Province’s tough budget was right on the money

John
John Crosbie
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First in a two-part series

This seems a good time to discuss the fiscal and economic prospects of our province, as well as the other provinces of Canada and the country generally.

John Crosbie

Economist Wade Locke was appointed senior policy adviser for the Newfoundland and Labrador government’s 2013 budget — an excellent appointment since he is knowledgeable and frank in his conclusions about economic matters.

At the time, the provincial government was forecasting a $1.6-billion deficit for the following year. Locke was quoted in The Telegram as saying, “We have a fiscal problem in this province” but that the future was still bright.

He also said there were a couple of things we had to think about. One was the demographic shift taking place in our province, with the population having fallen by almost 13 per cent in the 15 years following the cod moratorium. The second is our aging population. Our population of seniors will place great pressure on our health-care resources and will create pressures in the workforce, since there are fewer people entering the labour market than are expected to retire. At the time, Locke said potential retirees exceeded new entrants into our workforce by 34 per cent — not a good sign.

Incomes have gone up significantly here, although it’s never as much as people would like. Still, the proof is in the numbers. As Locke noted, “The average weekly wage in this province is above the Canadian average.”

Still, he warned that we had to be careful in how we handled the fiscal situation and suggested what was needed was, “A credible debt–reduction strategy that expands over a number of years. If that’s done carefully and not too dramatically, there’ll be a less negative effect.”  

The provincial government, in its budget, did as it sensibly had to do — even though it might be noted that it and its predecessor had increased spending greatly earlier on.

The fact is, all governments want to do all they can to improve things for the people they govern so that they will continue to have their support and encouragement. This is the case whether the government is elected or an autocratic government in a dictatorial system, since even absolute rulers must try to please the people they have absolute power over, or they may lose that absolute power if they do not.

In my own career in the political system, both provincial and federal, over 27 years, I often quoted Cicero, who I still believe gave excellent advice back in 63 BC. He said, “The budget should be balanced, the treasury should be refilled, public debt should be reduced, the arrogance of office holders should be tempered and controlled lest we become bankrupt.”

It’s excellent advice that every government should follow, but as we all know, this sensible advice is more often disregarded.

 

Next week: ‘Hurtling toward

 financial disaster’

 

John Crosbie welcomes your feedback by email at telegram@thetelegram.com.

 

 

Geographic location: Newfoundland and Labrador

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