A farewell to Tom Marshall #nlpoli

Tom Marshall spent his last few hours ever as a member of the House of Assembly on Thursday,  as the spring session drew to a close.  Tom’s already handed in his notice and will be out of the Premier’s Office and politics around this time next month.

Marshall is decent fellow who brought sincerity, integrity, and dignity to the House and to the cabinet responsibilities he bore. He took a lot of praise from colleagues on both sides of the House on Thursday and Tom deserved every word. Tom’s short tenure as Premier began with some of the smartest moves the Conservatives have ever made.

It’s unfortunate that the end of his tenure has been marred by a series of unfortunate events. But in another sense, those events are typical of the history of the current administration.

Always read the large print #nlpoli

The Conference Board of Canada released a report last week that assessed economic performance in each of the provinces in Canada.

“The resource-driven economies of Alberta, Saskatchewan and Newfoundland and Labrador can boast A+ grades for their economic performance,” read the first sentence of the news release accompanying the report, titled How Canada Performs: Economy.

Amazing stuff and more than a few people  - most likely provincial Conservatives – stuck their chest out in pride.  They should have read the big print in the report.  The first sentence is more than a wee bit misleading.

Budget Basics: Unfunded Pension and Benefits Liabilities #nlpoli

While the provincial budget for 2014 was all about spending government money, the budget speech did raise one issue that the provincial government appears intent on cutting dramatically.

A key component of the province’s net debt relates to unfunded pension and other post-retirement liabilities. Despite an investment of more than $3.6 billion, the liabilities have continued to grow. As of March 31, 2013, they accounted for 67 per cent of net debt. By 2016-17, they will account for 85 per cent of net debt – almost $9 billion.

The provincial government has been talking about the unfunded pension and benefits liabilities for a couple of years now.  It’s a hot issue among business groups like the employers’ council or the Canadian Federation of Independent Business. 

As regular readers know, the board of trade is keen to deal with the unfunded liability, too, even if the president or whoever wrote her column in last week’s Saturday Telegram don’t appear to understand what it is all about.

For whatever reason, business groups get quite agitated about public sector workers and their pensions.  Other public debt doesn’t get them quite as worked up and, as the board of trade demonstrated quite clearly, there’s a fair bit of misinformation about the unfunded pension liability.

In this second post in the Budget Basic series, let’s take a look at public sector pensions and put them in a wider context.  Misinformation never leads to good public policy but right now, pretty well all the anti-pension commentary is based on some amount of misinformation.

The Whizzo Quality Assortment #nlpoli

On the outside, the spring budget for 2014 looks like a delicious assortment of goodies for everyone.  You can tell it is delectable because everyone is shouting for joy and drooling over their good fortune.

There is not a single group who have had their hands out for government money that did not get something. And they are telling anyone who will listen just how happy they are. 

Once you bite into one of sweetmeats in the Conservative Quality Assortment budget,  though, the result might be a wee bit less tasteful.

Budget consultations and other political insanity #nlpoli

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

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

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

Thinking about the Unthinkable #nlpoli

Only a decade ago, voters turfed Roger Grimes and the Liberals from office as punishment for – among other things – signing a deal to develop a nickel mine even though it was a really good deal.

[Not one teaspoon, they said, echoing a line Brian Tobin used.  Better to leave the ore in the ground than do a deal that involved any ore leaving the province unprocessed]

But leave the oil in the ground rather than pump it out?

Unthinkable. 

That’s curious because leaving the oil in the ground is a valid policy choice for any government, including one in Newfoundland and Labrador.

The Vibrant Unsustainable Super Energy Debt Warehouse #nlpoli

The Conservatives used to say that Newfoundland and Labrador was eastern North America’s energy warehouse.  Once Danny Williams ran for the hills and left Kathy Dunderdale in charge, she kicked everything up a notch.

Energy warehouse was too plain for Kathy, whose party ran on the slogan “New Energy” in the 2011 general election.

With Kathy running the place, it became a super warehouse.  “We are an energy super warehouse,” said Kathy countless times. 

The New Energy Party even clipped this bit of Kathy from the House of Assembly for its website back in 2011:

Mr. Speaker, this Province is an energy super warehouse. We have what the world wants. We will bring it to market. We will supply our own people, Mr. Speaker, and we will earn from those resources for generations to come.

“We will supply our own people, Mr. Speaker.”

The 2013 SRBP Themes (Part 1) #nlpoli

The end of the calendar always brings the string of Best of, Top 10, and any other kind of year in review piece.  In the conventional media it’s the season of the interview with leading politicians.

At SRBP this year we did a Top 13 for ‘13 list.  It just ran through all the posts and pages that attracted the largest number of readers during the year.

You get a bit of a different picture of the year when you go through the posts month by month to see what turns up.  Patterns emerge that aren’t as readily apparent when you are reading them – or writing them – daily.

The 2013 Harbour Grace Affray #nlpoli

Kathy Dunderdale told reporters on Tuesday, while the polls were still open mind you, that the by-election results would be no big thing.

Life would go on. 

The world would turn.

And the Conservatives had two years left in their mandate.

That’s when everyone in the province understood that the provincial Conservatives had already conceded defeat in the Carbonear-Harbour Grace by-election.

Unfortunately for Dunderdale, though, the election result means something.  Here’s what.

The Importance of Appearing Earnest #nlpoli

Once upon a time, not so very long ago,  your humble e-scribbler noted the importance the provincial Conservatives placed on the appearance of things.

The idea came together neatly in a celebrity interview not by someone in the private sector media but by a representative of the state-run broadcaster.  “Government by Fernando” it’s called and it is worth going to read even if you read it back in 2006.

It will be worth your while since a front page column by Telegram editor Russell Wangersky this Saturday is likely to have the local chattering class chattering up a storm for the next few days.  You see Russell uses the column to tell Kathy Dunderdale that it is time she resigned. 

Stalwart Tories won’t care about Wangersky’s opinion anyway.  After all he is not one of “us” in whatever way they want to define “us”.  While everyone else in the province is likely to be taken up with the fact he called for her resignation, it’s far more revealing to look at why Russell thinks she ought to go and go now.

The Politics of Fashion #nlpoli

As it turns out, Corporate Research Associates president Don Mills had lots to say to the St. John’s Board of Trade besides a few guesses.

Newfoundland and Labrador can’t create economic booms in every nook and cranny.  Instead, we should focus on growth centres where people are moving anyway.

Such radical - dare one say revolutionary  - ideas. How blessed the Board of Trade members were to hear these comments the likes of which they have never heard before.

Surely.

Never heard the likes of it before, except for the 1992 Strategic Economic Plan.

The Decline of the Forest Empire #nlpoli

While an official with Corner Brook’s municipal government  understandably has to say wonderful things about the economy in the west coast city, a look at some numbers shows the city is feeling the effects of a larger problem in the province.

SRBP took a look at newsprint production levels and the value of newsprint exports from 2003 to 2012.  The numbers are all from the annual editions of the budget document called The Economy.

The picture is not pretty.

More on the 2009 Rift #nlpoli

The Kremlinology post on Trevor Taylor, Paul Oram and the apparent policy disagreement in cabinet in 2008/09 generated two contacts (a tweet and an e-mail) that are worth discussing.

Let’s take them one at a time.

Kremlinology 44: the 2009 Rift in Cabinet #nlpoli

Trevor Taylor left politics in 2009 in an unseemly hurry.

One minute he was there. 

Next minute?  Gone from cabinet and the House of Assembly.

Very odd.

Then right on his heels went Paul Oram, who muttered something about unsound financial management by the Conservatives as he ran from the Confederation Building.

A very big clue to what was going on at the time turned up on Tuesday in Trevor Taylor’s column in the Telegram.

Taxing the Imagination #nlpoli

What is it about the provincial Conservatives and income tax?

Kathy Dunderdale rabbited on about it last fall and again in January.

Last week, the provincial Conservatives were at it again, with a private members resolution in the House that praised the government for cutting taxes and for not raising them now that they’ve fallen on hard times.

The Transformation #nlpoli

Provincial Conservatives in Newfoundland and Labrador have a political philosophy that is equal parts Machiavelli,  Kafka, and the Three Stooges.

For the first few years they seemed to be constantly plotting and manoevring, always one step ahead of their opponents at home and abroad. 

Those days are gone, now, replaced by a surreal landscape of bizarre shapes and hideous shadows.

The Conservatives have already admitted to their continuing financial mismanagement of the province.  They admitted in 2009 that what they spend of the public’s money every year is unsustainable. They continue to spend like that even though the public cannot afford it.

Yet these same profligates attack their political enemies with the accusations that the opponents are financially irresponsible.  These same bankrupts defend recent cuts to education by pointing to their previous spending which they have admitted is unaffordable and which is the reason for the cuts.  They censor public documents and at one and the same time, crown themselves most open government the province has ever seen.

This heady mixture now comes to slapstick comedy, courtesy of Trevor Taylor.

Edging #nlpoli

Over at cbc.ca/nl, John Gushue has an excellent column on the recent prosperity, in particular the apparent contradiction between a supposedly booming economy and the government cuts or the sense some people have that they aren’t part of the boom.

Take some time and go read John’s observations, if you haven’t already.  You will always be rewarded by John’s accessible style that reveals some very sharp insights.

For all that, though, there’s a sense that there’s something missing from Gushue’s column.  The piece gets right up to the edge and then just doesn’t bring the thing to a satisfying conclusion.

Never fear.

The relentless labradore fills in the bit John missed.

Political Will and Public Policy #nlpoli

The SIDI simulation of government spending that we’ve run this past week might not be everyone’s cup of tea, but these sort of thought exercises are always useful.

The most striking thing is the amount of money from oil and mining that the provincial government has spent in the past seven years:  $15.6 billion.  That’s enough to wipe out the entire public debt plus the unfunded pension liability and have a couple of billion left over for an unprecedented capital works program. 

It’s a staggering amount of money and the only thing more amazing than how much money there was is how easy it was to do something far more productive than just spending all the money, as the current provincial government has done.

The SIDI simulation included:

• a steady, sustainable increase in spending each year,
• an unprecedented, sustainable capital works program,
• a $3.675 billion real decrease in public debt,
• the prospect of a complete elimination of public debt within a decade, and,
• an income fund that would continue to grow with further oil money and generate new income for the provincial government for as long as the fund existed.

The only thing needed to make the simulation a reality was a political desire to do it.  Had the provincial government done any one of the elements of the SIDI approach, then the provincial government could have either avoided the current crisis altogether or significantly altered the profile of the crisis and the prospects for coping with it.

Responsible Public Spending #nlpoli

You don’t need drugs or alcohol to get the feeling of dizziness or stupor like you smacked your head with a hammer. Hard. Repeatedly.

Just listen to a representative of one of the special interest groups talking about the provincial budget and public spending. It doesn’t matter which one.  As your humble e-scribbler was finishing off this post on Tuesday, a representative of the appropriately named St. John’s BOT was on television talking about how government had to cut public sector jobs and tear into public sector pension benefits because of the hideous unfunded pension liability. 

Corporate lawyer Denis Mahoney even quoted the distorted, misleading government claim about the unfunded liability as a share of only a fraction of the public debt to bolster his position. He never mentioned the billions going to subsidize his members, of course. 

In the process, Mahoney looked about as convincing as the labour mouthpieces like the Canadian Centre for Policy Alternatives who said in 2004 that the government wasn’t spending too much.  It just didn’t have enough money.  Of course, they never mentioned that the government was outspending just about every other province on a per capita basis.

Listen to this sort of mindless crap long enough and you don’t have to wonder why people wander around in a daze.

To clear your head, take a look at a chart showing the actual government spending from 2005 to 2012 (in blue) compared to the income from sources other than oil and minerals (in red).

Damn the finances! Full spend ahead! #nlpoli

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

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

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

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