A Bond Papers freebie

I knew Gerry and da boys were hard up, Trevor, but it's pretty bad when I gotta do the Liberal advance job just so I can kick the crap out of 'em on Tuesday.

The first 'Fun with Pictures' entry

The idea has been out there for a week.  We've had a hard time picking through the flood of responses but here's one that is surely going to be a top contender for the winning prize.

To avoid any repercussions to contest entrants, we'll be keeping their identities a secret, but to maximize your laughter, we'll be sharing the entrants creativity.

You can almost hear the guy saying telling Lorraine that the tyke's first words were "quite fwankwy".

Apparently he crawls, but only on a go forward basis.

Pretty soon he'll be shedding the pampers and doing his business on a go potty basis.

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The past in our present, once again

Finance minister Tom Marshall today raised the spectre of 1933 and the collapse of Responsible Government in Newfoundland. He did so in the context of launching an attack on Liberal leader Gerry Reid based on Reid's comments in Labrador which Marshall took out of context. Marshall said the context was irrelevant, just saying the word bankruptcy was bad.

Marshall raises an interesting point for anyone looking at this campaign and wondering whether or not to vote, let alone decide which candidate to vote for. If the Telelink/NTV poll is any indication, that could be upwards of half the electorate.

The incumbent Tories make much of the supposedly poor financial state of the province in 2003. it was largely a fiction, as much as Marshall's claim that there was $305 million in the current budget from the 2005 offshore deal. That little myth has already been disposed of. There is no money in the budget from the 2005 deal; there is merely a set of numbers put on the paper to show the draw down on the cash advance. But this money has already been spent. it does not exist as new cash this year.

So what would it take to bankrupt the province? Let's take a look at two examples from the province's history when financial circumstances were indeed tight.

The 1933 Debacle

- $100 million in debt.

- $30 million in government revenue.

- $35 million gross domestic product.

- $3.5 million government budget shortfall.

A decade of political instability characterized as much as anything else by a remarkably familiar style of politics:

"Rival politicians … in the desire to secure election, were accustomed to make the wildest promises involving increased public expenditure in the constituency and the satisfaction of all the cherished desires of the inhabitants. The latter, as was natural, chose the candidate who promised them the most.

“…the electors in many cases preferred to vote for a candidate who was known to possess an aptitude for promoting his own interest at the public expense rather than for a man who disdained to adopt such a course.

“They argued that, if a man had proved himself capable of using his political opportunities to his personal advantage, he would be the better equipped to promote the advantage of his constituents; an honest man would only preach to them.”

Not a single provincial party in the current election is speaking of debt reduction. Rather there is talk of spending increases and, where anyone whispers the word, debt management. That is code for rolling over debt at cheaper interest rates or, as Danny Williams has said, actually borrowing more money on top of the $485 million in additional debt the government has incurred since 2003.

In 1933, the government debt was three times the size of the provincial economic output. The total government budget was slightly less than the economic output and the annual budget was short by $3.5 million or $10 percent of its total.

That was the state of the place when the legislature voted to accept an appoint commission government.

Using figures in Budget 2007, it would be virtually impossible to repeat that scenario in the current context even if every government for the next decade was completely insane. Canadian fiscal transfers would forestall bankruptcy or anything as dramatic as the 1933 situation and most likely action would be taken long before the provincial government put itself into the 1933 state again.

Just to put it in perspective consider that in order to come close to the 1933 mess, the provincial debt, on an accrual basis would have to reach upwards of $70 billion compared to the $11-12 billion currently. The annual provincial budget would have to reach spending of almost $20 billion annually, compared to the $22 billion current gross domestic product (approximate, using current dollars). The annual shortfall would have to be on the order of about $1.5 billion to $2.0 billion.

The early 1990s

- Provincial debt approaching $8.0 billion on an accrual basis, significant amounts held in high-priced foreign currencies.

- Provincial GDP of slightly more than $8.0 billion.

- Low oil prices. (US$8 in 1992 compared with forecasts of a decade earlier that oil would be well over $40 and may reach as high as $100)

- Low mineral prices (mineral prices are cyclical and are currently high)

- Declining fishery (followed by cod moratorium)

- Low Canadian dollar.

- Government spending on current account of $3.5 billion (approx.) with annual declines in revenue due to economic circumstances.

To match that situation, the provincial debt would have to reach the better part of $22 billion compared to the current $11-$12 billion. Government spending would run at about $9.0 to $10 billion, assuming that current account spending was about 43.75% of GDP and the annual deficit would be about $1.0 billion.

That situation is not as extreme as the 1933 scenario by any stretch. Mineral prices are cyclical and will likely drop in the next decade and remain low for a period. Likewise, and based on recent experience, oil prices may not continue at their current high levels. As for the fishery, its future economic performance is not guaranteed either, especially in light of global competition and declining resource in some sectors.

If we allow for energy corporation debt on existing projects of about $500 million (acquisition plus development costs, before revenue flows )and a Lower Churchill project of approximately $5.0 billion, the current provincial debt would reach about $17 billion.

As an aside, the Lower Churchill project website has now been taken over by NL Hydro. As a result background documents on the consultation process have vanished to dead links. Those dead links contained project cost estimates.

Taken altogether, the prospect of imminent bankruptcy for the province is remote. Even allowing for added debt over the next decade coupled with an economic downturn, it would almost impossible to conceive of a realistic scenario in which the 1933 situation recurred.

The situation in the early 1990s is not quite so remote but it would still take a concerted effort to undo the economic progress of the last 15 years.

The cost of developing the Lower Churchill and offshore projects would not decline significantly in the event of an economic downturn, for example, but resulting revenues would. As such it is possible to develop scenarios in which the provincial debt climbed to levels significantly above their current one, while at the same time, the size of the economy and resulting government revenues did not increase as dramatically or even declined.

Consider that Budget 2007 forecasts a decline in the provincial gross domestic product over the next three years while at the same time forecasting increases in government spending on the order of over nine percent in the same time frame.

This is a very rough comparison of two historic incidents with the current situation. No matter how one looks at it, the prospect of the province becoming bankrupt within the next decade is remote.

That's part of what makes Tom Marshall's comments odd. After all, if the provincial economy and government finances are so fragile that a mere $100 million of spending annually over a decade would break the treasury, his comments only raise questions about his own plans to borrow and spend considerably more than that in the same time frame.

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Federal election in early December?

There are signs.

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One to watch

They may have a small budget but the NDP campaign is innovative.

The NDP will be worth watching to see how effective it is.

One thing for sure: they have the best radio spots so far, bar none. Unfortunately, there's no link to the audio at time of writing. As one comes available, we'll supply it.

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Fun with pictures, more fodder

From the PC party campaign website. 

Remember, photoshop if ya want, but these seem to be more likely candidates for witty captions.

 

Fun with pictures, some more

Here's a better Lorraine Michael picture to use. From the NDP campaign website. Keep the entries coming. There's nothing to win but recognition for your bizarre sense of humour.

Remember: Just photoshop if you want to, or preferably just give us a caption. And keep it within the bounds of taste.

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Dicks apologizes, promises to repay

Paul Dicks, the man whose expenses caught the attention of former Auditor General Beth Marshall seven years ago, today apologized for what he described as lapses in judgment.  Dicks promised to repay the taxpayer for expenses claimed for wine and art purchases.

For her part, Marshall turned a blind eye to hundreds of thousands in inappropriate spending in her pursuit of Dicks.

In a recent interview, Marshall said she found nothing inappropriate in members of the legislature handing out public money as gifts to constituents and donations to groups and individuals who were never publicly identified.

Marshall's successor found that the gifts and donations often duplicated existing government department programs, although the money handed out through the House of Assembly was entirely at the discretion of the politician involved.

Elected in 2003, Marshall handed out 34% of her constituency allowance as gifts and donations.  The allowance was intended to cover other things, instead, although members of the legislature routinely spent the money in a manner Marshall's successor and a public inquiry deemed inappropriate.

This allowance is for the payment of expenditures incurred in the performance of constituency business and may cover such items as office rental, equipment, supplies, secretarial and other support services, information material such as newspapers, advertising, purchase of flags, pins, etc..

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The Top Five most irresponsible comments uttered by a political leader in Newfoundland and Labrador

It'll take a while to dig into the files for some of the geriatric whoppers in local political history, but the past four years have been replete with irresponsible  - in some cases downright frightening - political comments from at least one political leader in the province:

1.  The hands down winner: Taking away free speech in the House of Assembly.  Joe Smallwood may have brought in the anti-IWA legislation but not a single political leader in Newfoundland and Labrador history ever said it would a good idea to stamp out free speech in the legislature.

2.  Close second: The threats to sue people exercising their right of free speech, a threat that included falsely attributing motives to the people he threatened.

3.  Par for the course:  Repeated, unfounded personal attacks, all of which the leader in question had to withdraw.

4.  This mill will not close on my watch. A quote so much ingrained now that people don't even need a reference to it. And before someone leaps in here, let's recall it is fundamentally irresponsible to make a commitment you just can't guarantee you'll be able to keep.  Like saying no more secret deals and no more give-aways. oh wait.  Those last two are within a leader's power to keep.

5.  Labrador:  the minute land.  Rationalizing why he left his lone backbencher from Labrador out of his first cabinet, the man who set the new standard for irresponsible political commentary said this whopper:

"You can't have it both ways," he said. "If you're going to cut the cabinet back then obviously certain portions of the province, minute portions of the province, can be left out." — Danny Williams, Canadian Press, November 7, 2003

There's a reason the Tories like to keep erasing their online record.

And why some people regularly archive the utterances.

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Told ya

Weather forecasting in Gander.

Big political issue a couple of years ago.

Bond questioned the motivation of the people behind it.

Turns out we were right:  it was about pork.

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The advance polls

The top 15 districts in the advance poll, shown as a percentage of eligible voters who turned out in each district.

 

District	Percent advance (07)	Percent advance (03)
Signal Hill – Quidi Vidi	4.9%	2.5%
Carbonear – Harbour Grace	4.0%	7.2%
Port de Grave	3.3%	4.7%
Exploits	3.3%	2.7%
Lake Melville	3.2%	2.7%
Humber Valley	3.2%	4.1%
St. John’s East	3.2%	2.5%
Torngat Mountains	2.9%	2.6%
St. John’s West	2.9%	3.6%
St. John’s South	2.8%	2.3%
Gander	2.7%	3.6%
Topsail	2.7%	2.9%
Cartwright – L’Anse au Clair	2.7%	2.1%
Labrador West	2.7%	2.8%
Mount Pearl North	2.6%	2.9%

What does it mean?

Well, your guess is as good as any.

One thing seems obvious, though and that is that the special ballot process likely hasn't replaced the advance poll turn-out.

Special ballots existed in 2003 and all parties used them aggressively. The advance poll turn out in this election was down 31% from the last time.

That actually reverses dramatically the trend from the previous two elections, in 1999 and 2003, where the advance poll turn out climbed each time.

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The smell of desperation

Danny Williams came within a hair of promising a cabinet seat for Patty Pottle if the voters in Torngat Mountains would elect her as the MHA.

That's about as pathetic a gamble as it gets; there really is no other word for it.

Normally, that sort of thing is the hint dropped by desperate candidates trying to hang on to a seat. Normally, when a candidate resorts to spreading that rumour - always denied by the Leader for a whole bunch of reasons - it's a sign that all hope has gone.

Now when the party leader who is the Premier starts running around openly promising he'll pretty much surely plunk Patty in a cabinet seat, you can bet two things:

1. He's reasonably sure his current Labrador cabinet minister is toast.

2. he's desperate to have a seat on the mainland that he is prepared to promise anything to get it.

Might be a clue to voters everywhere.

If you want Danny Williams' attention: elect an Opposition MHA.

But seriously, it is long since past due for political reporters to stop spreading the campaign executive jet spin.

Wipe the Kool-Aid from your lips. brush the salmon flecks and cheesecake crumbs from your lapels.

Put the Premier's run through Labrador in perspective. It isn't about taking seats away from anyone.

It's all about desperately avoiding losing the two seats in Labrador the Premier's already got.

The run is Torngat is actually beyond desperate.

It's pathetic.

As pathetic as another Premier from another party running around claiming that Kilbride and Ferryland were going red.

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Mark Critch: deadly

Mark Critch's two-minute send up of Danny Williams will either:

1. Make lots of people laugh;

2. Incite some loons to follow a fatwah against Critch who will now be regarded as a traitor and heretic; or,

3. 1 + 2.

Audio available courtesy of the CBC campaign blog.

Video available at the 22 minutes site.

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Campaign fun

Simple enough.

Take the pictures below, and/or add a funny caption.

Photoshop them (within the bounds of good taste), e-mail your submission to bondpapers at hotmail dot com and we'll post them.

"On a go forward basic, quite frankly, I'll be working to get the partridgeberry muffin back on the menu at every Tim Horton's in the Federation."

"Now when I blink my eyes, the election will be over and the Liberals will be back in government. It's a trick I learned from Jeannie."

"I did kick his butt, didn't I?"

[Photos; shamelessly taken from the CBC campaign blog, Campaign Trail]

The Galahad List

Of all the MHAs who served in the House of Assembly after 1989, only six - that's right, a mere 6 - fell into the category of having made no donations, submitted no double-bills, bought no booze outside of meals, and made no personal purchases on public funds. There were others who had negligible amounts of donations or double-billings, but the following six stand out for their relative purity.

Their chastity - the other distinguishing virtue of Sir Galahad - is a matter on which we offer no opinion.

For the record, the six are (alphabetically) :

Charlie Brett

Felix Collins

Shannie Duff

Rex Gibbons

Barry Hynes

Ed Roberts

Two of the six are running in the current general election (indicated in bold).

Should be interesting given that Gibbon's Progressive Conservative opponent made another list from the AG's report.

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Leader's Tour Logic: update

Grit leader Gerry Reid is heading along the province's south coast in an effort to shore up support in two districts currently held by the Liberals.

Meanwhile, Danny Williams is headed back to Labrador for a whirlwind through all four districts. This is the second trip to Labrador. The Tory incumbents need shoring up in western and central Labrador and there is a race in Torngat Mountains.

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A few questions that likely won't get answered

Political party election platforms have become less about a firm set of commitments as about a set of general ideas that might be implemented, depending on what happens.  In some cases, they are just window dressing.

Working from the premise that platforms actually mean something, there are a few interesting bits of the progressive Conservative platform that are worth pondering:

1.  If the commitment is based on a false premise do you still mean it? 

demand that the Government of Canada situate more federal offices and jobs in Newfoundland and Labrador, which has fewer per capita than any other province

Newfoundland and Labrador actually has more jobs per capita than all but three provinces.

2. And what about the National War Memorial between Water and Duckworth Streets?

work with the Royal Canadian Legion and military families to establish an appropriate memorial in Newfoundland and Labrador to honour our soldiers who have served and sacrificed their lives in the Afghanistan mission

3. So are you saying the provincial government doesn't manage our collective wealth now?

put in place a plan to enable Newfoundland and Labrador to develop the capacity to manage our own wealth within a decade, in coordination with Memorial University, College of the North Atlantic and the Newfoundland and Labrador investment management community

Just what the heck does this mean? 

4.  So what happened to a debt reduction strategy, in light of four years of debt growth?

further develop our debt management strategy to continue to eliminate the debt and refinance existing debt with competitive rates

5.  But is there an amalgamation strategy?

maintain the commitment that there will be no forced amalgamation of municipalities but continue to work with municipalities on initiatives to share services regionally

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More fun with signs

Yes, there's been plenty of fun with campaign signs.

Some people have been tearing them down.  That's the sport in Mount Pearl. Others have been pointing out the missing bits on some, like Beth Marshall's lack of a Team Danny mention. Turns out those were recycled signs from the last campaign, just like the Tom Osborne "member" ones.

Well, here's brand spanking new sign, complete with the strong, proud, determined graphic that is missing any reference to Team Danny as well.

Of course, it would be hard to get it in there, what with all the references to the glorious things John Hickey has done for Lake Melville in just four short years.

But surely, they could have found a spot to poke in the graphic showing that  Hickey is a proud member of the Danny Williams Team.

On another level entirely though look at it this way:

Hickey is focusing on the cash flowing to his district,  in the fine old tradition of local politics in this province.

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Hilary and Janice and Danny

Hilary Clinton wants to give every child born in America $5,000.

Danny Williams thinks this is proof he is on the right track with his $1,000 bootie call.

She isn't and therefore, he isn't.

The $5,000 Hilary is talking about is actually part of a larger Democratic Party initiative aimed at health care reform and promoting education.

It is not intended - as the Bootie Call clearly is - as an incentive to parents to crank out more offspring.

The Democratic Party initiative very clearly establishes that the money will be placed in a trust and will be accessible for two specific purposes:  college tuition or buying a first home.

It is not intended - as the Bootie Call clearly is - as an incentive to parents to crank out more children.

How bad an idea is the Bootie call?  Well, consider that most men and women in the province have already dismissed the idea based on two simple premises:

1.  It doesn't even begin to cover the costs of raising a child, including education costs; and,

2.  Everywhere it has been tried it has turned out to be hugely expensive and at the same time hugely  ineffective in increasing the birth rate.

The Bootie Call is such a bad idea that even columnist Janice Wells had to morph the whole thing into a discussion of the virtues of cloth diapers before she could make it into something vaguely workable.

This is no mean feat.  Wells is a former Tory candidate and has been known to monger a few nationalist myths in her time of public comment especially since Williams was sworn in as Premier.  For her to cast some doubts on the idea is pretty significant, even if she has to go through a few tortures to salvage the concept.

All of this leads inevitably back to the starting point of the Bootie Call discussion and the admission Danny Williams made the day he announced the concept:  it hasn`t been thought through.  That`s painfully evident and it grows more painfully obvious when Williams himself and his supporters - like Janice Wells - have to invent reasons to give it some consideration.

If Danny and Janice really want to do something for our future generations, maybe they wouldn`t be trying to come up with lame ex post facto rationalizations for someone`s brain farts.

They`d be doing the planning Williams likes to talk about in his campaign ads. Then they`d turn the plans into action to deal with things like the growing debt load our children will face, a debt load that is likely to made worse by the inevitably burgeoning cost of the Bootie Call.

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The Open Cheque-book Government

Danny Williams recently accused Gerry Reid of planning an open cheque-book government.

For the record, here is the public sector debt since 2003, as contained in the provincial estimates for 2007.

Table 1: Public Sector Debt FY 2003 - FY 2007(f)

Source: Dept of Finance, Budget 2007, millions of CDN$

	2003	2004	2005	2006	2007f
Direct	6692.7	6581.5	7244.0	7069.5	7306.5
Crown	2404.1	2885.8	2657.4	2660.4	2666.9
Total*	8007.1	8345.2	8644.4	8355.6	8496.4

* Total is Direct and Crown debt, less sinking funds

Since 2003, the total public debt has increased by $489.3 million. Direct debt increased by $612.9 million. This continued the trend for the previous four years.

In the same time, the provincial governments net expenditure (capital and current) rose by 35% ($1.307 billion) from $3.674 billion to $4.981 billion.

Gross expenditure (capital and current) rose 30% from $4.261 billion in FY 2003 to $5.560 billion in FY 2007.

This is significantly beyond the annual rate of inflation for the province, which averaged 2.275% between 2003 and 2006.

At a speaking engagement in Corner Brook:

Williams ridiculed Reid’s business sense, comparing his understanding of the oil industry to the popular U.S. TV show, “The Beverly Hillbillies.”

“This is not Jed Clampett, Gerry. This is big business.”

Funny thing about that attempted slur is that Jed Clampett was actually a wily, sensible and conservative gentleman.

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