Monday, 26 March 2018

OSBORNE'S BUDGET BAKED LONG BEFORE TUESDAY

If prudence was ever a word in Tom Osborne’s lexicon it was likely extracted as a condition of accepting the Finance post. Profligacy, now known in this province as status quo, is a more likely fit when the Minister delivers, on Tuesday, the seventh deficit Budget in a row.

Ask public sector labour. Ask the health care sector. They know there can be no change because their fiscal arrangements — which represent a very high percentage of total budgeted expenditures — have been carved in stone.
Then there are the Polls. When the Premier’s popularity climbs amidst a refusal to acknowledge a fiscal crisis — one that grows each day — it might be right to suggest that the public, too, is content to leave the pain for someone — anyone — else.  
It is possible that other factors are at play; that what is really influencing Ball’s polling gains is a Tory leadership vacuum. But I’m not so sure about that. 
More likely, the public is refusing the leadership the Premier expects of them, for which he doesn’t have the courage either!

In case you were thinking of taking a side bet on Osborne at least talking up austerity, especially in the healthcare field, don’t.

You need to have attended a recent Forum on health outcomes and health care costs entitled “What Can We Afford?” organized by Memorial University’s Department of Economics. No health care group — and I mean nil, nada, not one — took responsibility or offered a way to cut costs. The Forum was like La La Land attended by drug pushers, except the opiates were missing (I think).

The NL Medical Association acknowledged that there were fiscal challenges, but stated candidly that leadership must first come from government. The head of the Registered Nurses’ Union told the Conference that the best solution was simply to hire more nurses. The Pharmacists said that they were already responsible for employing lots of people, and the system would be better if we let the Pharmacists join the GPs as unguarded gatekeepers of the health care system. 
Neither the CEO nor the Chair of Eastern Health attended. It was left to Dr. Pat Parfrey — whose “Choose Wisely NL” campaign emphasizes fewer needless tests and drugs — to offer the only antidote to the Forum’s nausea. Does anyone in health care think fiscal crisis? Don’t be silly. 
Yet the health care field burns up $3 billion of the $8 billion Provincial Budget. More accurately, it represents about 50% of what the government’s operating expenditures should be; what's sustainable. 
Only at the coffee counter did anyone whisper the need to reduce “infrastructure”. That’s code for closing some hospitals and curtailing services in others. The squeal of the fan belt on the Health Minister’s getaway car provided certainty that he would not be engaged in that kind of blasphemous small talk. He cited a “legal” obligation to be in the House of Assembly — as if anyone believed him.
When bureaucracy and entitlement to inefficient healthcare are inviolate, a status quo Budget can’t — won’t — bring expenditures of $8 billion down to $6 billion, ever.  
With no hope of surprises, what should you look for on Tuesday?
Keep an eye on the deficit in the Current Account — the biggest indicator of fiscal sanity. The Minister’s Fiscal Update last October projected a deficit of $852 million. 
Then there’s the Capital Account; the category to which voters will rush, ostensibly because they think of governments as money machines. 
Borrowing for the Capital Account should be down from last year, considering the government’s move to public/private partnerships (PPPs) and falling Muskrat Falls activity. The risk is that with an election in eighteen months or so they will want to have their cake and eat it, too.
The other number to keep an eye on is the interest on the debt. Last year it was just under $1 billion; second place to health care. If public servants who legitimately expect a pension at the end of their working career want a barometer for worry, this is it. Problem is, they have already been told by NAPE and CUPE to look the other way.
The very best bits of Budget minutiae will include the province’s Net Debt and Total Debt.  In reality, they are the same.
The forecast Total Debt to the end of March 2017 is $17.5 billion. But the Government says that figure includes $6.2B Nalcor and utility debt which it deems “self-supporting”. We know that isn’t true. Ball is talking about the need for “rate mitigation”. That’s called subsidy which we can't afford which invokes the term “write-off”.
With all hope of fiscal prudence dashed, the Finance Minister would do his province the best service if he engaged the Feds over the Federal Loan Guarantee - now.
Unlikely as that prospect sounds, he should announce a Task Force whose sole purpose is to negotiate the “inevitable” process towards “write-off”.
Sooner or later, the Feds will have to pay for their complicity in the Muskrat Falls’ sanctioning. It will be cheaper for all if it happens sooner.
That might not sit well with Liberals partisans who want the relationship with Justin to remain meaninglessly cozy. But, as a skilful politician, Osborne must know that if the Liberals fail to look after the exigencies of politics – the local kind - Muskrat will dog them for as long as it will be a drag on the Tories. 
The Minister ought to understand the challenge that unwarranted costs give to all families. From a relatively large family himself, he should know that nothing could be crueller than to let ordinary people play defense with investments in mini-splits, heat pumps and a raft of other alternative (and expensive) strategies when continued decline in demand for electricity - from the grid - will require revenue compensation some other way. The Liberals’ unwillingness to start a public conversation around the need for "market-priced" power and how it can be achieved is heartless. It is reckless. It is a cruel game that has to stop. 
It does seem counterintuitive that the Feds would accede to any request for “write-off” of the federal loan guarantee while we refuse to help ourselves.  
However, Tom Osborne Budget won’t have much room for any other innovation. Still, he must know that there is no prize for authoring the province’s seventh consecutive deficit budget. 
History won’t be kind to profligacy; but courage has a chance. 
Except that a status quo Budget leaves little room for any of that. 

16 comments:

  1. What I can confirm - is that the Trade body representing a significant number pharmacy owners throughout Newfoundland and Labrador - business people - were not invited and we had pages of ways to save money in health while improving health outcomes. We had and have better ways to serve front-line health and save money. Wade Locke made sure that we were not heard. Our research and information is second to none in the Country and we have done our due diligence but the owners of Big Chains and mass retailers got their way with our health care dollars - sailing out of the province. I had the opportunity to talk to Wade Locke regarding Muskrat Falls - just after his report on it was complete. I emphatically told him he was wrong and that it would ruin his reputation. He didn't like my commentary. Fortunately there were several professionals in the room that witnessed it.

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    1. Sue, can you publish an outline of these cost saving measures and an estimate of the potential savings? Do these relate to having pharmacists provide minor medical services rather than being simple drug dispensers?

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    2. No doubt when the Muskrat's sh!t hit the fan, Wade got splashed with a face full.

      And that substance just doesn't wash off.

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  2. Don't look now but the Feds are in trouble too- now owing over a trillion in debt and interest rates rising. If sanity don't return to Ottawa after the next election, we're screwed. Most of the provinces are up to their necks in debt as well with Ontario and NL the basket cases. The only two provinces doing well are Quebec and BC. Ironically the same two provinces blocking Alberta oil from going east or west.

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  3. I would like to see a list of all the services that the public currently gets from government, and another list of medical services. These should be sortable by cost and the number of people that use that service. The public could then rank them (voting on a web site) as to what they feel is important. Then, we set a sustainable budget and see how far down that list of wants/services it takes us. I think the result would be a great staring point for a realistic budget that the public could support. I also feel it is improper to suffer austerity while the perpetrators of Muskrat Falls aren't in cages.

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  4. I can put together a document for online - it is not only expanded scope but the Pharmacy Network debacle, professional fees used properly, not allowing pharmacy to be used as loss leaders, outside the province dispensing, and regulations. It also includes the value and cost savings of having pharmacist owned dispensaries. The generic drug regime and brand drug costs. The errors in studies by the Fraser Institute that has essentially caused the destruction of the generic sector.

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  5. Was there any talk at this health-care forum about charging a nominal fee on those with a BMI over 30 for visiting the doctor?

    Or bringing in a stiff "fat-tax" on all fast foods, packaged junk foods, soda pop and sugared fruit-juice?

    Or implementing a tax rebate or similar government subsidy on gym and rec centre memberships and sporting goods?

    Because as long as the horrendously excessive numbers of morbidly obese NLers continue to live their sedentary lifestyles while gorging themselves on a diet consisting mainly of sugared fats and deep-fried salt, all washed down with copious quantities of soda pop and sugared fruit-juice... then yes indeed, health care costs will most certainly continue to use up a significant portion of provincial operating expenditures.

    On a related note, it has been consistently observed that an ounce of prevention is generally worth a pound of cure.

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    1. Anonymous 11:12 You may wish to read this:

      juanita.mercer@thetelegram.Carrot Rewards app helping
      Physical activity increased 29 per cent among least active users

      The Telegram (St. John’s)26 Mar 2018BY JUANITA MERCER com

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  6. Proper bloody thing...

    http://www.cbc.ca/news/canada/newfoundland-labrador/nl-government-nalcor-energy-breakup-1.4593006

    Now... government needs to dismantle that colossal Williams era monstrosity lock, stock and barrel, and sell the entire works off to the private sector.

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    1. Follow the comments on the Boondoggle II!

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    2. Yes, rumour has it that Dracula will be removed from it role as in charge of blood transfusions, in tomorrow's budget. A good move thank God, should have not been in charge for the past ten years and more, may have prevented muskrat all together. The first step in slaying the dragon, that government created and had no control over. Of course we also called him Frankenstein. So just wondering if Dracula - Frankenstein did permanent damage to the patient that has been on life support for at least the last seven years. Oil money rolled in for a decade, yet, this is our 7th. deficit budget in a row. And the other number that the dragon spit out is the 1$ billion required to service our debt annually. So the numbers may be, 1, 1, 7, 13, 17. One billion $ annually to service our 17 $ billion debt, with a annual deficit of almost 1$ billion, for 7 years in a row, and the boondoggle of almost 13 $ billion. A pretty picture I might add. Yep, we only talk in billions now. With Dracula, in charge of muskrat, and our hydro facilities only, he might die a natural death, from natural causes. The blood money will have dried up. Says Joe blow, - AJ.

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    3. Right on AJ, good analogy...

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  7. I hope this Minister of No Low Carbon Energy has a phone link to Winston, and will soon appoint him to the task of "No Baseboard Heat"

    http://www.thetelegram.com/news/local/newfoundland-and-labrador-natural-resources-minister-not-addressing-nalcor-breakup-196658/

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  8. Byes,

    Remember your history, and how we all got here, and the reason to celebrate Apr 1st.

    People like Bradley, Ewart Young, Scammel, Horwood, Power, got the ear of Joey about a 3rd option on the Ballot at the Referendum in '48. Sure the Merchant class, Catholic Diocese, Knights, and establishment elites pushed Crosbie and Cashin, other anti-confederates to deny the people the benefits of joining Confederation. Following 1 April, 1949, it was the Merchant elites who benefited immensely. We need to all pull together, (Heave away m'byes), to make the Federation work better. Cut out the negative sniping. Let's make a better rapprochement with our Indigenous and Canadian neighbours. A better deal with the powers can do wonders for our grandchildren. Go Canada, including NL!.

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  9. I see it was a "Steady as She Sinks" budget. Next one should be the same too. The "Dooozy" will come after the next election. Tie down any loose coppers folks.

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