BUDGET PROTESTS: CHECK THE BULL COMING FROM THE BULLHORNS

People are understandably outraged over the recent provincial Budget. Fiscal mismanagement and the debacle that is Muskrat Falls has kicked them where it really hurts; in their pocket books.

The Government of Dwight Ball is seeing the face of public rebuke. Public protests, angry calls to Open-Line Shows, and disenchantment exhibited on social media, depict government’s failure to meet public expectations. They include those which the Liberal Party created during the general election campaign, and an ill-advised Budget that hurts low incomers disproportionately, and the middle class, as it ignores bureaucratic bloat generated by a decade of over spending. 

Ball has not performed the job for which governments are elected. That is he has failed to define the problem, elicit public support, and make the tough decisions to resolve it. 

Still, the ubiquitous anti-Budget signs make no reference to a fiscal crisis. 

That is unfortunate because they mirror the Government’s own inability to articulate the sheer magnitude of our fiscal challenge. We can chant: “SAY NO TO AUSTERITY” as it pleases us. But, realistically, we waived even the mere possibility of avoiding painful change when so many of us cheered Tory fiscal madness. 

At the outset, the very fact the protests are happening is a source of relief. Protest is an integral part of communications between the Government and the electorate. I feared we had lost it to Facebook and Twitter; that our decade of contentment had robbed us of the ability to physically participate in a call to action. I still wonder if it has legs. It would be awful to suffer economically, and to be passive, too. 

There is one other point that deserves early mention.  People are angry the Liberals lied about their campaign promises. Didn’t just about everyone lie, the Liberals, the Tories, and the NDP? Didn’t the public willingly participate, too? Those, including Dwight Ball, who say they did not realize our finances were so desperate, may need reading instruction of a kind removal of the HST, on books, will not help.

The Government wants to reduce a bloated public service by attrition. It wants to keep individuals on the public payroll, even if they are performing superfluous functions or if poor management has five people performing the work of four. That inherently doubtful approach might have been possible with easy money from oil, or absent Muskrat Falls. But the additional debt the province must raise, whether the project proceeds or not, threatens to make the total debt unmanageable.

So, we might ask: when are we going to deal with the cause of the crisis at its core? 

The Government confuses the message of crisis by funding things such as full day kindergarten and more money for design of an impossibly expensive Corner Brook hospital.

The people behind the bullhorns won’t rebuke these initiatives. They would have you believe we can continue to have it all; that we can cut the levy, keep every person on the public payroll employed, and increase service levels, too. That is not just disingenuous; it is untrue. One of the few things on I agree with Pierre Elliott Trudeau is that people should stop expecting government to be Santa Claus.

This ‘holier than thou’ stuff doesn’t play well, anyway, when we have been unable to balance the books since 2012-13 and have recorded some massive $2 billion deficits during that time. The truth is that the cuts haven't even begun; they have merely been deferred.

Still, people are justifiably angry. What is there not to understand about cumulative new taxation of $6,000 or more annually for a two-income family?

Most everyone, except the Government, gets that. 

But, equally, what is it we don’t understand about the Minister of Finance having raised $860 million from all the new taxes combined, and still came up with a $1.8 billion operating deficit, plus borrowing for infrastructure, and $1.3 billion for Nalcor?

The arithmetic is not that complicated even if the process of paring the problem is.

NL already has the highest per capita debt in Canada and runs far ahead of any rival province once Nalcor debt is added.  The failure of the Budget to deal with the problem only means the levy may become permanent.

The public can be forgiven for not understanding the intricacies of Muskrat Falls, especially the financial risk associated with it and Nalcor's offshore ventures. But the problem is theirs anyway; no protest, however large or frequent, will make it go away.

That is why I suggest the protests needs focus. The appropriately named bullhorns will decry the levy, but they don’t tell pensioners and those on fixed incomes they are paying for bloat, like the Office of Public Engagement, whose sole function is to “spin” the Government line. 

Will the bullhorns choose bloat over the levy? Will they choose bloat over the HST on books? Or more profoundly, will they choose bloat over the closure of a hospital? That is coming, too. 

We can state the problem a different way, if you prefer.

As the Exhibit (below) describes, this province’s spending is higher per capita by 20-36% over other provinces.

NL Budget Speech 2016

NL has had five operating deficits in a row; six in 12 years.. Budget balance is forecast to continue until 2021-22; and this expectation is predicated on the price of oil.

Is this an issue of discipline or a problem of entitlement?

The Finance Minister crows about having achieved operational savings at Nalcor of $6.7 million. But neither she nor anyone else talks about the private corporations that protect members of the Muskrat Falls project management team who earn salaries far in excess of CEO Stan Marshall, and keep them private.

The protests don't ask if we should disband Nalcor and save taxpayers from the multiplicity of ways it is a sinkhole, not just Muskrat Falls. 

When does public policy get discussed in the context of choices and of risk to a small population? 

Are the protest organizers afraid or incapable of addressing major public policy issues that have been exposed, which threaten our economy and society? 

In inflation adjusted dollars, according statistics provided by JM in the Budget Colloquy Series entitled "A Decade of Squandered Opportunity", the amount spent by the government, on salaries, increased from $1.7 billion in 1997 to $3.8 billion in 2013. Based upon last year’s Budget, in real dollars (after inflation), the government spent twice as much on salaries as they did in 1996. 

Source: A Decade of Squandered Opportunity by JM

JM also noted that in the period 2007 to 2014 (oil boom) an amount of $8.5 billion above the historical norm was spent on salaries.Subsequent Budgets have only made the problem worse. Now fifty cents of every dollar is spent on salaries and benefits.

Reversing such an unaffordable human resources capacity is is akin to putting the Genie back in the bottle. It will strain the leadership capacity of Government. It will cause untold pain on the affected individuals and their families.We know that. Sometimes being a leader sucks. But past mistakes can't be permitted to beggar a whole population.

The protests seek an easy fix; except in the absence of a quick rebound in the price of oil, there is none. There are only better, more effective, and longer lasting options, than those proposed by the Finance Minister.

Unless we are prepared to consider public service layoffs and service cuts through a proper process of program review, and possibly wage roll backs, too, the new levy will be only one of the fiscal tools that will inhabit our lives for a very long time.

This is a Government that brought little to the table despite having been given an enormous mandate. It exhibits neither courage nor the ability to connect with a public confused by the bullhorns and by the Government’s own mixed messages.

The public needs to draw a line in the sand; they must demand fiscal decisions that reflect our priorities and can afford. 

That is why if those policy choices aren’t part of this protest movement, the protesters may as well put down the placards.

They’ll need those hands to greet the bankers and the guys from Ottawa who will make the tough decisions for us.