No miracles visible in latest NDP budget

Hey there, time traveller!
This article was published 19/04/2012 (5301 days ago), so information in it may no longer be current.

“Overall, this was the most difficult budget we’ve had to deal with in 13 years because of the financial situation we find ourselves in today.”

— Brandon East NDP MLA Drew Caldwell

During his budget speech on Tuesday, Finance Minister Stan Struthers praised his government for implementing a “successful formula for steady, sustainable growth.”

We were told that our economy has created thousands of good jobs, and that our population was growing and getting younger. Manitoba has faced a number of economic challenges, starting with the global financial crisis in 2008, and yet over the last five years “we have led the country in economic growth.”

By golly, the NDP’s financial wizards were so successful in their “balanced approach” Maclean’s magazine called it “The Manitoba Miracle,” Struthers said.

If the province is doing so well, how come we came out the other side of Tuesday’s budget day feeling like the good ship Manitoba is sinking?

Simple answer: There’s nothing miraculous about the NDP’s decision to increase budgeted spending between 2011 and 2012, increase taxes and user fees, raid the rainy-day fund of $196 million, and balloon the provincial debt.

Exactly one year ago, before Manitobans felt the full brunt of the one-in-300-year flood, the province originally forecasted a $438-million deficit for the 2011 budget, with a two per cent increase in overall spending.

This year, Struthers has forecasted a spending deficit of $460 million, even though he claims the NDP’s belt-tightening will reduce spending by $578 million — or 3.9 per cent.

Struthers arrived at those numbers by comparing what the province claims to be spending this year to what was actually spent last year — not the budgeted amount.

Certainly, fighting the flood cost the province $936 million, though about $445 million of that is expected to be paid by the federal government. But when we’re talking about year-over-year administrative costs, playing smoke and mirrors with some fudged accounting is just plain wrong.

As well, Manitobans should be concerned that as a result of the government’s addiction to spending, our province’s summary net debt debt will rise from $14.8 billion in the 2011-12 budget to an expected $16.3 billion for the current fiscal year. With interest rates likely to rise in the coming year, the government will have to pay more out of its budget just to pay down the accrued interest, which sucks away cash from important government services.

We’ll give some tepid praise for the NDP’s decision to amalgamate several regional health authorities as a way to cut administration costs — an idea first suggested by the Progressive Conservatives in 2007. We also agree with the government’s decision to reduce the number of government-appointed agencies, boards and commissions by 20 per cent.

Nevertheless, health department spending will grow by 3.5 per cent, exceeding $5 billion for the first time in Manitoba; Family Services spending will rise by 7.7 per cent; local government spending will rise 16.8 per cent; and Infrastructure and Transportation spending is going up 8.8 per cent.

Premier Greg Selinger wants to blame the federal government’s flatlined transfer payments for much of Manitoba’s financial woes. While that’s generally untrue when it comes to the health-care transfer and Canada Social Transfer, we do agree that the NDP has a legitimate concern when it comes to future health-care transfers as of 2014-15. That’s when the current health-care accord runs out and health transfers are based solely on population share.

But in our opinion, we should be striving to become a “have” province, with an eye to the day that we no longer have to be dependent on federal transfers.

Thus far, the NDP have been incapable of realizing that goal. And after 13 years in power, they have no one else left to blame. Mr. Caldwell, we couldn’t have said it better ourselves.