One of the
most important revelations in the Ball Government’s policy document The Way Forward — and there are very few — is that it recognizes they have a spending problem. Yet it constitutes neither
road map nor resolution for the province’s fiscal woes. Recognition of the
problem, alone, is not enough.
Says the document:
“This fiscal problem was not caused
by a drop in oil prices, but was instead exposed by the decline in oil prices.
The past decade has been marked by an incredible increase in Government
revenue… Even in 2016-17, Newfoundland and Labrador has the highest per capita
revenue, and the highest per capita program costs among provinces. We cannot
treat our current situation as only a revenue problem. Our province has a
spending problem.” (p.3)
Still, it is
peculiar phrasing — it seems no one discovered they were out of water until the
well went dry!
Consider the
part that deals with fiscal targets. It says only that the government is “committed
to… exceeding the target for the 2016-17 deficit and maintaining our commitment
to return to surplus in 2022-23.” (p.5)
Return to surplus
should imply an average reduction in spending of around $300 million in each of
the next five fiscal years. Including for this year, additional
borrowing of around $5 billion will be needed — just for the operating account. Not a pretty picture.
Then, too, this year’s deficit was reduced from $1.83 billion to $1.58 billion — not
by decision-making, but chiefly because oil production and the price were higher
than previously forecast. Six years to a balanced budget is a very long period — especially when you consider that the government offers no benchmarks of
achievement, except to report following each of the plan’s nebulous “three
phases”.
Of course,
the drafters do not take care to say that mid-way through the plan a general
election will be held, that funding for capital accounts and for the Muskrat Falls
project will continue. Essentially, government has given itself the luxury of delaying
fiscal redress for an indefinite period— as if that is an option.
One might be
prepared to cut the government some slack if its retrenchment proposals contained
some specific amounts of targeted savings. Other than the proposed reduction in
leased office space and a cut in boards and agencies by 20% — chump change in
the larger context — we are left with a litany of generalizations: “Adopt a
Flatter, Leaner Management Structure”, “Reduce Silos in Government Operations”,
“Utilize Zero Based Budgeting”… none of which inspire thoughts of a government
preoccupied with crisis.
The Way Forward is not a document constructed in the
Department of Finance - it is not even available as a financial document on the department's web site. This is the creation of a handful of PR types with
access to Tourism’s glossy photographs. It demonstrates no knowledge of what the
solutions to a spending crisis should look like. Many of the financial,
economic, and administrative references are matters that constitute
merely the ongoing minutiae of a large organization.
Normally I’m
not looking for humour in documents like this one. We have Mark Critch, Mary
Walsh, and others to provide entertainment in that department. Still it is
impossible not to guffaw at this line:
“For years, our province had a
strategy of strategies with purpose-built programs and special offices… the
model has resulted in an expensive, complex and crowded suite of programs and
services. Public sector efficiency has not been top of mind.”
Imagine
defining unbridled waste and mismanagement as a “strategy of strategies”. This is surely a tip-off that the government
plans to replace all the people in the Department of Finance with the Office of Public Engagement!
The Tories
applied neither a “model” nor a “strategy” to spending. The money tap facilitated a feeding frenzy — between
senior bureaucrats and politicians. They spent it all and borrowed even more, with
not a thought to consequence.
70% of
government spending is claimed by health, social services, and education. Still,
the document notes:
“High levels of investments in recent years
did not budge many of our most important outcomes in health and education.
Despite increasing health care spending by $1 billion and K-12 and
post-secondary education spending by $400 million, an increase of 58 per cent
and 44 per cent respectively over the past ten years, many of our indicators
remain well below the national average.” (p.2)
So who has
been minding the store in those departments — and are they still there?
Against this
backdrop, imagine how nebulous any claim to better “outcomes” is, or to the idea
of “more from less”. The Way Forward
commits “to address gaps in our system, strengthen existing programs and
services” and to “improving health outcomes”. This is essentially rhetoric — not
a prescription for surgery on excessive spending.
Equally, a
“Task Force”, “Collaboration”, and the commitment to “Modernize” in the case of
the College of the North Atlantic — all likely necessary — offer no evidence of
a government beset with a bond market breathing down its fiscal neck.
The glossy
brochure did not even acknowledge the financial or economic implications of a
doubling in the cost of electricity — as if that event won’t have devastating
effects on purchasing power and on the quality of life for thousands of people.
Rather than
a “GPS” for a province in trouble, The
Way Forward is another dust catcher. It will thrill only the faint of
heart.
