeping track of this blog's hits (the audience), there was a clearly identified hit from The Independent. [For those concerned with privacy, I can only see which internet service provider provider visited and what they visited. That helps me see what pieces are popular and which ones are generating any interest. It doesn't change where I go, but it does tell me what is resonating with or, for that matter, annoying people.
They've known about Robert Bond Papers for some time, probably since the first week I started it.
But this week someone obviously started paying attention;
More than five hours of attention going through what seems to be just about every post made.
Hmmmm.
Wonder what it means when someone at the Indy spends almost an entire workday reading my blog?
For the first time since I started keeping track of this blog's hits (the audience), there was a clearly identified hit from The Independent. [For those concerned with privacy, I can only see which internet service provider provider visited and what they visited. That helps me see what pieces are popular and which ones are generating any interest. It doesn't change where I go, but it does tell me what is resonating with or, for that matter, annoying people.
They've known about Robert Bond Papers for some time, probably since the first week I started it.
But this week someone obviously started paying attention;
More than five hours of attention going through what seems to be just about every post made.
Hmmmm.
Wonder what it means when someone at the Indy spends almost an entire workday reading my blog?
The Leader Opps
Strange things happen on the flight to and from Labrador.
That's where I was yesterday and on both the flight to Goose and the one back I couldn't help but think about Craig Westcott's column from the Wednesday Express and the Tory cheerleading from Thursday's Post.
Craig took time to praise Roger Grime's as an effective leader of the opposition. Craig's main criterion? That Roger irks Danny. Yes, Danny turns beet red answering questions from Roger.
Craig rightly points to Roger's string of successes as a cabinet minister after 1989. He also compares Grimes to 19th century British prime minister William Gladstone. The Brit Liberal managed to serve as PM four times despite being regarded by the Queen, for example, as a bit of a bore.
The problem for me was that I finished Craig's column unconvinced that driving up your opponent's high blood pressure is a viable political strategy. It just doesn't seem practical to get back to power by inducing a stroke in The Other Guy(s) ; that is, unless you can hook them on fags, force-feed em Pepsi and fee and chee and get them to spend their days on the couch watching the soaps.
Nope. I just shook my head at the idea, wondering if Craig got the idea from the CIA's nutty attempts to off Castro in the 1960s. Poisoned cigars. Beard termites. Extra starch in his fatigues to give him the itches which lead to scratching which give a real nasty, nasty infection that won't go away because the embargo won't let those commie Cubans buy American wonder ointments and powders. Setting up a radio station to broadcast the words "neener neener neener" over and over again on a frequency that can only be received by custom-made radios to be dropped by Cuban ex-patriots from American made balloons drifting across the Caribbean.
There had to be another answer to the Liberal puzzle. Why exactly are they getting slaughtered in the polls?
Leap over to Stephen Harper and you can see the similarities between the two Opposition leaders.
One of the Posties hit on the answer.
Define yourself or be defined.
Poof.
Politics is based on choices.
Political communication therefore is heavily dependent on one bunch of people pointing out the differences between themselves and The Other Bunch.
The main challenge for Roger Grimes has been defining himself and his policies in the public mind. It's a problem that goes back to his time as Premier. How is he different from Brian or Danny?
Does that mean Roger is lame? Far from it. Craig rightly points out that Grimes is one of the most experienced political leaders around. He has handled some incredibly tough political issues with amazing success. People who have known Grimes for a long time are struck by his ability to grasp an issue and dissect it, by the ease with which he can relate to CEOs or EI recipients on their own terms.
But, for some reason, Grimes as Liberal leader has come to be defined by some mistaken popular ideas or by the politically inspired characterizations of Danny Williams when he was Leader of the Opposition (Leader Opp in pol-speak). Voisey's Bay was not another give-away.
Politicians must define themselves or face the risk of being defined by others. Grimes seems to have fallen into that second option and come off much the worse for it. Grimes last showing in the CRA poll is actually very odd. The Telly this week carried results of some CRA polls done for the provincial government last fall that show the provincial government actually didn't have very high approval ratings for its performance in a bunch of areas.
These are all points where Grimes should have been picking up and holding onto stronger support.
To be fair, it is really a mistake for me to lay this solely on Roger's shoulders. Yes, as leader the buck stops on his desk, but this lack of definition seems to beset the entire caucus.
And to really make the relevant point from my post asking why there is an Opposition here at all: if you look at Nova Scotia, the Opposition Liberals are very aggressive in presenting an alternative point of view. They are keen to dig away at the government like jackals, not some small blood-sucking insect. (Craig likened Roger to a tick burrowing under Danny's fur)
Look at the Opposition Tories here before 2003 and you will see the same pattern as the Nova Scotia Libs.
Both Stephen Harper and Roger Grimes should be making better headway in their work. That they don't seems to result from some problem with defining themselves and their parties and then hammering that home with the electorate.
As I finish this off, Roger Grimes is on Open Line making strong points and demonstrating that he has a firm grasp on the details of the issue around Abitibi and its mills in the province. He is making points - good points in clear language. And yes, Craig, when the House is open, Grimes is a high flyer. There are some other star individual performers when it comes to poking at some specific issues.
Think about it this way. Computers produce pictures from things call pixels. These are individual little spots of varying colours that when you step back and look at them reveal an image. Roger Grimes and the Liberals can be really good at producing pixels and bunches of pixels (specific issues and details) especially when the House is open, but when you step back, the picture doesn't have a coherent definition. It doesn't last in between House sessions.
The big difference between Harper and Grimes is that Roger Grimes does not have to deal with the fundamental differences of opinion and values within the party that beset the federal Conservatives.
If Roger was doing such a totally bad job as Leader Opp, the knives would already be out. He has the time and the room to define himself and his party and run a strong campaign in the next election.
He just has to do it.
That's where I was yesterday and on both the flight to Goose and the one back I couldn't help but think about Craig Westcott's column from the Wednesday Express and the Tory cheerleading from Thursday's Post.
Craig took time to praise Roger Grime's as an effective leader of the opposition. Craig's main criterion? That Roger irks Danny. Yes, Danny turns beet red answering questions from Roger.
Craig rightly points to Roger's string of successes as a cabinet minister after 1989. He also compares Grimes to 19th century British prime minister William Gladstone. The Brit Liberal managed to serve as PM four times despite being regarded by the Queen, for example, as a bit of a bore.
The problem for me was that I finished Craig's column unconvinced that driving up your opponent's high blood pressure is a viable political strategy. It just doesn't seem practical to get back to power by inducing a stroke in The Other Guy(s) ; that is, unless you can hook them on fags, force-feed em Pepsi and fee and chee and get them to spend their days on the couch watching the soaps.
Nope. I just shook my head at the idea, wondering if Craig got the idea from the CIA's nutty attempts to off Castro in the 1960s. Poisoned cigars. Beard termites. Extra starch in his fatigues to give him the itches which lead to scratching which give a real nasty, nasty infection that won't go away because the embargo won't let those commie Cubans buy American wonder ointments and powders. Setting up a radio station to broadcast the words "neener neener neener" over and over again on a frequency that can only be received by custom-made radios to be dropped by Cuban ex-patriots from American made balloons drifting across the Caribbean.
There had to be another answer to the Liberal puzzle. Why exactly are they getting slaughtered in the polls?
Leap over to Stephen Harper and you can see the similarities between the two Opposition leaders.
One of the Posties hit on the answer.
Define yourself or be defined.
Poof.
Politics is based on choices.
Political communication therefore is heavily dependent on one bunch of people pointing out the differences between themselves and The Other Bunch.
The main challenge for Roger Grimes has been defining himself and his policies in the public mind. It's a problem that goes back to his time as Premier. How is he different from Brian or Danny?
Does that mean Roger is lame? Far from it. Craig rightly points out that Grimes is one of the most experienced political leaders around. He has handled some incredibly tough political issues with amazing success. People who have known Grimes for a long time are struck by his ability to grasp an issue and dissect it, by the ease with which he can relate to CEOs or EI recipients on their own terms.
But, for some reason, Grimes as Liberal leader has come to be defined by some mistaken popular ideas or by the politically inspired characterizations of Danny Williams when he was Leader of the Opposition (Leader Opp in pol-speak). Voisey's Bay was not another give-away.
Politicians must define themselves or face the risk of being defined by others. Grimes seems to have fallen into that second option and come off much the worse for it. Grimes last showing in the CRA poll is actually very odd. The Telly this week carried results of some CRA polls done for the provincial government last fall that show the provincial government actually didn't have very high approval ratings for its performance in a bunch of areas.
These are all points where Grimes should have been picking up and holding onto stronger support.
To be fair, it is really a mistake for me to lay this solely on Roger's shoulders. Yes, as leader the buck stops on his desk, but this lack of definition seems to beset the entire caucus.
And to really make the relevant point from my post asking why there is an Opposition here at all: if you look at Nova Scotia, the Opposition Liberals are very aggressive in presenting an alternative point of view. They are keen to dig away at the government like jackals, not some small blood-sucking insect. (Craig likened Roger to a tick burrowing under Danny's fur)
Look at the Opposition Tories here before 2003 and you will see the same pattern as the Nova Scotia Libs.
Both Stephen Harper and Roger Grimes should be making better headway in their work. That they don't seems to result from some problem with defining themselves and their parties and then hammering that home with the electorate.
As I finish this off, Roger Grimes is on Open Line making strong points and demonstrating that he has a firm grasp on the details of the issue around Abitibi and its mills in the province. He is making points - good points in clear language. And yes, Craig, when the House is open, Grimes is a high flyer. There are some other star individual performers when it comes to poking at some specific issues.
Think about it this way. Computers produce pictures from things call pixels. These are individual little spots of varying colours that when you step back and look at them reveal an image. Roger Grimes and the Liberals can be really good at producing pixels and bunches of pixels (specific issues and details) especially when the House is open, but when you step back, the picture doesn't have a coherent definition. It doesn't last in between House sessions.
The big difference between Harper and Grimes is that Roger Grimes does not have to deal with the fundamental differences of opinion and values within the party that beset the federal Conservatives.
If Roger was doing such a totally bad job as Leader Opp, the knives would already be out. He has the time and the room to define himself and his party and run a strong campaign in the next election.
He just has to do it.
Anne of Black Leathers
News today that Hell's Angels, the notorious motorcycle club is opening a retail store. The shop, called Route 81, will reportedly sell T-shirts, belt buckles and calendars.
Not sure what these calendars feature each month, but Quebec motorcycle club calendars have things like favourite sleeping bags of members doing time for homicide. How typically Canadian of them; in the U.S. their organized crime types use things like baseball bats to kill informants and enemies. In Canada, we wrap them in gear from the Canadian Tire. And drop them from a canoe into a lake in cottage country.
Some other retail possibilities for Canada's tourist mecca.
- An outlet for handicrafts by Al Queda terrorists holed up in some cave in north western Pakistan. Items for sale include lamps made from used artillery shell casings, decorative dishes made from deactivated landmines and Ossama's recently published instructional series "How to slaughter the Infidel Competitor for the profit".
Just wonder if the Angels are gonna have a license to sell brownies? PEI Public Health might just want to keep an eye on that one. Of course, a bad case of the munchies among all though tourists could cause a run on french frie sales. Hmmmm. Maybe that's the secret plot for those clever Gablers; The government has a piece of the action and Route 81 in PEI is just the first of a raft of these things to spread across the country.
Sell special brownies. Increase demand for roadside french fries. Create a shortage of the island's main product such that a bag of crinkle cuts at the supermarket rivals the price of oil.
Sharp people those spud diggers.
Not sure what these calendars feature each month, but Quebec motorcycle club calendars have things like favourite sleeping bags of members doing time for homicide. How typically Canadian of them; in the U.S. their organized crime types use things like baseball bats to kill informants and enemies. In Canada, we wrap them in gear from the Canadian Tire. And drop them from a canoe into a lake in cottage country.
Some other retail possibilities for Canada's tourist mecca.
- An outlet for handicrafts by Al Queda terrorists holed up in some cave in north western Pakistan. Items for sale include lamps made from used artillery shell casings, decorative dishes made from deactivated landmines and Ossama's recently published instructional series "How to slaughter the Infidel Competitor for the profit".
Just wonder if the Angels are gonna have a license to sell brownies? PEI Public Health might just want to keep an eye on that one. Of course, a bad case of the munchies among all though tourists could cause a run on french frie sales. Hmmmm. Maybe that's the secret plot for those clever Gablers; The government has a piece of the action and Route 81 in PEI is just the first of a raft of these things to spread across the country.
Sell special brownies. Increase demand for roadside french fries. Create a shortage of the island's main product such that a bag of crinkle cuts at the supermarket rivals the price of oil.
Sharp people those spud diggers.
16 March 2005
I knew Jack Kennedy, Jack Kennedy was a friend of mine.....
In doing a google search, I came across this John F. Kennedy quote and felt a chill in my bones.
"It is time for a new generation of leadership, to cope with new problems and new opportunities. For there is a new world to be won." [That's the JFK quote]
"The time has come for new heroes to step forward: men, women, and young people who can build their community, grow our economy, foster cooperation, and inspire the confidence we need to pursue our dreams together." [That's the Danny version from yesterday's Throne Speech]
Imitation is the sincerest form of flattery. Plagiarism is wrong. Bad paraphrasing is just pathetic.
["Short term pain for long term...; compare Crosbie's memorable line with the absolutely gruesome version of the stolen phrase some bureaucrat stuck into the January speech from last year.]
Of course, in Kennedy's case, he was riffing on the theme that he personified a change in generations among American leaders. Kennedy himself represented optimism and altruism if his and following generations.
In Danny's case, he was basically saying that it is now time for someone else to run the place.
Somebody look around on this day after the Ides of March to see which of the senators is rehearsing the lines: "Friends, Newfoundlanders and Labradorians, countrymen and women. I come not to bury Danny but to praise him..."
"It is time for a new generation of leadership, to cope with new problems and new opportunities. For there is a new world to be won." [That's the JFK quote]
"The time has come for new heroes to step forward: men, women, and young people who can build their community, grow our economy, foster cooperation, and inspire the confidence we need to pursue our dreams together." [That's the Danny version from yesterday's Throne Speech]
Imitation is the sincerest form of flattery. Plagiarism is wrong. Bad paraphrasing is just pathetic.
["Short term pain for long term...; compare Crosbie's memorable line with the absolutely gruesome version of the stolen phrase some bureaucrat stuck into the January speech from last year.]
Of course, in Kennedy's case, he was riffing on the theme that he personified a change in generations among American leaders. Kennedy himself represented optimism and altruism if his and following generations.
In Danny's case, he was basically saying that it is now time for someone else to run the place.
Somebody look around on this day after the Ides of March to see which of the senators is rehearsing the lines: "Friends, Newfoundlanders and Labradorians, countrymen and women. I come not to bury Danny but to praise him..."
An ordinary day
How appropriate that the Premier chose to include the words "An ordinary day" to a Great Big Sea song in the Throne Speech yesterday.
The speech, which the Lieutenant Governor received only a few short minutes before reading it in the House of Assembly, was a decidedly ordinary document.
The simple, nearly amateurish rhymes of the song lyrics are certainly a good parallel to the speech. And the sentiment in the song' s opening stanza is hardly revolutionary:
"I've got a smile on my face, I've got four walls around me
The sun in the sky, the water surrounds me
I'll win now but sometimes I'll lose
I've been battered, but I'll never bruise, it's not so bad."
Let us all be happy that we are alive. Take pleasure in the ordinary and remember that for every success in life there is a failure.
Oddly enough, Brian Tobin used to like throwing bits of pop culture into his speeches. I guess he felt it connected him with the ordinary people - people like you and me.
My favourite Tobinite attempt at feigning a passing acquaintance with culture was his quote from The Great Gatsby that finished with the words which said more about being stuck in the a rut of old destructive behaviour than about working to meet a future challenge.
I can't help but think that what we have in yesterday's Throne Speech is picking a piece of art because it goes with the drapes rather than because it stirs emotions appropriate to a larger theme being explored.
Off the top of my head, I can think of other song lyrics or other quotes that would have been more appropriate to yesterday's Throne Speech:
- "It's the end of the world as we know it" - actually, use just the title and the chorus since the rest of the song is a bit hard to follow. But the title sounds kinda inspirational. Yes I know it is an REM song, but Great Big Sea blessed it with a local version.
- "Stubborn Man" - Awesome song by a local traditional band about, well, a stubborn man. Seems oddly appropriate. A Fine Crowd also have another line in another song that might more accurately describe the place if our debt gets to $17.0 billion: "misery looking up poverty's arse".
Geez (he said flipping down the Fine Crowd song list.) Here's another lyric that strikes the right timbre: "I can't get nothing done, cause I'm always on the go."
- "Feel it turn" - Another Great Big Sea tune. "I had a dream I was moving forward//Floating gently to the sun//I've come to see my world rewarded//A new day has begun".
Once upon a time... (yes I know it a shop-worn phrase but it seems fitting), speeches contained lines from classical works, since most people knew them. In this less literate age, pols seem to like more ephemeral things.
Joe Smallwood once tossed out a paraphrase of a stanza from Blake's Jerusalem:
"I will not cease from mental fight,
Nor shall my sword sleep in my hand
Till we have built Jerusalem
In this green and pleasant land."
I've been known to toss biblical quotes at people, but it gets a bit dodgy depending on the audience. "If the trumpet give an uncertain sound, who shall prepare himself to the battle" is obvious for someone in communications.
Well, I have exhausted this little riff.
Anybody have other suggestions for the next speech?
The speech, which the Lieutenant Governor received only a few short minutes before reading it in the House of Assembly, was a decidedly ordinary document.
The simple, nearly amateurish rhymes of the song lyrics are certainly a good parallel to the speech. And the sentiment in the song' s opening stanza is hardly revolutionary:
"I've got a smile on my face, I've got four walls around me
The sun in the sky, the water surrounds me
I'll win now but sometimes I'll lose
I've been battered, but I'll never bruise, it's not so bad."
Let us all be happy that we are alive. Take pleasure in the ordinary and remember that for every success in life there is a failure.
Oddly enough, Brian Tobin used to like throwing bits of pop culture into his speeches. I guess he felt it connected him with the ordinary people - people like you and me.
My favourite Tobinite attempt at feigning a passing acquaintance with culture was his quote from The Great Gatsby that finished with the words which said more about being stuck in the a rut of old destructive behaviour than about working to meet a future challenge.
I can't help but think that what we have in yesterday's Throne Speech is picking a piece of art because it goes with the drapes rather than because it stirs emotions appropriate to a larger theme being explored.
Off the top of my head, I can think of other song lyrics or other quotes that would have been more appropriate to yesterday's Throne Speech:
- "It's the end of the world as we know it" - actually, use just the title and the chorus since the rest of the song is a bit hard to follow. But the title sounds kinda inspirational. Yes I know it is an REM song, but Great Big Sea blessed it with a local version.
- "Stubborn Man" - Awesome song by a local traditional band about, well, a stubborn man. Seems oddly appropriate. A Fine Crowd also have another line in another song that might more accurately describe the place if our debt gets to $17.0 billion: "misery looking up poverty's arse".
Geez (he said flipping down the Fine Crowd song list.) Here's another lyric that strikes the right timbre: "I can't get nothing done, cause I'm always on the go."
- "Feel it turn" - Another Great Big Sea tune. "I had a dream I was moving forward//Floating gently to the sun//I've come to see my world rewarded//A new day has begun".
Once upon a time... (yes I know it a shop-worn phrase but it seems fitting), speeches contained lines from classical works, since most people knew them. In this less literate age, pols seem to like more ephemeral things.
Joe Smallwood once tossed out a paraphrase of a stanza from Blake's Jerusalem:
"I will not cease from mental fight,
Nor shall my sword sleep in my hand
Till we have built Jerusalem
In this green and pleasant land."
I've been known to toss biblical quotes at people, but it gets a bit dodgy depending on the audience. "If the trumpet give an uncertain sound, who shall prepare himself to the battle" is obvious for someone in communications.
Well, I have exhausted this little riff.
Anybody have other suggestions for the next speech?
15 March 2005
Res ipsa loquitur, once more
Throne Speeches have become dull creatures in some places that follow the British parliamentary tradition. Their words are to the ears and to the heart as paste is to the tongue and the bowels.
By contrast American presidential inaugural addresses are often profound expressions of the desire, of the aspirations of not only the president but of the nation. Sentences are crisp. The words themselves are carefully woven, often through successive drafts and revisions, to create a tapestry of images that still evoke intense emotion many decades after the speech was read.
Throne Speeches can be annual inaugurals. They can renew the commitment of an administration to core themes first introduced during a general election. They can inspire. They can serve as record of accomplishment and a pledge of definitive action that will be taken in the coming year.
Would that the Premier, or any politician, could hone the skill of a simple expression of the passions that move such humble people, as all we humans are, to achieve immortal purposes.
Would that the words of Throne Speeches were knives; blades with which to carve our rough-hewn minds into a weapon that, when wielded with such strength of conviction, we could never fail but to achieve a lasting victory against the demons Circumstance and Folly that have hobbled generations.
Sadly, in place of such a thing the second Williams administration Throne Speech yearns to have the soulfulness of an accountant’s ledger yet fails to attain even the bean counter’s numerical elegance with only 10 digits and a few bits of punctuation.
Amid its 7 200 words, there is the now obligatory 500 word recitation of the Saga of the Atlantic Accord. There is nearly 25% of the speech given to the importance of culture and cultural industries. It lists – yes lists – writers, comedians, musicians, actors and playwrights, as if nothing more than a recitation of WANL’s membership list and a photocopying of hoary platitudes does anything more than mock the talents of the very people to be praised.
We are promised a Strategic Cultural Plan, an Energy Plan and an Innovation Plan (both strangely not Strategic), a Rural Development Strategy (which somehow avoided being branded a Strategic Rural Development Plan) and a Northern Strategic Plan exclusively for Labrador.
There are to be other plans and planning for plans to the point where this government seems in need of an army of bureaucrats devoted solely to planning for the development of plans. This would surely be followed by creation of a new section that would integrate the planning for plan development, followed in turn by the inevitable creation of its cousin secretariat for integrating the actual plans developed by the other planning, planning development and planning integration secretariats.
Some bright soul has already seen the future: the Department of The Few Fish Left is expanding its planning department to accommodate the urgent need for plans.
This speech is a dark cloak of word-mail covering a spindly frame beneath.
I wish I were making this up.
"Now that our people have been reinvigorated by a renewed pride and hope for our future, we as a society must not allow that sense of self-confidence and optimism to fade."
This is a speech which claims credit for finding that which was not lost. It praises the lustre restored to that which had not been dulled. It lauds the cleansing of that which is not sullied. It remembers what was never forgotten. This speech sings hymns of praise to its authors unhindered by modesty or fact.
In this great desert of a speech, there are mysterious oases of action. A pilot program for single parent employment will be started. There is new money – federal money for children. Yet these are small fragrant shrubs, small patches of deep green grass in a limitless grey plain.
"In particular, My Government will create sources of capital to enable businesses to establish, grow, diversify, and prosper."
There are also white tips poking through the sand, portents of the bleached bones of Latvian dinosaurs from the days when another government brought back little more from its wanderings than the crushing weight of debt. It is not for government to create sources of private sector capital out of public money, Premier Williams. One shudders at what the winds of time will expose of that seemingly Smallwoodian tyrannosaur.
This speech evokes nothing except profound disappointment at a government of action turned to a legion preparing for future leaders.
"The time has come for new heroes to step forward: men, women, and young people who can build their community, grow our economy, foster cooperation, and inspire the confidence we need to pursue our dreams together."
In this speech, these things alone speak for themselves. It is a time for new leadership in Newfoundland and Labrador.
This speech should do nothing except hasten their stride.
By contrast American presidential inaugural addresses are often profound expressions of the desire, of the aspirations of not only the president but of the nation. Sentences are crisp. The words themselves are carefully woven, often through successive drafts and revisions, to create a tapestry of images that still evoke intense emotion many decades after the speech was read.
Throne Speeches can be annual inaugurals. They can renew the commitment of an administration to core themes first introduced during a general election. They can inspire. They can serve as record of accomplishment and a pledge of definitive action that will be taken in the coming year.
Would that the Premier, or any politician, could hone the skill of a simple expression of the passions that move such humble people, as all we humans are, to achieve immortal purposes.
Would that the words of Throne Speeches were knives; blades with which to carve our rough-hewn minds into a weapon that, when wielded with such strength of conviction, we could never fail but to achieve a lasting victory against the demons Circumstance and Folly that have hobbled generations.
Sadly, in place of such a thing the second Williams administration Throne Speech yearns to have the soulfulness of an accountant’s ledger yet fails to attain even the bean counter’s numerical elegance with only 10 digits and a few bits of punctuation.
Amid its 7 200 words, there is the now obligatory 500 word recitation of the Saga of the Atlantic Accord. There is nearly 25% of the speech given to the importance of culture and cultural industries. It lists – yes lists – writers, comedians, musicians, actors and playwrights, as if nothing more than a recitation of WANL’s membership list and a photocopying of hoary platitudes does anything more than mock the talents of the very people to be praised.
We are promised a Strategic Cultural Plan, an Energy Plan and an Innovation Plan (both strangely not Strategic), a Rural Development Strategy (which somehow avoided being branded a Strategic Rural Development Plan) and a Northern Strategic Plan exclusively for Labrador.
There are to be other plans and planning for plans to the point where this government seems in need of an army of bureaucrats devoted solely to planning for the development of plans. This would surely be followed by creation of a new section that would integrate the planning for plan development, followed in turn by the inevitable creation of its cousin secretariat for integrating the actual plans developed by the other planning, planning development and planning integration secretariats.
Some bright soul has already seen the future: the Department of The Few Fish Left is expanding its planning department to accommodate the urgent need for plans.
This speech is a dark cloak of word-mail covering a spindly frame beneath.
I wish I were making this up.
"Now that our people have been reinvigorated by a renewed pride and hope for our future, we as a society must not allow that sense of self-confidence and optimism to fade."
This is a speech which claims credit for finding that which was not lost. It praises the lustre restored to that which had not been dulled. It lauds the cleansing of that which is not sullied. It remembers what was never forgotten. This speech sings hymns of praise to its authors unhindered by modesty or fact.
In this great desert of a speech, there are mysterious oases of action. A pilot program for single parent employment will be started. There is new money – federal money for children. Yet these are small fragrant shrubs, small patches of deep green grass in a limitless grey plain.
"In particular, My Government will create sources of capital to enable businesses to establish, grow, diversify, and prosper."
There are also white tips poking through the sand, portents of the bleached bones of Latvian dinosaurs from the days when another government brought back little more from its wanderings than the crushing weight of debt. It is not for government to create sources of private sector capital out of public money, Premier Williams. One shudders at what the winds of time will expose of that seemingly Smallwoodian tyrannosaur.
This speech evokes nothing except profound disappointment at a government of action turned to a legion preparing for future leaders.
"The time has come for new heroes to step forward: men, women, and young people who can build their community, grow our economy, foster cooperation, and inspire the confidence we need to pursue our dreams together."
In this speech, these things alone speak for themselves. It is a time for new leadership in Newfoundland and Labrador.
This speech should do nothing except hasten their stride.
Spin Control: Locally owned news very predictable
This week is definitely the week when everyone should wait and get the Independent for free when it goes online Wednesday.
Yes, I know you hear that every time I write about the Indy, but this time I really mean it.
Page 1: A story about foreign overfishing and how critics say trade relations with the EU are more important than sending out the navy to shoot any foreigner daring to take fish we should rightly be driving into extinction ourselves. What's new: there isn't a quote from Gus "Highgrade" Etchegary. This time the anti-foreigner quotes are from Sheila Copps, since Sheila is in town plugging her own book and demonstrating - via John Crosbie - that not all Newfoundlanders have the talent of Rick Mercer.
Page 1: a story in which Leo Puddester promises a "racket" over treatment his members are getting from government . Yeah Leo. Right. We heard that one last year, when there actually was a fight and well, there was a fight. But that was last year, Leo.
Page 1: A story by Jeff Ducharme telling us that, surprise surprise, Alberta makes way more money of its oil and gas than we do from ours. Try to find a reason for running that story. I guess we need to hear that yet again in order to be a well-informed, thinking person.
Editorial: Condemning CBC for not running the Indy's arrogant, insulting and completely laughable TV spots. (Yes Ryan, they were produced in-house and rather cheaply; It shows.)
Running through most of the editorial are the predictable things: The Indy is the only locally owned paper in the province. Every other news organization is pure shite. Buy us and be a thinking person. Blah. Blah. Blah.
There's another column by Ivan Morgan saying stuff I swear he said to me over a beer at the Breezeway or Ben's 20 years ago.
There's a column by John Crosbie attacking Liberals for corruption. John ignores his colleagues from the old Tory party from Quebec who did hard time for political crimes in the Mulroney years, but I digress.
There's a short-I mean really short - article on the Radar for Goose campaign. Interviews with proponents only. No background. Obviously people who read this blog know more about X band radar than anyone who relies on the locally owned paper for thinking people.
There's a story on page 4 on a road in Quebec that might mean the Stunnel is a living breathing idea. Above that on the page are stories on the crab plan and complaints from Labrador about a lack of kidney dialysis.
Now think about that.
I mean really think.
A hot current story about the fishery that screams for background detail - why did Trevor Taylor cook up this particular crab scheme? - gets buried on page 4.
Ditto a story on health care shortfalls.
Recycled crap makes the front page where, typically one finds...
HOT CURRENT STORIES.
and the editorial? Well, let me just say this: the more Ryan slags everyone else and claims that his paper is somehow superior, the more I know it is just spin; pure unrefined shite. Every week, I look through the Indy and I have yet to see any story that isn't covered just as well if not better in any other news outlet in the province. Well, almost any. I don't read The Monitor any more.
And when I see recycled flatulent crap, as I did this week yet again, on the Indy front page, no less, I can explain to you why your circ sucks. It has nothing to do with CBC refusing your TV spots.
The basic problem is that you claim to be the newspaper for thinking people. You claim to be informative and a whole bunch of other things. Anybody who has looked at the paper knows that it isn't any of those things. Your ad campaign sets you up for a gigantic credibility gap when they hear the ad and then look at a paper that is more like the Spindependent or, this week, the Windependent than the newspaper for thoughtful people.
If you want to boost your circulation, Ryan, stop telling me how great you are. Try writing a story that proves it. Stop with the grandiose and go back to the basics. Give me solid research, a novel approach, some background and good writing. No one is really interested with the stuff they can get anywhere else, including Open Line. And they obviously aren't really interested in pseudo-nationalist rantings in place of well-researched stuff that draws its conclusions from the evidence, not picks evidence to fit the preconceived conclusions.
In the long run, you'll find that approach is actually less expensive than the in-house ad campaign and it will be more effective in boosting your audience. Boost the audience and you can sell enough advertising to pay the bills.
In the meantime, I'll just recycle my existing bank of quotes from Gus and Sue and Ivan and Ryan and John Fitz.
And I'll keep telling people to wait until Wednesday.
Nothing in the Spindy is so hot you have to read it on Sunday.
And on Wednesday, you can get the Spindy for what it is worth right now.
I sincerely wish it were otherwise.
Yes, I know you hear that every time I write about the Indy, but this time I really mean it.
Page 1: A story about foreign overfishing and how critics say trade relations with the EU are more important than sending out the navy to shoot any foreigner daring to take fish we should rightly be driving into extinction ourselves. What's new: there isn't a quote from Gus "Highgrade" Etchegary. This time the anti-foreigner quotes are from Sheila Copps, since Sheila is in town plugging her own book and demonstrating - via John Crosbie - that not all Newfoundlanders have the talent of Rick Mercer.
Page 1: a story in which Leo Puddester promises a "racket" over treatment his members are getting from government . Yeah Leo. Right. We heard that one last year, when there actually was a fight and well, there was a fight. But that was last year, Leo.
Page 1: A story by Jeff Ducharme telling us that, surprise surprise, Alberta makes way more money of its oil and gas than we do from ours. Try to find a reason for running that story. I guess we need to hear that yet again in order to be a well-informed, thinking person.
Editorial: Condemning CBC for not running the Indy's arrogant, insulting and completely laughable TV spots. (Yes Ryan, they were produced in-house and rather cheaply; It shows.)
Running through most of the editorial are the predictable things: The Indy is the only locally owned paper in the province. Every other news organization is pure shite. Buy us and be a thinking person. Blah. Blah. Blah.
There's another column by Ivan Morgan saying stuff I swear he said to me over a beer at the Breezeway or Ben's 20 years ago.
There's a column by John Crosbie attacking Liberals for corruption. John ignores his colleagues from the old Tory party from Quebec who did hard time for political crimes in the Mulroney years, but I digress.
There's a short-I mean really short - article on the Radar for Goose campaign. Interviews with proponents only. No background. Obviously people who read this blog know more about X band radar than anyone who relies on the locally owned paper for thinking people.
There's a story on page 4 on a road in Quebec that might mean the Stunnel is a living breathing idea. Above that on the page are stories on the crab plan and complaints from Labrador about a lack of kidney dialysis.
Now think about that.
I mean really think.
A hot current story about the fishery that screams for background detail - why did Trevor Taylor cook up this particular crab scheme? - gets buried on page 4.
Ditto a story on health care shortfalls.
Recycled crap makes the front page where, typically one finds...
HOT CURRENT STORIES.
and the editorial? Well, let me just say this: the more Ryan slags everyone else and claims that his paper is somehow superior, the more I know it is just spin; pure unrefined shite. Every week, I look through the Indy and I have yet to see any story that isn't covered just as well if not better in any other news outlet in the province. Well, almost any. I don't read The Monitor any more.
And when I see recycled flatulent crap, as I did this week yet again, on the Indy front page, no less, I can explain to you why your circ sucks. It has nothing to do with CBC refusing your TV spots.
The basic problem is that you claim to be the newspaper for thinking people. You claim to be informative and a whole bunch of other things. Anybody who has looked at the paper knows that it isn't any of those things. Your ad campaign sets you up for a gigantic credibility gap when they hear the ad and then look at a paper that is more like the Spindependent or, this week, the Windependent than the newspaper for thoughtful people.
If you want to boost your circulation, Ryan, stop telling me how great you are. Try writing a story that proves it. Stop with the grandiose and go back to the basics. Give me solid research, a novel approach, some background and good writing. No one is really interested with the stuff they can get anywhere else, including Open Line. And they obviously aren't really interested in pseudo-nationalist rantings in place of well-researched stuff that draws its conclusions from the evidence, not picks evidence to fit the preconceived conclusions.
In the long run, you'll find that approach is actually less expensive than the in-house ad campaign and it will be more effective in boosting your audience. Boost the audience and you can sell enough advertising to pay the bills.
In the meantime, I'll just recycle my existing bank of quotes from Gus and Sue and Ivan and Ryan and John Fitz.
And I'll keep telling people to wait until Wednesday.
Nothing in the Spindy is so hot you have to read it on Sunday.
And on Wednesday, you can get the Spindy for what it is worth right now.
I sincerely wish it were otherwise.
14 March 2005
Spin Control: NBC offers whine with the news
NBC Nightly news today offered up some whining to go with the rest of its coverage.
The story: "GOP under fire for producing news ‘reports’; Critics say it’s nothing but PR disguised as news" by Andrea Mitchell.
"Available on the Internet to TV stations across the country: Upbeat reports on Iraq. [...]But all these reports were written and distributed by the administration and its public relations firms — not by journalists."
The offensive Internet video pieces are all a form of video news releases (VNRs), a recent version of the standard type-written news release that is offered in either audio only or in video formats that, like their print relatives, follow the style of a news broadcast.
Mitchell's report suggests that these government-produced videos are being improperly distributed to the American public and are not being correctly identified as to the source. She refers to a recent Government Accountability Office report that appears to label all Bush administration VNRs as propaganda and therefore banned under a law dating back to the early 1950s.
There are a few problems with Ms. Mitchell's report that qualify her it as pure spin: blatant and deliberate misrepresentation of facts.
1. Take a trip to the State department site. Here's the link. You only get to this page after clicking on the Press and Public Affairs link (another word for public or media relations) and then clicking on a link called audio and video release. Start at www.state.gov to see my point.
Ms. Mitchell doesn't indicate anywhere how this is actually deceptive from the perspective of anyone visiting the website of a government department. The materials are clearly labeled and anyone navigating the State site will only get to the audio and video releases by the same route they would get to the print ones.
2. Ms. Mitchell does refer to a GAO opinion. What she doesn't state is that this opinion was rendered based on a 2003 appropriations amendment that provides "No part of any appropriation contained in this or any other Act shall be used for publicity or propaganda purposes within the United States not heretofore authorized by the Congress.” Pub. L. No. 108-7, Div. J, Tit. VI, § 626, 117 Stat. 11, 470 (2003). That is an extract from a specific decision by the GAO.
Now look more closely at the criteria the GAO used in its assessment to determine if a particular video news release violates the ban on publicity or propaganda not specifically authorized by Congress. To violate the ban, a video news release must:
- be self-aggrandizing;
- purely partisan in nature; or,
- covert as to source.
In my quick survey, the materials as presented on the departmental websites are neither self-agrandizing, purely partisan and they are clearly not covert.
What are the odds the "ban" was added by the Democrats as part of the ongoing partisan war with the Bush White House?
Personally, even if that weren't true, I'd consider the GOA decisions as essential information for Ms. Mitchell's report. Leaving out the context of the GAO decisions counts as deliberately misleading or misrepresenting matters of fact that would have the effect of advertently or inadvertently misleading her audience.
Ms. Mitchell's piece appears to condemn all VNRs; US federal law and the GAO opinions are about very specific pieces of work.
If anything, Ms. Mitchell has a problem with some of her colleagues in the world of TV news who, as her piece notes, use the VNRs and dub their own voices onto the audio track using exactly the same script to make it appear as though they were original.
Here are a couple of observations from the real world: that type of misrepresentation described by Ms. Mitchell - that is the presentation of someone else's work as one's own is utterly unethical - it is plagiarism. It's a firing offense. Redub an audio track verbatim; expect to get fired. If Andrea Mitchell wanted to do a story, she had one right there.
But it is equally improper for Ms. Mitchell and NBC to slag "public relations" people for the failings of her colleagues.
If she were to look at the "print" news releases it is very common for a significant chunk of the release content to make into print copy or into video and audio voice-overs by reporters. There is no substantive difference between the print and video versions of news releases nor in their subsequent use by reporters in that instance. That said, however, using upwards of 60% of my copy, for example, in a reporter's account makes me smile, but it is hardly the travesty Ms. Mitchell claims.
I label my stuff accurately and to the best of my knowledge my professional colleagues do likewise. However, NBC should not attack public relations professionals for doing their job in a similar manner. If Ms. Mitchell can demonstrate otherwise, then report the plain facts - don't use a limited GAO report or series of reports on specific incidents as a blanket condemnation of a useful information tool. Ms. Mitchell's report is akin to spearing all journalists because one guy invented quotes and even people.
To go a step farther, I would also question the validity of the GAO report cited above. It makes reference to government-prepared editorials and labels them as propaganda since they are "covert". Not exactly. If the news organization receiving them knows where they are coming from, then they are overt. If the news organization misrepresents the editorial copy then it is at fault.
So why is this whining?
Well, some news organizations dislike the Internet. Established electronic media - like CBC for example - thrive on being able to interpret the world for their audiences. They made their bread and butter and want to continue making it by being the filter through which the wider public gets its information.
In the old days, a news release only went to a news room where it could be dissected, plagiarised, attacked, ignored or whatevered at the whim of the news editors and the reporters.
Today, thanks to the Internet an organization can supply its perspective unfiltered to the audience. It's all usually clearly marked so no one gets fooled, but in a sense it cuts out the middle-man.
That's one of the reasons CBC took such a vehement, almost rabid stand against embedding reporters with military forces during the invasion of Iraq.
It's one of the reasons why a reporter like Andrea Mitchell would spin her report against video news releases and their distribution via the Internet. Go back and look at her lead again.
And the other piece of spin today? This story followed a report that the Bush administration has just appointed someone to help improve communications with the Middle East. What better time to lob some flak at the new flak-bait.
Well spun, Andrea.
As your close indicates, the best way to spin the news is spin it yourself.
Too bad none of piece was news you can trust.
The story: "GOP under fire for producing news ‘reports’; Critics say it’s nothing but PR disguised as news" by Andrea Mitchell.
"Available on the Internet to TV stations across the country: Upbeat reports on Iraq. [...]But all these reports were written and distributed by the administration and its public relations firms — not by journalists."
The offensive Internet video pieces are all a form of video news releases (VNRs), a recent version of the standard type-written news release that is offered in either audio only or in video formats that, like their print relatives, follow the style of a news broadcast.
Mitchell's report suggests that these government-produced videos are being improperly distributed to the American public and are not being correctly identified as to the source. She refers to a recent Government Accountability Office report that appears to label all Bush administration VNRs as propaganda and therefore banned under a law dating back to the early 1950s.
There are a few problems with Ms. Mitchell's report that qualify her it as pure spin: blatant and deliberate misrepresentation of facts.
1. Take a trip to the State department site. Here's the link. You only get to this page after clicking on the Press and Public Affairs link (another word for public or media relations) and then clicking on a link called audio and video release. Start at www.state.gov to see my point.
Ms. Mitchell doesn't indicate anywhere how this is actually deceptive from the perspective of anyone visiting the website of a government department. The materials are clearly labeled and anyone navigating the State site will only get to the audio and video releases by the same route they would get to the print ones.
2. Ms. Mitchell does refer to a GAO opinion. What she doesn't state is that this opinion was rendered based on a 2003 appropriations amendment that provides "No part of any appropriation contained in this or any other Act shall be used for publicity or propaganda purposes within the United States not heretofore authorized by the Congress.” Pub. L. No. 108-7, Div. J, Tit. VI, § 626, 117 Stat. 11, 470 (2003). That is an extract from a specific decision by the GAO.
Now look more closely at the criteria the GAO used in its assessment to determine if a particular video news release violates the ban on publicity or propaganda not specifically authorized by Congress. To violate the ban, a video news release must:
- be self-aggrandizing;
- purely partisan in nature; or,
- covert as to source.
In my quick survey, the materials as presented on the departmental websites are neither self-agrandizing, purely partisan and they are clearly not covert.
What are the odds the "ban" was added by the Democrats as part of the ongoing partisan war with the Bush White House?
Personally, even if that weren't true, I'd consider the GOA decisions as essential information for Ms. Mitchell's report. Leaving out the context of the GAO decisions counts as deliberately misleading or misrepresenting matters of fact that would have the effect of advertently or inadvertently misleading her audience.
Ms. Mitchell's piece appears to condemn all VNRs; US federal law and the GAO opinions are about very specific pieces of work.
If anything, Ms. Mitchell has a problem with some of her colleagues in the world of TV news who, as her piece notes, use the VNRs and dub their own voices onto the audio track using exactly the same script to make it appear as though they were original.
Here are a couple of observations from the real world: that type of misrepresentation described by Ms. Mitchell - that is the presentation of someone else's work as one's own is utterly unethical - it is plagiarism. It's a firing offense. Redub an audio track verbatim; expect to get fired. If Andrea Mitchell wanted to do a story, she had one right there.
But it is equally improper for Ms. Mitchell and NBC to slag "public relations" people for the failings of her colleagues.
If she were to look at the "print" news releases it is very common for a significant chunk of the release content to make into print copy or into video and audio voice-overs by reporters. There is no substantive difference between the print and video versions of news releases nor in their subsequent use by reporters in that instance. That said, however, using upwards of 60% of my copy, for example, in a reporter's account makes me smile, but it is hardly the travesty Ms. Mitchell claims.
I label my stuff accurately and to the best of my knowledge my professional colleagues do likewise. However, NBC should not attack public relations professionals for doing their job in a similar manner. If Ms. Mitchell can demonstrate otherwise, then report the plain facts - don't use a limited GAO report or series of reports on specific incidents as a blanket condemnation of a useful information tool. Ms. Mitchell's report is akin to spearing all journalists because one guy invented quotes and even people.
To go a step farther, I would also question the validity of the GAO report cited above. It makes reference to government-prepared editorials and labels them as propaganda since they are "covert". Not exactly. If the news organization receiving them knows where they are coming from, then they are overt. If the news organization misrepresents the editorial copy then it is at fault.
So why is this whining?
Well, some news organizations dislike the Internet. Established electronic media - like CBC for example - thrive on being able to interpret the world for their audiences. They made their bread and butter and want to continue making it by being the filter through which the wider public gets its information.
In the old days, a news release only went to a news room where it could be dissected, plagiarised, attacked, ignored or whatevered at the whim of the news editors and the reporters.
Today, thanks to the Internet an organization can supply its perspective unfiltered to the audience. It's all usually clearly marked so no one gets fooled, but in a sense it cuts out the middle-man.
That's one of the reasons CBC took such a vehement, almost rabid stand against embedding reporters with military forces during the invasion of Iraq.
It's one of the reasons why a reporter like Andrea Mitchell would spin her report against video news releases and their distribution via the Internet. Go back and look at her lead again.
And the other piece of spin today? This story followed a report that the Bush administration has just appointed someone to help improve communications with the Middle East. What better time to lob some flak at the new flak-bait.
Well spun, Andrea.
As your close indicates, the best way to spin the news is spin it yourself.
Too bad none of piece was news you can trust.
Danny Deficit Billions?
If Loyola Sullivan's worst case scenario comes true, Danny Williams will increase the province's accrual debt by an amount that is 76% of the total direct debt since Confederation.
Loyola Sullivan never flings words around carelessly, especially when it comes to numbers. He has a love of numbers and decimals and fractions that even a mathematician or account would find perverse. So if Loyola actually told CBC Radio on Friday that the accrual debt could hit $17.0 billion then $17.0 billion is well within the range of possibilities.
Let's take another look at Loyola Sullivan's deficit and debt projections and put it in perspective.
He told CBC Radio that "We're going to have significantly more [debt] over the next number of years," he says.
"We're going to have [a] $14-, $15-, $16-, maybe $17-billion debt before we stop this. So, it's a huge problem. Our problem is still growing." That is a direct quote.
If government was able to reduce the accrual deficit from its current level of about $500 million down to zero (a completely balanced budget) in the next four years, the provincial government would add $2.0 billion to the debt. The total debt at the end would be around $14.0 billion, up from the current level of near $12.0 billion.
(Deficit is how much more we spend than we take in during any given year; debt is the accumulation of all the overspending and any other long term borrowing. Direct debt is what the government owes directly. Accrual debt is the total of everything owed by government and its agencies and any loan guarantees and other liabilities backed by the Crown.)
In order to hit that $17.0 billion figure we would have to increase the debt by $5.0 billion. In other words, we would have to incur annual deficits averaging $500 million for another decade.
Observation 1: In order to hit that number for the debt, it would be 2014 at the earliest before the provincial budget would be balanced.
The Commitments:
A. The Budget. In last year's budget, Loyola Sullivan was careful to commit to balancing the books on a cash basis only by 2007-08. He said that "[i]n March 2007, this government will present the people of this province with a budget that is balanced on a cash basis and that will be sustainable into the future."
B. The Blue Book. Loyola Sullivan made reference to the Blue Book commitments in that speech. Specifically, the commitment was to:
- Eliminate the total capital and current account deficit by 2008;
- [Achieve] a net debt to GDP ratio of 40% or less by 2008; and ,
- [Make] [a]nnual payments to the public sector pension funds that will achieve real year-over-year reductions in the unfunded liability of public sector pension plans.
PriceWaterHouse Coopers comments: The Gourley report made the claim that the province could not balance its current and capital account by the same period. These are not exactly the same thing. "Cash" is sometimes used interchangeably with "current" meaning the money spent for salaries and operations.
On that basis the budget is already balanced and should remain balanced if not in surplus for the next five to eight years. As PriceWaterHouseCoopers reports (p. 34):
"These projections show that even with an assumed level of restraint on expenditure growth and growth in oil related revenues from a forecast $160.1 million for 2003-04 to $491.9 million in 2007-08, it will not be possible to eliminate the Province’s cash or consolidated accrual deficits within the next four years."
Assessment 1: There are contradictions between the Blue Book and current government commitments.
The current account has been balanced already consistent with Blue Book and the last budget.
However, the budget speech only committed clearly to balancing current account. There is no commitment to balancing the capital account nor is there a clear commitment to carrying through on the Blue Book promise of tackling the unfunded pension liabilities.
Mr. Sullivan's comments to CBC suggest yet another set of fiscal commitments that do not resemble those made previously except in broad outline.
Based on Mr. Sullivan's comments, government does not intend to reduce the unfunded pension liability in the short- to medium- term. It will also not achieve its commitment to balance the current and capital accounts before the next election. In fact, government may take up to a decade to achieve a balanced budget despite a commitment to attain current and capital balance within four years and achieve "real" reductions in the accrual debt and deficit.
Observation 2: In 2014, there will be less revenue life left in the offshore than we have now. That means the province will balance the books and have all the debt servicing costs associated with that at the very point when provincial government offshore revenues will start to decline.
Go back and have a look at the offshore revenue projections Wade Locke made in his public presentation in February. Locke projected that in 2014, direct offshore revenue would be slightly more than $200 million and would decline annually until 2025. Compare that to 2007/08 when projections have oil revenue being between $600 million and $1.1 billion, depending on the price of oil per barrel.
Observation 3: The current provincial government direct debt is approximately $6.5 billion according to statements from the provincial department of Finance.
In Mr. Sullivan's' worst case scenario (accrual debt = $17.0 billion by 2014), the provincial government debt during the Williams administration would grow by an amount equal to 76% of the accumulated direct debt from 1949 to 2004.
I am still sitting here with mouth agape at the prospect that the provincial government might actually be that far away from its commitments last year.
Maybe Loyola didn't mean it.
But did he not mean what he said last Friday or what he said last year?
Loyola Sullivan never flings words around carelessly, especially when it comes to numbers. He has a love of numbers and decimals and fractions that even a mathematician or account would find perverse. So if Loyola actually told CBC Radio on Friday that the accrual debt could hit $17.0 billion then $17.0 billion is well within the range of possibilities.
Let's take another look at Loyola Sullivan's deficit and debt projections and put it in perspective.
He told CBC Radio that "We're going to have significantly more [debt] over the next number of years," he says.
"We're going to have [a] $14-, $15-, $16-, maybe $17-billion debt before we stop this. So, it's a huge problem. Our problem is still growing." That is a direct quote.
If government was able to reduce the accrual deficit from its current level of about $500 million down to zero (a completely balanced budget) in the next four years, the provincial government would add $2.0 billion to the debt. The total debt at the end would be around $14.0 billion, up from the current level of near $12.0 billion.
(Deficit is how much more we spend than we take in during any given year; debt is the accumulation of all the overspending and any other long term borrowing. Direct debt is what the government owes directly. Accrual debt is the total of everything owed by government and its agencies and any loan guarantees and other liabilities backed by the Crown.)
In order to hit that $17.0 billion figure we would have to increase the debt by $5.0 billion. In other words, we would have to incur annual deficits averaging $500 million for another decade.
Observation 1: In order to hit that number for the debt, it would be 2014 at the earliest before the provincial budget would be balanced.
The Commitments:
A. The Budget. In last year's budget, Loyola Sullivan was careful to commit to balancing the books on a cash basis only by 2007-08. He said that "[i]n March 2007, this government will present the people of this province with a budget that is balanced on a cash basis and that will be sustainable into the future."
B. The Blue Book. Loyola Sullivan made reference to the Blue Book commitments in that speech. Specifically, the commitment was to:
- Eliminate the total capital and current account deficit by 2008;
- [Achieve] a net debt to GDP ratio of 40% or less by 2008; and ,
- [Make] [a]nnual payments to the public sector pension funds that will achieve real year-over-year reductions in the unfunded liability of public sector pension plans.
PriceWaterHouse Coopers comments: The Gourley report made the claim that the province could not balance its current and capital account by the same period. These are not exactly the same thing. "Cash" is sometimes used interchangeably with "current" meaning the money spent for salaries and operations.
On that basis the budget is already balanced and should remain balanced if not in surplus for the next five to eight years. As PriceWaterHouseCoopers reports (p. 34):
"These projections show that even with an assumed level of restraint on expenditure growth and growth in oil related revenues from a forecast $160.1 million for 2003-04 to $491.9 million in 2007-08, it will not be possible to eliminate the Province’s cash or consolidated accrual deficits within the next four years."
Assessment 1: There are contradictions between the Blue Book and current government commitments.
The current account has been balanced already consistent with Blue Book and the last budget.
However, the budget speech only committed clearly to balancing current account. There is no commitment to balancing the capital account nor is there a clear commitment to carrying through on the Blue Book promise of tackling the unfunded pension liabilities.
Mr. Sullivan's comments to CBC suggest yet another set of fiscal commitments that do not resemble those made previously except in broad outline.
Based on Mr. Sullivan's comments, government does not intend to reduce the unfunded pension liability in the short- to medium- term. It will also not achieve its commitment to balance the current and capital accounts before the next election. In fact, government may take up to a decade to achieve a balanced budget despite a commitment to attain current and capital balance within four years and achieve "real" reductions in the accrual debt and deficit.
Observation 2: In 2014, there will be less revenue life left in the offshore than we have now. That means the province will balance the books and have all the debt servicing costs associated with that at the very point when provincial government offshore revenues will start to decline.
Go back and have a look at the offshore revenue projections Wade Locke made in his public presentation in February. Locke projected that in 2014, direct offshore revenue would be slightly more than $200 million and would decline annually until 2025. Compare that to 2007/08 when projections have oil revenue being between $600 million and $1.1 billion, depending on the price of oil per barrel.
Observation 3: The current provincial government direct debt is approximately $6.5 billion according to statements from the provincial department of Finance.
In Mr. Sullivan's' worst case scenario (accrual debt = $17.0 billion by 2014), the provincial government debt during the Williams administration would grow by an amount equal to 76% of the accumulated direct debt from 1949 to 2004.
I am still sitting here with mouth agape at the prospect that the provincial government might actually be that far away from its commitments last year.
Maybe Loyola didn't mean it.
But did he not mean what he said last Friday or what he said last year?
Loyola Sullivan's Credibility Gap: Welcome to the Grand Canyon
It is possible the CBC story actually misquotes Loyola, but I don't think so.
Let's compare the claims Loyola makes and compare them to the facts
Claim 1: "Starting with its first budget last March, the Williams government has changed the way it reckons its books.
Last year's projection, for instance, included the cash or current account deficit of $362 million, which traditionally has been the only figure governments have reported as its deficit.
However, the Tories now included all liabilities, including pension deficits."
This is CBC background but it reinforces the general tone of Loyola's comments. These aren't Loyola's errors directly but they increase the errors of Loyola's actual comments by putting them in a false context.
Fact: The provincial government switched to accrual accounting two fiscal years before the Williams administration took office. Those projections included all liabilities, including pension deficits.
Fact: There was nothing new in last year's budget figures.
Fact: The $362 million cash shortfall Loyola predicted was wiped out by economic growth including oil price windfalls.
Fact: The 2004 accrual deficit will be closer to $500 million, almost half the amount projected in March 2004.
Claim 2: "Sullivan says it would be impossible to balance the budget in the next three to four years without deep cuts to government spending.
Instead, he expects the deficit to hover at around $500 million for at least a few more years."
Fact: Provincial government revenues will increase annually for the foreseeable future.
Fact: The provincial government's own projections show oil revenues in Fiscal Year 2006 will be at least $600 million. That's three times current annual revenues.
Therefore, it should be possible to balance the province's books on an accrual basis without "massive cuts" to spending.
Claim 3: "That could change, he says, if oil prices soar and government revenues increase.
However, Sullivan says the debt will continue to grow, no matter what happens."
Fact: the ONLY way that the debt will continue to grow despite revenue increases will be if the provincial government fails to address the deficit and debt as it pledged in the Blue Print AND it increases spending in the meantime.
Fact: Oil prices are expected to remain at high levels, therefore increasing provincial government revenues beyond the projections used in the first six months of 2004.
Fact: The federal government has already announced increases to federal transfers in addition to the January offshore deal.
Fact: Voisey's Bay and White Rose will begin production within the next three years increasing government revenues by hundreds of millions of dollars annually.
Fact: Hebron-Ben Nevis will likely be brought onstream before 2010, further increasing government revenue. Development spending will increase government revenue before the field comes on stream.
Claim 4: "In particular, he says the government needs to spend money on infrastructure to help the economy and to boost government revenue."
Fact: There is a need to spend money on infrastructure like roads and schools.
Fact: This spending is designed to correct previous neglect, not to help the economy. The economy is thriving largely due to resource developments that are not dependent on infrastructure spending.
Fact: Government spending on infrastructure will not boost government revenues. [Let's allow that this sentence is an error by the CBC webpage writer. Maybe the increased government revenues is something else the government needs to do besides spend on infrastructure. As anyone can see, though, government revenues will increase anyway.]
Let's compare the claims Loyola makes and compare them to the facts
Claim 1: "Starting with its first budget last March, the Williams government has changed the way it reckons its books.
Last year's projection, for instance, included the cash or current account deficit of $362 million, which traditionally has been the only figure governments have reported as its deficit.
However, the Tories now included all liabilities, including pension deficits."
This is CBC background but it reinforces the general tone of Loyola's comments. These aren't Loyola's errors directly but they increase the errors of Loyola's actual comments by putting them in a false context.
Fact: The provincial government switched to accrual accounting two fiscal years before the Williams administration took office. Those projections included all liabilities, including pension deficits.
Fact: There was nothing new in last year's budget figures.
Fact: The $362 million cash shortfall Loyola predicted was wiped out by economic growth including oil price windfalls.
Fact: The 2004 accrual deficit will be closer to $500 million, almost half the amount projected in March 2004.
Claim 2: "Sullivan says it would be impossible to balance the budget in the next three to four years without deep cuts to government spending.
Instead, he expects the deficit to hover at around $500 million for at least a few more years."
Fact: Provincial government revenues will increase annually for the foreseeable future.
Fact: The provincial government's own projections show oil revenues in Fiscal Year 2006 will be at least $600 million. That's three times current annual revenues.
Therefore, it should be possible to balance the province's books on an accrual basis without "massive cuts" to spending.
Claim 3: "That could change, he says, if oil prices soar and government revenues increase.
However, Sullivan says the debt will continue to grow, no matter what happens."
Fact: the ONLY way that the debt will continue to grow despite revenue increases will be if the provincial government fails to address the deficit and debt as it pledged in the Blue Print AND it increases spending in the meantime.
Fact: Oil prices are expected to remain at high levels, therefore increasing provincial government revenues beyond the projections used in the first six months of 2004.
Fact: The federal government has already announced increases to federal transfers in addition to the January offshore deal.
Fact: Voisey's Bay and White Rose will begin production within the next three years increasing government revenues by hundreds of millions of dollars annually.
Fact: Hebron-Ben Nevis will likely be brought onstream before 2010, further increasing government revenue. Development spending will increase government revenue before the field comes on stream.
Claim 4: "In particular, he says the government needs to spend money on infrastructure to help the economy and to boost government revenue."
Fact: There is a need to spend money on infrastructure like roads and schools.
Fact: This spending is designed to correct previous neglect, not to help the economy. The economy is thriving largely due to resource developments that are not dependent on infrastructure spending.
Fact: Government spending on infrastructure will not boost government revenues. [Let's allow that this sentence is an error by the CBC webpage writer. Maybe the increased government revenues is something else the government needs to do besides spend on infrastructure. As anyone can see, though, government revenues will increase anyway.]
Loyola's Brush: Sullivan signals return to Tobinism
Be afraid.
Be very afraid.
In a CBC Radio story this morning, finance minister Loyola Sullivan, newly stripped by the Premier of his spine - read Flo Delaney, is now warning the people of the province that the government's debt will continue to spiral unchecked under the Progressive Conservatives.
Sullivan is warning that the government's accrual deficit (the difference between revenue and spending) will hover around $500 million for each of the next three years. That adds another $1.5 billion to the province's debt and will eat up every single nickel of the money so lavishly worshipped in the recent Valentine's Day offshore deal celebrations.
Holy Cow.
Think about it this way:
- Sullivan predicted last year that the cash shortfall would be almost $400 million this year alone, with an all-inclusive deficit of a little over $900 million.
- Through a combination of spending restraint, economic growth and windfalls from increased oil prices, the provincial government is expected to post a modest surplus on a cash basis this year. The only thing seriously out of whack in the provincial government's budget will remain the unfunded pension liabilities found chiefly in the teacher's pension fund.
- These huge deficits are projected to come at a time when oil revenues will hit their peak - almost $1.0 billion by some projections - and at a time when the new oil deal will continue to ship federal transfers to the province.
- These huge deficits will occur despite added revenues from White Rose and Voisey's Bay, both of which come on stream within the next three years. The deficits will occur despite the likelihood Hebron Ben Nevis will start swelling government coffers before the decade is out.
In other words:
despite massive record-setting increases in the provincial government record-high revenue - even without the extra $2.0 billion from Ottawa - Loyola Sullivan is warning that we will continue to run record deficits and add to our already record-high debt load.
Sullivan's comments today signal an end to the restraint program announced last year in the Premier's hideous January 5 speech. A seeming long-term program to sort out the provincial government's eternal fiscal problems has been abandoned at the end of Year One.
Instead, there seems to be a return to Tobinesque spending on short-term projects designed primarily to boost the government's (read the Premier's) political popularity.
It sounds like the provincial government isn't going to expend a single penny on fighting the unfunded pension liabilities. Government could set aside an amount from the oil money in a pension fund which would progressively reduce the unfunded liability, even if it did not wipe it out altogether and even in the absence of an agreement with teachers. Make no mistake though teachers are going to have to ante up and help fix their pension problems. Danny Williams should be applying his considerable power to tackling those labour problems, as unpopular as that may make him.
That would be a start and would lower the projected deficit without consuming all the new money flowing.
This is unthinkable.
If Loyola Sullivan wants to be truly accountable, he would release some detailed financial projections with his new budget. We need to see all the figures he has access to. We need to see the basis on which government is making its projections. Then, during his next round of budget "consultations", he might get a rude shock.
The "consultations" might actual contain some concrete directions from his real boss - the voters - as to what he should be doing in order to keep his job.
If Loyola thinks people turned on Brian Tobin after they'd had a good look at thim, wait 'til they get a hard look at a bunch of guys that have more money than anybody else running the place ever had and still manage to spend more and more and more besides.
Be very afraid.
In a CBC Radio story this morning, finance minister Loyola Sullivan, newly stripped by the Premier of his spine - read Flo Delaney, is now warning the people of the province that the government's debt will continue to spiral unchecked under the Progressive Conservatives.
Sullivan is warning that the government's accrual deficit (the difference between revenue and spending) will hover around $500 million for each of the next three years. That adds another $1.5 billion to the province's debt and will eat up every single nickel of the money so lavishly worshipped in the recent Valentine's Day offshore deal celebrations.
Holy Cow.
Think about it this way:
- Sullivan predicted last year that the cash shortfall would be almost $400 million this year alone, with an all-inclusive deficit of a little over $900 million.
- Through a combination of spending restraint, economic growth and windfalls from increased oil prices, the provincial government is expected to post a modest surplus on a cash basis this year. The only thing seriously out of whack in the provincial government's budget will remain the unfunded pension liabilities found chiefly in the teacher's pension fund.
That represents a changed cash flow of almost $700 million, seemingly the largest error in provincial government budget calculations in more than 15 years.
- These huge deficits are projected to come at a time when oil revenues will hit their peak - almost $1.0 billion by some projections - and at a time when the new oil deal will continue to ship federal transfers to the province.
- These huge deficits will occur despite added revenues from White Rose and Voisey's Bay, both of which come on stream within the next three years. The deficits will occur despite the likelihood Hebron Ben Nevis will start swelling government coffers before the decade is out.
In other words:
despite massive record-setting increases in the provincial government record-high revenue - even without the extra $2.0 billion from Ottawa - Loyola Sullivan is warning that we will continue to run record deficits and add to our already record-high debt load.
Sullivan's comments today signal an end to the restraint program announced last year in the Premier's hideous January 5 speech. A seeming long-term program to sort out the provincial government's eternal fiscal problems has been abandoned at the end of Year One.
Instead, there seems to be a return to Tobinesque spending on short-term projects designed primarily to boost the government's (read the Premier's) political popularity.
It sounds like the provincial government isn't going to expend a single penny on fighting the unfunded pension liabilities. Government could set aside an amount from the oil money in a pension fund which would progressively reduce the unfunded liability, even if it did not wipe it out altogether and even in the absence of an agreement with teachers. Make no mistake though teachers are going to have to ante up and help fix their pension problems. Danny Williams should be applying his considerable power to tackling those labour problems, as unpopular as that may make him.
That would be a start and would lower the projected deficit without consuming all the new money flowing.
This is unthinkable.
If Loyola Sullivan wants to be truly accountable, he would release some detailed financial projections with his new budget. We need to see all the figures he has access to. We need to see the basis on which government is making its projections. Then, during his next round of budget "consultations", he might get a rude shock.
The "consultations" might actual contain some concrete directions from his real boss - the voters - as to what he should be doing in order to keep his job.
If Loyola thinks people turned on Brian Tobin after they'd had a good look at thim, wait 'til they get a hard look at a bunch of guys that have more money than anybody else running the place ever had and still manage to spend more and more and more besides.
11 March 2005
Buffing a TRD
On a snowy Friday in March, a few days before the House is due to re-open Danny Williams decides to shuffle around a couple of portfolios. Here's the release, in all its flatulent splendor.
Trevor Taylor gives up Labrador Affairs to Paul Shelley, who gains new responsibilities because, as the release says, Paul has "deep roots" in the Big Land.
Trevor apparently has big challenges in fisheries and aquaculture, meaning that he is taking flack for the recent crab business, the sideways shuffle of a policy that was an apt metaphor for the species it affected.
At the same time, the Minister of Justice gets to take Intergovernmental Affairs. Ostensibly meaning - the release claims - this change allows the Premier to devote more time to other things like the Department of Business.
This little creation, you may recall, has sat moribund for the entire time the Tories have been in office. It still exists without a deputy minister or assistant deputy and, as near as anyone can figure out, any defined purpose that is different from anything that has gone before.
The only major departmental initiative to date appears to have been handing over almost $100, 000 to a local marketing firm to do some baseline research on attitudes to the province. It was undoubtedly good work done by an excellent firm but one must look askance at the lack of productivity of this department.
Business as a department of its own (acronym DBus, pronounced "Dee Bus") duplicates the work of Innovation, Trade and Rural Development - with the acronym InTRD - formerly Industry, Trade and Rural Development, with the acronym ITRD or as I preferred DITRD. [Wags out there will stick a "u" between the "t" and the "r" to get the full sound of both acronyms, but I digress. Sometimes acronyms are inadvertently meaningful.]
The DBus budget consists essentially of the money formerly allocated to the "Manufactured Right Here" promotion in InTRD. No surprise therefore that its major project in the coming months is likely to be... wait for it...a promotion campaign to "brand" the province in the investment sector on the mainland. For that, we need a minister (the Premier) and a whole departmental apparatus. Pull the other one; it's got bells on it.
If this shuffle is about productivity and focus, I'll make a simple observation that might produce a greater result than debussing the Premier from IGA.
My observation is even more substantial that having ministers and their staffs actually working rather than paying attention to Open Line and then calling in to comment on something. Surely to goodness the Premier can communicate more effectively with the people of the province than by calling an open line program like say...the Moon Man or Sue used to do. Surely there are better uses for political staff than sitting by their radios for upwards of six hours a day on the off chance Joe from Bung Hole Tickle will call and complain about the government.
People complain about government like they breathe. Government in this province started to get less productive after the arrival of Brian Tobin, when he and his crowd started spending more time working the phones to Bill and George rather than trying to get some work done. Danny and his crowd seem to be following suit.
That said, I am going to hang my blogger hat on a more substantial issue. If you take this release at face value, the DBus has been lagging because the Premier has been preoccupied with other things, like the offshore oil talks. That's an admission of what I have said before. The time-management and productivity problem of this government sits solely in the Premier's own lap. Danny Williams has injected himself into anything and everything he could whenever he could. As a consequence, the government has been dealing with issues in series rather than in parallel.
As I noted in the post "Ed Byrne Redux", the Premier needs to take his hands off files that properly belong to his ministers and let his ministers work them.
It is time for a New Approach, Danny. In fact, it's eighteen months past due. This minor shuffle can't fix one of the fundamental problems on The Hill. Even if Tom Marshall is the new IGA minister, everyone knows that the Premier will still be speaking on, acting on and otherwise working files that Tom would be capable of handling himself. Or Danny will be working stuff from Natural Resources, Fisheries, Aboriginal Affairs, Health or anything else that catches his or the media's attention.
The New Approach was supposed to be more than a novel use of the shift key.
Getting more productive activity out of this government will take more than changing the names of ministers on departmental letterhead.
There's an old saying in the public relations business that you can't buff a t*rd. It means that no amount of "spin" or flatulent writing can cover over what everone else can see. It's like murdering both your parents and then calling for mercy because you're an orphan.
Shuffling around a couple of portfolios doesn't get at the root of the productivity challenge.
This release seems to be applying some Kiwi and spit instead.
Trevor Taylor gives up Labrador Affairs to Paul Shelley, who gains new responsibilities because, as the release says, Paul has "deep roots" in the Big Land.
Trevor apparently has big challenges in fisheries and aquaculture, meaning that he is taking flack for the recent crab business, the sideways shuffle of a policy that was an apt metaphor for the species it affected.
At the same time, the Minister of Justice gets to take Intergovernmental Affairs. Ostensibly meaning - the release claims - this change allows the Premier to devote more time to other things like the Department of Business.
This little creation, you may recall, has sat moribund for the entire time the Tories have been in office. It still exists without a deputy minister or assistant deputy and, as near as anyone can figure out, any defined purpose that is different from anything that has gone before.
The only major departmental initiative to date appears to have been handing over almost $100, 000 to a local marketing firm to do some baseline research on attitudes to the province. It was undoubtedly good work done by an excellent firm but one must look askance at the lack of productivity of this department.
Business as a department of its own (acronym DBus, pronounced "Dee Bus") duplicates the work of Innovation, Trade and Rural Development - with the acronym InTRD - formerly Industry, Trade and Rural Development, with the acronym ITRD or as I preferred DITRD. [Wags out there will stick a "u" between the "t" and the "r" to get the full sound of both acronyms, but I digress. Sometimes acronyms are inadvertently meaningful.]
The DBus budget consists essentially of the money formerly allocated to the "Manufactured Right Here" promotion in InTRD. No surprise therefore that its major project in the coming months is likely to be... wait for it...a promotion campaign to "brand" the province in the investment sector on the mainland. For that, we need a minister (the Premier) and a whole departmental apparatus. Pull the other one; it's got bells on it.
If this shuffle is about productivity and focus, I'll make a simple observation that might produce a greater result than debussing the Premier from IGA.
My observation is even more substantial that having ministers and their staffs actually working rather than paying attention to Open Line and then calling in to comment on something. Surely to goodness the Premier can communicate more effectively with the people of the province than by calling an open line program like say...the Moon Man or Sue used to do. Surely there are better uses for political staff than sitting by their radios for upwards of six hours a day on the off chance Joe from Bung Hole Tickle will call and complain about the government.
People complain about government like they breathe. Government in this province started to get less productive after the arrival of Brian Tobin, when he and his crowd started spending more time working the phones to Bill and George rather than trying to get some work done. Danny and his crowd seem to be following suit.
That said, I am going to hang my blogger hat on a more substantial issue. If you take this release at face value, the DBus has been lagging because the Premier has been preoccupied with other things, like the offshore oil talks. That's an admission of what I have said before. The time-management and productivity problem of this government sits solely in the Premier's own lap. Danny Williams has injected himself into anything and everything he could whenever he could. As a consequence, the government has been dealing with issues in series rather than in parallel.
As I noted in the post "Ed Byrne Redux", the Premier needs to take his hands off files that properly belong to his ministers and let his ministers work them.
It is time for a New Approach, Danny. In fact, it's eighteen months past due. This minor shuffle can't fix one of the fundamental problems on The Hill. Even if Tom Marshall is the new IGA minister, everyone knows that the Premier will still be speaking on, acting on and otherwise working files that Tom would be capable of handling himself. Or Danny will be working stuff from Natural Resources, Fisheries, Aboriginal Affairs, Health or anything else that catches his or the media's attention.
The New Approach was supposed to be more than a novel use of the shift key.
Getting more productive activity out of this government will take more than changing the names of ministers on departmental letterhead.
There's an old saying in the public relations business that you can't buff a t*rd. It means that no amount of "spin" or flatulent writing can cover over what everone else can see. It's like murdering both your parents and then calling for mercy because you're an orphan.
Shuffling around a couple of portfolios doesn't get at the root of the productivity challenge.
This release seems to be applying some Kiwi and spit instead.
Subscribe to:
Posts (Atom)