Yesterday the Progressive Conservative government released
Alberta's budget for the 2010-2011 period. To the shock of I believe
almost everyone, the slash and cut expected was not there, rather a 6% increase in spending.
As conservative as I am, I have to say this budget was far from fiscally responsible. Does this make the budget a bad move? Let me surprise you all by saying
NO. Since the GOA had no plan on how to cut spending effectively I think we are much better off to ride out the storm, even though we will completely spend the sustainability fund. We have witnessed the cuts that were being proposed by the GOA in the
PDD sector as well as assisted living. The GOA was not starting with cuts to the executive and bringing down the costs of administration, rather taking it from the people that rely on this funding.
You have to remember this is a budget to place the money in certain areas, and provide an idea of where the funding will go. Will the increase in health care provide better delivery or make it sustainable? Far from it, but what it does do is keep the band-aid on it until someone puts a plan forward. Since the unions contract is due in March I think much of this increase will go to cover off the increase. Paying off the deficit in health care was also a smart move, after all it is still GOA debt even if it is not on their books.
The extra money in our education system is also a key move, but again the spending is not being done wisely. We will not receive any improvements due to the increase, it will simply cover off the additional 4000 students expected to enroll.
The trimming we saw in the other areas again are not planned out, and will simply be handed over to the executives to make the cuts. I do not like this simply because executive will never voluntarily make the cuts that affect them. As shown in previous posts ridiculous amounts of money is spent, before the front line sees a dime.
Now I could go
in depth in every dept. on the budget and what could be done to effectively reign in spending without affecting the services, but this is for another day. What I think the biggest question on this proposed budget to be back in black by 2012, is do they believe that in 2012 they will actually increase revenue by $6 Billion dollars and only increase their spending by $1 Billion dollars. As far as the estimates on the oil and gas price forecast I think they have made reasonable forecasts on a very volatile commodity. For their sake they better hope they hit it right, because our revenue forecast is heavily reliant on it. It is a gamble and high risk game they have chosen to play here, which could take them either way. Hero to Zero is a fine line.
We can complain that we are draining the rainy day fund, but folks it's pouring. Like it or not the world is in recession. Does this mean we need to spend until it is gone? Not in my opinion, it could however be used this year while they carefully plan out how to get our spending under control. The resources will not be there forever, so by not having any money going to a future savings account they also set us up for a future pitfall. They need to have a plan in place, and so far I see nothing of the sort.
Department specific budget can be found
here. The spending buffet is still open and now it includes dessert, but I wouldn't trust them to do it any other way.
The person I felt the most sympathetic for was Dr. Morton, who had to sign his name to something he never wrote. Well known as a fiscal hawk, and the perception that he was being placed in the position to reign in spending, is nothing short of a strategy. I have to say that I do not blame him for getting choked up at the end when he delivered the budget, I am sure it tore him up inside to present it.
B.C. also released their speech from the throne yesterday. Some of the most interesting points from it I find are: - "New forms of schooling will be developed to provide greater choice and diversity, centred on students' special interests and talents."
- "Enable the establishment of neighbourhood preschools for four-year-olds and three-year-olds within communities over the next five years."
- " A new Family with Children Property Tax Deferral Option will be provided to all B.C. families with children under the age of 18. Those families will be given the right to defer their property taxes under a new property tax deferral program similar to the one already available to seniors and those facing financial hardship."
- "Voluntary, full-time kindergarten for five-year-olds will be implemented this September. It will be fully funded and in every school by September 2011."
- " Innovation in health-support services, new hospitals and public-private partnerships will be introduced to give patients new choices, to reward performance in health delivery and to protect public health care for future generations."
Take from it what you will.