THE GHOST OF SIR RICHARD WEIGHS: A BUDGET PRIMER

 When Finance Minister Siobhan Coady rises in the House on May 31 to deliver the Furey Government’s first Budget, it will be a test not of her resolve, but of the Premier’s determination to give NL the financial leadership that recent Premiers — from Williams to Ball — refused, or were incapable of providing.

This is Premier Furey’s day. The big question is: in place of leadership will we hear only echoes of NL history’s famed bad boy, Sir Richard Squires, whose Administration in the 1930s offered to sell Labrador for $110 million?¹ 

Hopefully, the Premier will be remembered for more noble reasons. Except, Furey has not yet made a single decision about anything important, so we will have to reserve judgment on this, and on his courage, too.

Moya Greene, notwithstanding the deficiencies of the PERT Report, essentially told the Premier that we have arrived at, in the vernacular, a ‘come to Jesus’ moment.

IS IT POSSIBLE TO ELIMINATE THE DEFICIT IN NL?

Guest Post by PlanetNL

PlanetNL33: Deficit Elimination? NL is Too Far Gone

A Pessimistic Interpretation of the Greene Report 

Moya Greene’s “Big Reset” Report, the final product of the Premier’s Economic Recovery Team, has done a dashing job of showing exactly where and how to eliminate this Province’s deficit plague.  Well done, let’s get started, right?  Not so fast.

Upon consideration of the underlying issues, the prescribed budget cuts and taxation increases will face insurmountable challenges.  It is clear upon second reading that Greene chose her numbers despite their improbability - she has developed a plan on paper that is impossible to deliver.  If this were a business plan submission, she has failed because there is no consideration of the many execution challenges.

The Report is not a failure, however, in the sense that it now makes our problem much clearer to see.  The financial state of the Province is well beyond any remedy that can be devised independently as a Province.  The Report does successfully show that insolvency is indeed at our door and there is no solution other than for the Federal Government to step in and help clean up the mess. 

Self reliance or Commission of Government? The choice is ours.

Guest Post by Ron Penney 

I don’t really think we will have the second Commission of Government, it will likely be some faceless federal bureaucrat in the bowels of the Confederation Building managing our finances. We may retain the fiction of responsible government with none of the powers. 

The Greene Report has for the first time added up all our debt and busted this artificial construct of net debt, mandated by the arcane rules of the accounting profession. The amount is staggering: $39 billion, $12.6 billion added in the past 12 years. And when the unfounded pension liability and other exposures are added in, it goes up to $47.3 billion,  $215,000 for each household in the province. 

Cash deficits have averaged $1.9 billion over the past 7 years. 

Who’s to blame?