The budgetary trial balloon went up: the budgetary trial balloon came down. And in the end, the province’s finance minister wound up delivering a stand-pat budget that forecasts $258 million in deficit spending this year, and posits a $432 million deficit for 2013-2014.
Instead of the three per cent in program cuts suggested at one point by Premier Kathy Dunderdale, the province will actually increase its program expenses by $113 million and its debt-servicing expenses by $40.5 million.
That $153.5 million increase in costs means the province’s spending — despite an expected $1.1 billion in reduced oil royalty and Atlantic Accord revenue income — will actually increase by 2.1 per cent, slightly under the expected inflation rate of 2.2 per cent. This, despite non-core program cuts that saved $38.8 million in additional spending.
“We decided we’re not slashing and burning this year,” Finance Minister Tom Marshall said to reporters inside the budget lockup.
“We’re not doing it all at once.”
Truth is, it’s not really a matter of not doing it all at once. They’re not really doing it at all.
There won’t be tax cuts, nor will there be tax increases. For seniors, there will be cuts in the costs of permits and fees, and the government will continue what it says is a reasonable and practical fiscal plan.
In its own particularly hyperbolic style, the budget speech describes it like this: “Our plan is fiscally responsible. It is socially progressive. It is carefully crafted to sustain the momentum that has made Newfoundland and Labrador an inspiration and an example to all Canadians of how it is done. As far as we have advanced already, Mr. Speaker, the best is truly yet to come.”
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Certainly successive Conservative budgets have done much to enhance services and infrastructure in a province that has traditionally fallen behind in this county, due to its limited economic base.
But while we may be in some way an inspiration and an example to the rest of Canada, they probably would find the last decade’s near-100 per cent increase in provincial revenues — the vast majority of that being non-renewable revenues from oil — the most inspiring part of the equation.
The end result: this could be called a reasonable, prudent stay-the course budget, much like its title, “Reasonable Investments for a Secure Future” tries to imply — except for the absence of one big “if.”
It would be reasonable and prudent if we had any expectation that the oil money we now enjoy was somehow a limitless resource, extending off into our future and the future of our children.
More than one dollar out of every three is oil revenue, money being pulled out of the ground that will never be back. Without it, there would be no decision about whether to slash and burn this year or next.
It’s what we’re doing with that future storehouse, how we’re preparing for the eventual winter, that will truly separate the grasshoppers from the ants.