September 5, 1997 Halifax Herald

Honesty might clear up murky financial waters

When managing a business, a manager must, if it is to be kept prosperous, make provisions in financial plans for future growth and renewal of the plant. Seeing as this is a must for success in private enterprise, it would seem only logical to assume that it would also be a must for government management.

However, in Nova Scotia it appears that little or no realistic provisions are made in current or projected provincial budgets for funds needed to undertake deferred infrastructure repairs, and cover other items which were also deferred by successive budget cuts. If realistic costs estimates for these items were projected and inserted into Nova Scotia's budget and financial plan, the imaginary surplus would be a huge deficit.

How does one arrive at this conclusion? One needn't be a financial whiz to do so. For starters, consider the condition of the province's roads and bridges. Many were so severely neglected because of deficit control measures that they are in a state of advanced decay. Monies required to bring them up to snuff will be substantial.

Add to this the cost of repairs needed to rehabilitate neglected public buildings, parks and so on, and the back wages owed to public servants because of the public service wage freeze - and gasp at the figure.

Then remove the murky waters riled up by politicians and bureaucrats to make the financial mess seem presentable, and you have an awesome deficit.

In order to clear up the murky waters of public finances, and keep them clear, what we need from government is far less creative bookkeeping and far more straightforward accounting. To begin such a process, there is a need for politicians to curtail using budgets as a tool to run re-election campaigns.

Instead, they should use an approach similar to the one used by Ralph Kline when balancing Alberta's budget. He honestly laid it on the line with the voters, and was rewarded with success and their support.

It’s also refreshing to note that in the process of doing what he was elected to do, Kline didn't waste time looking to the past for scapegoats to blame for his predicament. In Nova Scotia, under the former Savage regime, we got a constant history lesson about the shortfalls of the previous Buchanan government. Every time something went wrong financially, they laid it on John. Under Russell MacLellan, will we still hear the same tired refrain?

Anyway, it wasn't a sudden conversion to responsible governing practices which caused provincial politicians to direct their efforts towards trying to bring public finances under control. The motivating factor was pressure from credit rating agencies, not a moral awakening.

After the last election, if a credit crunch had not occurred, I imagine that the Liberals, who sometimes come across as “holier than thou art,” would have continued with the reckless spending that the Buchanan government had initiated. However, a credit crunch did occur, and it mandated that any party which formed a government in the 1990s - Liberal, Tory, Reform or NDP - had to take steps to clean up the mess.

Since the credit crunch arrived and corrective steps were instituted, measurable progress has been made in deficit control. Luck has played a large part in the process: the arrival of the era of low interest rates has been a godsend for governments and the poor. If high interest rates had arrived instead of low rates, the process would have gone into a tailspin; and it would have been a catastrophe with a capital "C" for poor people and the essential social programs they rely on for bare existence.

However, even with the luck of low interest rates, the balance of funds required to bring the financial mess under control have been found by mauling essential social programs, and by raising taxes to backbreaking heights.

Yet while taxes have been raised and essential programs have been hit hard by cuts, non-essential programs, which politicians view as vote-getters, have been left alone or even enhanced. For example, one can still get abortions and other birth control procedures at public expense, and one can be publicly paid for maternity leave and other non-essential goodies; while essential programs such as child dental care, medicare, university and other educational funding, etc., have been cut.

It would not be out of line to state that we have politicians with strange priorities in this country!

As another hard Canadian winter approaches, if politicians and bureaucrats - who are mostly well-fixed financially and can afford luxury vacations in warmer climes - would take a few moments to reflect upon this scenario, they might become more compassionate. Many millions of elderly and poor people in this country are broke and, as a result, going to bed cold and hungry. Because of heavy tax burdens and cuts to programs, they are hard- pressed to fund even the essentials of life. Exotic vacations, for them, are make-believe dreams. Relief is needed now!

The gap between rich and poor in Canada grows wider on a yearly basis and those who fit into the poor classification are becoming legion. Are we becoming a country where only the well-to-do can afford proper dental care, education and so on? In many respects its beginning to seem that way.

I don't believe that the poor get any consolation from the fact that they can get free abortions and other non-essential services while they freeze and go hungry!

Daniel N. Paul


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