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Thursday 16 November 2017


Mercifully, Finance Minister Tom Osborne kept the Budget Update short. It won’t get much ink here, either.
Osborne has confirmed what most people seem to have concluded: he has no intention of tackling the deficit.
The former Finance Minister, Cathy Bennett, told a reporter that “I wish we had had better information going into the election campaign,” seemingly ignorant of the fact that, as an MHA, she was always expected to read — and to understand — the Budget Estimates. Of course, her search was for a scapegoat. Osborne, not four months into the job, hopes he has found one too. 

Finance Minister Tom Osborne (Photo Credit: CBC)

The new Finance Minister has declared that he wants Crown Corporations to deal with their overspending. “They need to find cost reductions and operational efficiencies,” he told the media. Undoubtedly, they do. But the Minister is being less than forthright.

Two full years into the Liberals’ mandate, all those false claims over the miracle of “zero based budgeting” have disappeared with the old broom. Osborne has a new mantra. Crown corporations “account for 60 per cent of government spending;” they are responsible for the Government’s fiscal laxity.     
Who are those wasteful service providers? Don’t they include the Health Care Corporations and Nalcor? 
Tom Osborne, having served as Health Minister under Danny Williams, knows that health boards have no independence from government whatsoever. CEOs and Boards of Directors are only nominally in charge; Health Ministers persistently eschew efficiencies and service delivery changes in favour of the exigencies of politics — mostly partisan politics. 
As to Nalcor, what could possibly be said except that management is cheek to jowl with Premier Ball, who is afraid to audit them even for possible corruption? Besides, Stan is hiring — not firing.
After health services and Nalcor, the other crown agencies represent chump change, except for the Liquor Corporation which is still — operationally — the best-run government operation in the province.
And what of Osborne’s comments over the last few days? 
He says that the deficit is “unsustainable”, that we are not in a “crisis”, that the fiscal situation is still “unstable” and “we don't want to shock the economy.” The inconsistency is disturbing — even if the Bond market is still wooed by the blarney.
The lopsided VOCM Poll result (below) is evidence of how even an unscientific survey convincingly illustrates that the public is not buying what Osborne and co. have on offer. Out of 5572 participants, 91% don’t agree with the Minister that the province is out of “crisis”.

Likely the Liberals will conclude that the problem is their “messaging” and not the deficit. 

That’s one part of the picture. Now for the numbers.

Principally due to lower revenues and a free-wheeling Nalcor, the Government’s borrowing program has gone up by $300 million to $700 million. 
The Fiscal Update also projects a current account deficit of $852 million, rather than the original $778 million forecast. A difference of $75 million would not be an egregious sum on $8.1 billion of expenditures — if the occurrence was a ‘one-off’. But this second Budget of Cathy Bennett’s represents the 6th consecutive deficit budget.
And the bone-crushing half-billion dollars needed for “rate mitigation” — on top of the increased operating deficit — together with the fact that NL society might collapse under the combined weight of Nalcor's and the Government's debt — doesn’t even receive honourable mention let alone a plan to prepare!

We might be inclined to give the newly minted Finance Minister a little slack had he said that he was unhappy that the deficit accelerated under his watch — that he has sent his officials in several directions, each with an axe, to demonstrate to the public, his Cabinet colleagues, and the heads of those recalcitrant crown corporations that he means business — that, in future, the Government’s fiscal target will be met, come hell or high water!

Tom Osborne said nothing of the kind, confirming that he has no intention of doing anything except to continue a long-running fiscal fiction.  
Commenting on the Update, the CBC quoted CUPE President Wayne Lucas: “A confident government who looks to the future will create jobs…” He forgets that his membership — and the whole public sector — will pay dearly for the $12.7 billion worth of (far pricier) jobs whose funding has the Treasury irreparably broken. 
Osborne is pleased that the Union heads are pleased with him. 
Collectively, they have no idea the price of their political peace.