Saturday, 2 May 2015

#NLBudget2015 - The Bigger Picture

#NLBudget2015 - The Bigger Picture
By: Ryan Young

“This budget is all about choices.” Quote Ross Wiseman, nevermore.

Nobody was expecting too much joy out of budget announcements at confederation building this week. With a projected 1.5-1.8 Billion (depending on who you ask) deficit, it would be hard to imagine too much coming down the pipes in terms of new spending. What actually came down was not really what anyone expected at all, but the general consensus is that for an election budget, #NLBudget2015 was a big miss.
The biggest “highlight” from the budget was a 2% increase of the HST from 13% to 15%. Despite the tax hike, the government will still run a deficit of just over 1 Billion dollars in this fiscal year, and many people are questioning if raising the sales tax was the right move. Corporate tax stayed the same, but that is not a big surprise since that will be where Paul Davis and the PC government will draw the majority of their spending for a fall (hopefully) election campaign. You would expect party unity, but even some hard line conservatives were speaking out against this years provincial budget, In fact Conservative senator David Wells said “While the Federal Conservative Government has lowered the sales tax from 7% to 6% to 5%, the provincial government has raised the provincial portion of the HST and pocketed the difference.”
Those are strong words from a federal senator who should be trying to mend fences with provincial Conservatives leading up to this fall’s federal election. Harper’s mantra, however, has always been to avoid tax hikes in favor of less social spending, and you can be rest assured that the PMO will not support any provincial government running large deficits for long periods of time.
Opposition leader Dwight Ball said that the Liberals would repeal the 2% tax hike if they were elected, but he did not offer an alternative to lowering the deficit. He called the HST a job killer and emphasized that raising the tax would be bad for business in the province.
Richard Alexander from the Employers Council said that we don’t have a revenue problem in the province, we have a spending problem. The current government certainly did not do a good job in terms of foresight and long term spending with the billions in oil revenue they had to work with.  It leaves many of us wondering; “Where did the money go?”
When you really think about it, for better part of the last decade the PC’s  have talked endlessly of being a “have” province. It has been the backbone of their continued political success after the departure of Danny Almighty,  but as Dale Kirby put it, we are now a “had” province. Sadly, there is a lot of truth to that that statement, but it does it have to be? Do we have to hang our heads like the poor working stiff who won the lottery and was broke in five years?  
The opposition Liberals, who still hold a comfortable lead in the poles, have yet to say what they will do to get us back to the glory days of “have” status. Frankly I don’t know if they can. Even a strong majority would only buy them four years before the spirit of the electorate will be broken by a government trying to maintain services with no money. The provincial debt will likely balloon under a Liberal government but what other option do we have? Even the Conservatives have been reluctant to make any major cuts to programs and services, at least not yet.  All the while, the vast majority of economists and policy makers that got us in to this mess shuffle their feet and pray for the return of hundred-dollar oil.
Surprisingly there were not many cuts to programs in the 2015 budget. Some jobs will be lost, many though attrition, but current social programs remained intact and some even received “new” funding. “New” being a misnomer as much of the money, such as funding for the Family Violence Intervention Court, is really just money being returned that was cut in the austerity budget of 2013. I can’t deny that things could have been much worse for social programs, but we still need a solid plan to deal with the plethora of social issues that we have in this province. We continue to throw band aid solutions at these problems instead of looking at and treating the underlying causes. We need a government that is willing to work with the community to create a real strategy for dealing with these issues.

While 3 Billion in health care spending was announced in the budget, including investments in private-public partnerships for long term care and new mental health initiatives, there will be big delays in new infrastructure programs under the health portfolio. Projects such as the new Waterford Hospital and the Gander and Bonavista hospital refits will be “temporarily” shelved but the government promised that they are committed to opening the new hospital in Corner Brook by 2018. With the number of seniors expected to double over the next twenty years we soon need to start planning for how we will care for our aging population. Many people are questioning the delays but the government says it just does not have the money right now for many new infrastructure projects.

This is not quite an austerity budget. Things like full day kindergarten, new school commitments, and a small increase into the provincial child care strategy budget help the government avoid the use of that term, but only just barely. NDP leader Earle McCurdy says that the government overspent when times were good and now the people of the province will have to pay for their mistakes. You can be sure students will be organizing in the wake of a 20 million funding hit for MUN, and labour groups are already organizing a march on Confederation Hill on Tuesday, calling the budget a “missed opportunity.” Whichever way you look at it, the fact that this is an election budget is a little scary. OK, maybe a lot scary. Conservatives will not run deficits for long, and you can expect that if oil prices stay low that big cuts will be coming in budget 16 or 17 if they are re-elected. The Liberals will likely run deficits to avoid cuts, although they won’t come out and say it...or anything. The NDP have been quick to criticize and have been fairly accurate in their assessments, but they have yet to offer a solid plan for fiscal solvency either. Perhaps there isn’t one. Perhaps we will just have to ride out the storm, and whoever we vote into the House of Assembly when we go to the polls this fall (again...hopefully) will likely only decide how far we run into debt before the price of oil rebounds or we end up in some other, darker situation. Something like a commission of government. A commission of government under Stephen Harper...They say history always repeats itself...How is that for food for thought?

No comments:

Post a Comment