Tuesday 23 March 2010

Budget analysis: ouch

The true test of a leader is how he performs when times get tough. Selinger earns a FAIL.

The new budget forecasts a loss of $555 million for 2009 and budgets for another $545 million deficit for 2010/11, plus additional deficits in the following two years. To put this in perspective, the largest surplus ever budgeted by the NDP in the past 10 years was $175 million. The total of all budgeted (not actual) surpluses over those 10 years is only $812 million. In one fell swoop, we've set our finances back by over a decade.

Also consider this: in every single budget, the forecasted expenditures has been greater than the budgeted expenditures. In other words, the government has overspent every. single. year. That means that the record $13.26 billion in spending in this budget is likely to be higher by this time next year.

The biggest culprit: health care. Health care spending has been accelerating over the past ten years, and no little recession is about to slow it down. Just like my source, err.. the guy I met on the bus, said : it increased by another $300 million over the last budget. It's double what it was in 2001, almost a billion dollars more than Saskatchewan spends, and the system still under-performs. How can that be? Because the solution to everything is to spend money. And if inconvenient balanced budget legislation gets in the way of spending money, the solution to that is simple as well: change it! Let me ask this: what good is legislation if you can simply change it when it gets in your way?

While I'm on a roll asking all these rhetorical questions, here's another one: How are we going to get out of this hole? In previous years, we could count on increasing transfer payments to help us out, but those days are over. Ten years of economic growth, ten years of increasing transfer payments, and we've squandered it all. Now, if we want to reverse this slide, and claw our way back to debt-cutting respectability, there is going to have to be real pain. You can only get so far by nickle-and-diming people with higher user fees. Our personal and corporate taxes are already too high, so expenses are going to have to be cut big time. The bigger these deficits are, the more painful it will be.


Anonymous said...

maybe if they stop building so many new WRHA offices , they can get health spending under control

cherenkov said...

It would help.

Anonymous said...

Good work. If only more bloggers could do math.

/* Google Tracker Code