“This province should be no different than
all of us in running our own households.
But the province’s situation is comparable to any
of us taking out a second mortgage just to buy
groceries and running up our credit card
to pay for electricity and telephone bills.
If this continues, we are in very real danger of drowning in our own debt.
We have a plan that focuses on achieving a balance.
It’s about making decisions for the right
reasons – not for political reasons. That
Irresponsible practice has gotten us where we are
today, and let me assure the people
of this province – those days are over. “
Premier Danny Williams, Economic
Update January 5th, 2004
There is nothing dramatically new in the statement that this arrogant provincial government has been lying about the province’s financial situation, or is completely incompetent. Some might suggest it is a combination of both.
What ever the real reason for the financial situation we face, the government has blown it. They have incompetently squandered our windfalls.
In the past, P&P has been critical of the province’s inability to forecast it’s expenditures and revenues.
Yesterdays revelations prove even in this period of postponed austerity, when “Cabinet ministers have worked like they never have before”, all of the Queens advisers, economists, consultants and gurus are out to lunch.
Since 2005, the province has been unable to get it right. Substantially higher expenditures than forecast or lower than forecast. Yo-yo economics has dominated government revenues mixed with the political weakness of not exercising restraint from unprecedented patronage and spending.
Previous governments would have drooled at the opportunity to run this province with the financial windfalls that this government has been given. I would be remiss to point out that these windfalls, despite the tory propaganda, would not have been possible without the series of successful negotiations by Liberal administrations that allowed the development of three offshore oil platforms and Voisey Bay. In fact, one does not have to look past the FPI debacle to see that the tory government has been prone to the giving away our natural resources.
Newfoundland and Labrador is more of a staples economy today than in the days when Cod was king. Our economic fortunes are pegged to the price of oil. Provincial economists forecast oil prices and trends to determine estimates for the government’s annual budget. The price of oil keeps our schools running, our roads repaired, pay our doctors and nurses. Government expenditures are that dependent on it!
My point, not to be overly partisan, is that that current government has had ten years of the greatest prosperity than any single administration in our province’s history to get it right.
This “correction” is not about the sins of the past, it is because of the sins of the past ten years. The government has blown it. They are solely accountable for the financial decisions that they have made.
Premier Williams offered great hope. If the government had stuck to its guns from the 2004 Budget and economic outlook, we would be rolling in cash today. Instead of staying the course, the government gorged on the windfalls like the good times would never end.
We were made to think we were prosperous, that there would be opportunities, that the roads would be paved with gold. The expectations could no be met, the province has been on a collision course with reality for years.
In reality, it could be argued that more people have benefited directly, in terms of putting bread and butter on the table from Alberta Oil than our own offshore.
Yesterday’s budget is proof that they blew any leg up or economic advantages that we should have because they have become hyper-partisan and spent like kids in a candy store.
The dental bills are in and we will be lucky if we are not all wearing dentures when they are done.
We need a plan for the future. We need to discuss what our priorities are. We need to begin planning while we have influence over the outcome instead of reacting to crippling debt when our source of income has literally dried up. I am not confident that there is plan, what we saw yesterday was reactive - not proactive.
Are we prepared for a much deeper economic crisis than the relatively mild one that beached our shores in 2008-09?
Of course not! Are we going to accept it?
Time will tell.