Wednesday, 10 April 2013

TOM OSBORNE and LANA PAYNE on Different Pages

In a Telegram story by James McLeod, Saturday April 6, 2013, “MHA says deep budget cuts could have been avoided”, based upon an interview with Tom Osborne, the Member could not have better revealed the origins of the current Budget mess: 

“Sitting around the caucus table in 2008 and 2009, we were talking as a caucus that there was going to be a decrease in oil production, and a decrease in oil revenues, and the Atlantic Accord transfers were going to run out.  Yet the Budget continued to grow.  That’s the point that I’m making”, he said. “With the proper management, we could have been in the position where we had a slightly smaller budget without having to make the cuts today”.
There are those who think Government money is different than what you and I spend; that it has a pedigree that makes it special.  They want to join the legion of Governments for whom only the bondholders possess an ability to apply the fiscal brakes.
Lana Payne subscribes to the, spend, spend, spend idea, too (funny how well socialist ideology can blend with Tory incompetence). In fact, she believes the Government doesn’t spend enough.  Leaving Tommy for a minute, flip over to page A21 of the same Telegram Edition, we are treated to Lana’s Column: ‘Newfoundland and Labrador: Welcome to Austerity’.  Payne thinks, not only that the cuts may be the wrong ones (she might be correct on that count), but that the Government should not institute cut backs at all.  In other words, for the current Tories, as it is for Lana, it is acceptable to pile up public debt and to steal from future generations. 

If you have paid attention to the ‘structured’ bankruptcies of Greece and Cyprus or to the severe challenges that Spain, Italy and other countries are facing, you need no reminding that debtors expect to be repaid and that a Government’s inability to pay them causes enormous social and economic grief. Yet, Ms. Payne states, “In Europe, the harmful and devastating impact of austerity is driving up unemployment to unprecedented levels”. I ask: who is going to lend to these countries, after years of irresponsible management, debt levels in excess of 100% of GDP and an unwillingness to strengthen their institutions to collect taxes equitably. For most of them, austerity is the only alternative to bankruptcy.  They do not have the option of more spending.    What a position for a Government to be in!
Payne further comments: “The cuts also contradict past government strategies and goals:”  The only other Government in NL history that has enjoyed the fiscal room to double public spending over the last decade is the Williams Administration; that is the source of the current problem.

Let me draw your attention to the point that Osborne is making.  He, having been inside the Tory Caucus and Government for many years, confirms that Dunderdale and Co. knew, all along, that there would be a day of reckoning; that NL would experience lower oil production numbers, elimination of the Atlantic Accord transfers and gee, that oil prices are volatile!  Of course, we knew they knew; an acknowledgement he has merely underlined!
Lana Payne is fundamentally no different than this bunch of Tories; she sports a different political ideology (though, I’m not really sure if the Tories have one, these days); but, like the Tories, she advocates a similar spending prowess.  It is rhetoric, of course, but what is the value of empty rhetoric to a laid-off public servant?
Ms. Payne states that, “The government ought to know that there is a problem with theories.  It is a nasty thing called reality”.  I will only give her this much: paring staff, within an organization, whether business or government, is no easy task.  Ensuring that the quantity and type of skills are present, to guarantee a minimum standard of service, is a very complex business. It can’t be hacked at like Kennedy did in the Department of Justice.  It can’t be dealt with by the rhetoric of a union politician, either.

A professional public service does not need to be a bloated public service.  Public servants deserve more respect than this condition implies.  Government bureaucracy should be expanded slowly and trimmed, if necessary, at the same slow speed.  When do mass lay-offs not damage an economy and society? 
Then, there is this part of Osborne’s comment: “With the proper management, we could have been in the position where we had a slightly smaller budget without having to make the cuts today”.

These remarks are heading in the direction of common sense.  Unfortunately, we can’t credit him with having helped contribute to a better outcome.  If the personal anguish, suffered over the past few weeks by public servants, can’t teach us that failing to perform good budgetary practice, that thoughtlessly fattening up the public service is wrong, or that the uncertainty of resource revenues demands stronger fiscal managers than we have elected in recent years, when are we ever going to learn - when we mirror Greece or Cyprus?
I wonder if Ms. Payne thinks that the deficit in the public service pension plan is even a debt at all; one that has to be paid, no differently than what is owed to the bondholders. Does she not know that some of those public servants may even be some of those bondholders?   Perhaps, they should check the mutual funds in their RRSPs.

Anyway, Tommy, if you are thinking of joining the NDP, you had better check some of those ‘old’ Tory ideas with Lana Payne, first.

3 comments:

  1. I find your words insightful and apty applied.
    Good judgement, applied correctly on a timely basis, is a process little utilized by those with personal agendas.

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  2. the economist Paul Krugman has made the point that the situation in Greece is much worse than the situation in Iceland, even though the genesis of the issues are the same, as Iceland simply allowed its banks to fail, and absorbed the impact on its currency, as opposed to its citizens.

    We have fewer options, when the collector comes.
    We've taken windfall profits and pretended they were annual revenues, and then offered a confusing melange of statements about our status vis a vis equalization as a substitute for honesty about our discretionary resources. This will be recorded as the greatest opportunity lost in our history. Everyone involved should apologise.

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  3. Somewhat disingenous on Mr. Osborne's part. I wonder if he could elaborate on the number of district people he managed to stuff into the public service while he was in the position to do so. It was a lot.

    Meanwhile, he will do what suits HIM best. If Justin Trudeau creates a buzz that translates here and provincial Libs get a good leader, Tommy may go Liberal - that opens prov and fed options for him. If he sees NDP as his chance to keep his townie seat, he'll go NDP. If a new leader shakes up the PCs, he may go back into the fold as a 'fresh' face. Either way it's all about Tommy Boy's chances to collect a cheque and possibly be part of a little club again.


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