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.