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Monday 4 March 2013

What the Premier Must Do. A Budget Primer (Part I)

Like a Throne Speech, a Budget ought to reflect the Government’s philosophy and ideas about how revenue should be generated and spent.  It should avoid ideology, but it ought to reveal how the practices of one Government might be differentiated from those of another. In addition, the Budget should be guided by a set of principles that will govern its decisions regarding the deficit, debt, pension plan shortfall and other critical financial decisions with long term implications. When Budgets become more about choices than simply about more spending we will get to see whether it has more ideas than Muskrat Falls and fattening up the public service.

Whatever a Government’s priorities, there is no substitute for careful administrative and financial management, day-in-day-out.  The process of making small changes, achieving more efficiencies, strengthening programs and conducting executive management reviews is not the sexy stuff that attracts Reporters’ attention; but, it is exactly what, if understood by sensible leadership, will keep bad news at bay. 

Government by ‘splatter’, the process of giving everyone something, is not management, at all. 

Most people look to government for: a) integrity b) a Plan that sets reasonable goals, c) straightforward communication with the public, and d) periodically, a progress report on how it is doing.   
Anyone who has served at the senior level of Government understands just how easily its’ focus can be diverted.  It is a system replete with competing demands, egos and self-interest.  Usually, a couple of Cabinet Ministers can spot early problems and warn the “Boss”; adjustments are made, but, that happens only when the “Boss” is collegial, open minded and above all, confident.  If the ‘rot’ is further up the line, well…..

Politicians are not professional managers, though they ought to be capable of preventing the day to day spending of Government from ever reaching a crisis.  
How does a Premier prevent the Government from losing its way? 

A Government is like any other large organization with a broad mandate; if it has a good plan, it is likely ready for trouble spots, too.  If it has neither a written plan nor identified the essential benchmarks of progress, it is tantamount to expecting the ‘ship of state’ to navigate without a compass. 
This Government’s goals were never explained from the beginning, likely because the Premier saw her Administration as an extension of the previous one.  That one took in oodles of money and spent it with abandon.  Little wonder Danny might, forever, earn the appellation “Williams the Spender”.  For this Government, even Muskrat Falls, Dunderdale’s big single initiative with huge financial consequences, has been justified by several different rationales.  Where does one find certainty?  

Now, the Government must deal with a large Budget deficit.  With every group shouting “it is not our turn”, how can the Government “make it right”, without using the ‘buckshot’ approach, to cutting expenditures? 
The “buckshot” approach is one where the Premier or Finance Minister asks Departmental Deputies “to find a percentage of savings”, offering them little guidance, and none that speaks to the Government’s core values or how to do better with less.  At the end of the day, the Government will have no idea whether the so-called “fat” has been cut or whether it has merely achieved a temporary “fix”.  Whether essential programs have been unwisely neutered, ineffectual and unnecessary programs have been done away with or whether the process of determining ‘value for money’ ever received exhaustive consideration, will remain a mystery.    

Keen management, consistently pursued, speaks to a ‘culture’ of government and of the leadership; it is not a process that is arbitrarily instituted a few months in advance of a Budget.
The Premier has committed herself to something called “core program review”, but, that is a different process than defining how much government the Treasury can afford, setting priorities, goals and benchmarks or placing before the public a program of change.  This is the real stuff of government.  The public learns how the political mandate has been interpreted and of the changes for which their continued support will be sought.   

In terms of timing, it is too late to draw up a plan that ensures the Budget contains either imagination or a promise of real, measurable change.  But, the plan, itself, must be initiated even if the process will have to be carried beyond the Budget date.
What is the Premier to do?

Likely, the Administration does not have the right people to help her out.
From observation, few in the Cabinet or Caucus have demonstrated a capacity for a broad view of public administration or the ability to deduce the results of a particular policy change and how it might impact the public.  The most visible Ministers, have no policy orientation or serious communications skills.  That is not to demean them; but, profound change must be reasoned; the public must have assurance of consistent and coherent decision making by spokespeople of credibility. 

Of course, the Premier must listen to her elected advisors.  While none possess a working compass, the abiding fear is that she does not possess one, either. The Polls indicate she is not without popularity; she has a limited time to put that advantage to work.  
The Premier cannot rely on the three people who hold the most senior positions in the bureaucracy, the Clerk of the Executive Council, the Deputy Minister of Finance and the Secretary to the Treasury Board, a matter which I will discuss in a later Post. The Budget mess is proof neither has the Premier’s ear.  Afterall, it is not empire building or cheerleading, but credibility, that is the senior advisor’s exclusive currency.  

The Premier should look, outside of Government, for a small number of skilful people who are not conflicted by position or money; a group who will not engage in “nice” and who will have her confidence. 
The Premier needs people to whom she will listen, who are credible, frank as well as intelligent.  Finding an outside team of that calibre, one that will do so, even in the knowledge that its best efforts may be undermined by Muskrat Falls, will not be easy. 

But, that is what the Premier must do. 

Note: "JM" will return on Thursday with "Gnarley's Theory of Political Devolution".