MOODY’S DOUBTS OSBORNE ABLE TO ACHIEVE BUDGET BALANCE

Monday’s Blog Post forecasting a ‘status quo’ Budget didn’t exactly require going out on a limb. The Government had long ago made clear that they don’t like making decisions, especially ones that disappoint or that engender public protest; so they don’t.

Problem is, inaction and indecision carry consequences. Continued vacillation threatens the fiscal viability of the whole province. 

Moody's, a financial services and debt rating agency, has our position in its crosshairs. In a review released just yesterday, the Firm noted that NL's "path to balanced budgets is at risk". They said:

It’s not a novel announcement. But the right ones are saying it  (text of announcement is provided at the end of this Post.)

THE RISE AND DECLINE OF CATHY BENNETT

When I wrote “Cathy Bennett’s Days in Finance Are Numbered” little more than ten months ago, I seriously doubted her tenure would last more than a few weeks.

I had assessed the province’s financial position and her first Budget. It was easy to see that the restraint measures she proposed — mostly increased taxation — were the work of a hapless political amateur delaying the axe-wielding necessitated by a widening fiscal chasm. 

The exigencies of politics demanded execution at the start of the government’s term. Even if one cared not a whit about the province’s finances, delay bore far more political landmines than decision.

Admittedly, the September piece had poorly assessed the importance of ego, partisanship and ambition over common sense. Still, in the circumstance, a savvy Minister of Finance should have presented an ill-equipped Premier the fiscal ultimatum commanded by a dreadful Tory legacy.

Tom Osborne Defects: Time for a Realty Check

The announcement by the MHA for St. John’s South, Tom Osborne, that he is quitting the Dunderdale P.C.s, had me recalling my June 25^th Post, entitled, “All Eyes on the Backbench, Please”.

Since posting that warning of the political cost of Dunderdale’s declining popularity her personal Poll numbers have been in free fall.  Her comment, that ‘strong leadership’ does not govern by Poll results, was unconvincing. 

Everyone knows, Premiers can’t let a single poll result or two cause a reversal in decision making.  But a trend will.  And what Premier Dunderdale is experiencing right now, is exactly that, a trend. 

Tom Osborne’s decision begs five points of analysis:

First, when the Premier’s popularity descends into free fall, the authority of leadership is the first casuality. Most Premiers have enough personal IOUs with caucus members that they can survive periods of voter displeasure, especially when it occurs early in the mandate. This is a crucial test which Dunderdale has failed.

Second, when Osborne refused to endorse Dunderdale for the uncontested Tory leadership position, she all but shunned him.  It was one thing not to appoint him to Cabinet; that is her prerogative.  It is quite another not to make him feel welcomed inside the Tory caucus and attempt to gain his confidence.  That is an error in judgement.