Questions swirl around Bennett’s $100M cuts

James McLeod
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Opposition parties say government’s ‘annualized’ claim is unclear

When the House of Assembly resumes sitting today, it’s a safe bet MHAs will spend a good deal of their time talking about money.

Cathy Bennett.

Some of the talk will no doubt concern the big stuff — long-term borrowing, the $2-billion deficit and proposed cuts across the board — but there will likely be a few questions about $100 million Finance Minister Cathy Bennett says she saved by cutting discretionary spending.

In fact, NDP Leader Earle McCurdy said he expects his party will keep asking, because they don’t know what the heck is going on.

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Liberals freeze community grants, cut discretionary spending

“It's part of our job in the House from our caucus to get information out to people, and especially if what's being volunteered by the government is as sketchy as those documents were,” McCurdy said.

Last Wednesday, Opposition Leader Paul Davis asked about the constraints imposed on discretionary spending by the Liberal government.

“I believe the number is somewhere in the vicinity of about $100 million, which is substantially more than the former administration's discretionary spending freeze that took place over the course of a much longer period,” Bennett said. “I'd be happy to provide the Leader of the Opposition with the exact details, and also be happy to provide that to the media.”

Then on Wednesday after question period, Bennett spoke to the media, and revealed the $100 million was “annualized” cost cutting.

That seemed to mean that since the Liberals have been in power for only about three months, they actually saved about $25 million, and they were extrapolating out to the rest of the year.

The next day, during question period, the first question by Davis was about the discretionary money issue.

“Here in the House of Assembly yesterday, I asked the minister of Finance, and she stated without qualification, that their government has, since December, achieved $100 million in savings from the reduction in discretionary spending and travel,” Davis said.

“I ask the minister: can she assure the House of Assembly today that her statement and answer given yesterday, that they've saved $100 million since December, is accurate?”

Bennett replied, “I'm proud to stand in this House of Assembly and confirm that, through the work of this government in just 88 days since taking office, we have identified more savings of $97.5 million for 2015-16.

“These savings, which include discretionary savings, have been realized through things like no reallocation of dropped balances or savings, the reduction of parliamentary assistant salaries, the reduction of political staff, restrictions placed on hiring, restrictions placed on consultants and the elimination of discretionary travel as per the directive our government issued back in December.”

Bennett concluded her response by saying, “I have the document here, Mr. Speaker, that I'm happy to table at your discretion.”

True to her word, after question period Bennett tabled the document, but that only raised more questions.

The one-page document has a single line with three numbers:

Savings identified in Fiscal Update $118,054,100

Revised Savings Projected as of March 9/16 $215,616,900

Additional Spending Savings Identified 97,562,800.

There were no details about where the government found ways to cut costs, and no information about how exactly the “annualized” aspect of this works.

McCurdy said if a lot of the money the government is saving is associated with year-end unspent money, that can’t be “annualized” because there aren’t four year ends.

He called the whole situation “pretty flimsy.”

A spokeswoman for the Department of Finance said in a brief email statement, “As the minister indicated in the House, details of annualized savings achieved and how they factor into Budget 2016 will be outlined in the upcoming budget.” Twitter: TelegramJames

Organizations: Department of Finance

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Recent comments

  • Samuel J.
    March 15, 2016 - 15:53

    @No - Aaron … You can't expect details of spending that never occurred. That's not how accounting works. You look for its impact on the bottom line. In December, government released a fiscal update which put the projected deficit for the year at $1.96 Billion. Government put cost saving measures in place in the hopes of paring that down. Bennett has said that effort resulted in savings of a $100 million. Asking for proof at this point is nonsense. The proof will be in the pudding and the pudding is still in the oven. Once the fiscal year is over (March 31st), Finance will tally and publish the results. Based on Bennett's assertion in the House, I expect to see the actual deficit for the year was $1.86 Billion or less. If it comes out higher, then you'd be justified going after Bennett. Until and unless that happens, you're criticisms - like those of John Smith - are nothing more than ignorance or partisan politics. Time to give that a break.

  • John Smith
    March 15, 2016 - 14:28

    totally inept, clueless, bumbling and stumbling along aimlessly, throwing out numbers here and there that are meaningless, if this government makes it through its four years without collapsing I will be surprised. If Dwight wants ideas all he has to do is copy exactly what Danny Williams did in 2004...take a look at the '04 was a beauty...

  • Brian
    March 15, 2016 - 12:36

    In fact, NDP Leader Earle McCurdy said he expects his party will keep asking, because they don’t know what the heck is going on. Well now, that's not really anything new is it?

  • Samuel J.
    March 15, 2016 - 11:50

    Not sure the reason for all the confusion. Bennett's statement is pretty straightforward. By putting the brakes on some areas of government spending, she has managed to reduce the projected deficit for 2015/16 by $100 million. Since this is the last quarter in the current fiscal year, it should be self-evident that those savings are being achieved in the present quarter. What I find more interesting is the thinking behind the criticisms coming from the PC and NDP leaders. Davis seems to be saying 'we don't believe you and you need to do more to rein in spending (the spending we had allowed to get so far out of control)', while McCurdy is saying 'we don't believe you and we don't want you to rein in spending - especially if it means any loss of government jobs - because we think it would be harmful to the economy (and harmful to our political base). As the minister of finance, you know you're on the right track when the opposition are sharply split on whether you're doing too much or too little.

    • No
      March 15, 2016 - 13:43

      No it's not straight forward. To save 25M in this quarter means they saved 25M in this quarter. To multiply by 4 means 100 but it's too late for this year to save 100M. To save 100 M for the next calendar year is a maybe. Look at the detail she gave. Not much, is it?? Identified doesn't mean achieved.

    • Aaron
      March 15, 2016 - 14:14

      Is this an actual comment? You're kidding. She told the public she saved $100M since taking office. That isn't true. They saved $25M so far yet produced no backup or evidence. Come on Samuel, they promised to be open and transparent and we get a fib and no evidence. She could have said we saved $25M and forecast to save $100M by year's end and here are all the details, but she didn't do that, she tried to trick us. That's a big concern.

  • Denise
    March 15, 2016 - 11:43

    "Savings identified"....not acted upon and actually saved, come on... nothing has been saved!!!

  • Winston Fiander
    March 15, 2016 - 10:09

    The Government of NL seems to have had good representation at the Boston Sea Food show. How many reps went and how much did it cost us taxpayers?

  • roy206
    March 15, 2016 - 10:07

    This past weekend was a gov holiday, lord knows they need it.....The province requires $9 M every day to survive on top of all the money we owe. When Minister Bennett leaves on Friday and comes back Tuesday, she needs and additional $27. M to top up the accounts for the 3 day break....I was putting the 25M in perspective...Not enough to see us thru a long week end..

  • JB
    March 15, 2016 - 07:52

    We will need more than a pack of hamburger helper for our financial problems. I want to see massive cuts to public service. The biggest expense we face.

    • Simple answers
      March 15, 2016 - 10:05

      Okay. Where, exactly?

    • Janice Sellars
      March 15, 2016 - 10:40

      Public service cuts! Are you serious? You obviously don't work as a public service . We are at a skeleton staff as is. How do you you expect to get thing done if there's no one working as a public service employee. Why not cut back on consultants/nepotism with the government. Start making some connections on the high paying positions that are favors.

    • Pensioner
      March 15, 2016 - 10:55

      That is a bold statement to make. Bordering on asinine unless you have put a great deal of thought into it. The public service of any Province, state, burrow or otherwise is the largest expense of any government. The large cost of NL's public service is due in part by where 500,000 people are spread out over roughly 250 municipalities. Some with less than 50 people. Where people reside the government must provide public service - schools, ferry's, roads, healthcare and such. Your statement can only lead me to believe that you would support regionalization.

  • Barbara Colbourne
    March 15, 2016 - 06:46

    One sure-fire way for Government to save some real dollars is to get rid of, close, shut down and move the entire operation called the Marine Division of Transportation in Lewisporte back into Confederation Building. The Marine ADM position that was created can be eliminated with the work being done more efficently by office workers. School Board Superintendent positions were eliminated, and just so, can the Marine Assistant Deputy Minister. As far as I can see, and have experienced, the new Marine Transportation, was used as a step to block us Transportation Committees from Gov. higher ups, a smoke screen to keep us from getting anything done.