Monday, November 19, 2012

If Alberta cannot balance the budget now, when in the future will we be able to?

As you already know Premier Redford plans an end to the Ralph Klein legacy and put Alberta back into debt by borrowing money to pay for various infrastructure programs. The PC spin machine is already revved up and is trying to make anyone opposed feel guilty for not wanting to build schools (won't someone please think of the children!) or hospitals (won't someone please think of the ill) the sick. I can't recall how many times I have already seen them cry out "Which hospital would you cut?" to those who dare question their plan for putting Alberta back into debt.

The argument of course is total malarkey.

It is not what Alberta is borrowing money for but rather why Alberta,with over $40 billion yr in revenue, the lowest unemployment rate in the country and whose economy is the envy of virtually every jurisdiction in North America, has to borrow money at all that is the issue.

If Alberta can't do it, who else possibly could do it?

Redford and the PC's would like us to believe that although Alberta, with record revenue, does not have enough money now to carry out their plans, that we will have enough at some unfixed point in the future to not only continue to pay the bills but also pay the interest on the debt we are about to incur. In essence; they claim to know the future and we should trust their plans. This from the same financial gurus who gave us a budget with what everyone knew at the time contained pie in the sky revenue estimates and who now claim a little over 200 days later that the 'fiscal reality has changed'.  The PC's couldn't accurately predict* 200 days into the future and now they want us to trust them on their plans to put us into debt for years to come?

I don't think so.

So why are we in this situation that we 'need to borrow' in the first place? Well having a government that pays our civil service at rates higher than anywhere else in Canada may have something to do with it, as well as the fact that the PC's just can't ever seem to make a cut or say no to anything also contributes, but these have been the norm for the last few years and we managed to get by albeit by running deficits.

The real reasons why we are in this mess are twofold. First Redford has to pay for the billions in election promises she made, even though she claimed they all fit into her budget, and the second is that we have basically ran out of money.

Think back to around the middle of the last provincial election. Redford and the PC's were looking like they were in serious trouble. All the polls were against them and it appeared to everyone, pollsters, media and even the water cooler crowd that the 40 yr dynasty of PC rule may indeed be coming to an end. With little to lose Redford started making billions in promises on things like building numerous new schools and rejigging the health system by constructing (up to) 140 care clinics, with no idea where we would find or pay for the people to staff them, on top of a few other costly promises.  Well as luck, and a media that seemed more interested in individual candidates beliefs rather than on actual records or platforms, would have it, the PCs won the election. And now they have to find a way to pay for those promises which they made in desperation.

The other reason, and one that seems to be getting little coverage in the media, is that Alberta is about to run out of money. 5 years ago the Sustainability Fund was worth close to $18 billion and is projected to be worth around $3.5 billion when the next budget is due. But with a deficit projected to be up to 3 billion+ for the current 2012-2013 budget, there is good chance that Alberta will have run out of money. The money that the PCs have used to cover for their fiscal incompetence with 5 consecutive deficit budgets in a row, the last few while taking in record revenues.

The jig is up and they won't be able to hide it anymore.

My future prediction: You can expect the PC's to do their damnedest to try and make anyone who disagrees with borrowing money feel guilty because they can't manage to balance the highest revenues in the country

but remember; this borrowing is not for frills but for what I hope everyone would consider to be core spending. It is what government is supposed to be spending money on and should be the first place where we spend money, not the last (hoping that there are some $ left).

The only ones who should be feeling guilty are Redford and the PCs for poor spending practices and trying to pull the wool over Albertan's eyes with shaky budget predictions, non budgeted election promises and draining the $18 billion sustainability fund to near zero.

* how bad were the PC projections: The Government's forecast for GDP growth was 23% higher than the average of private sector forecasts. Predicted growth in personal income taxes was a whopping 38% above the average independent private forecast. And incredibly, the Government's estimate that corporate profits would increase by 11.8% came in at a mind blowing 413% above the 2.3% growth estimated by the average private forecaster.

But hey, the 'reality changed'....


Anonymous said...

This is just the trouble we're getting ourselves in at the Provincial level. The municipal debt in my particular municipality is growing very quickly on top of the Provincial and Federal debt. Think of the Children indeed, they will be the ones servicing this debt when I'm drooling in an understaffed "care" centre.

Anonymous said...

Harper and Redford are failures as budget managers. I miss liberals like Martin and Klein who delivered balanced budgets.

Anonymous said...

Klein was a PC you idiot. Harper is an person to be running the country. Martin was a fool, just like any asshole that "misses liberals". Jesus H you must be from the east...