Tuesday, September 01, 2009

5.6 billion in the hole over four years and somebody is eventually going to have to pay!

Colin Hansen trotted out his blue print for surviving the recession, a financial plan that will see the province plunge into deficit financing over four years, cut back on grants to a number of groups and agencies, and cut $3.4 billion in spending on administration, private contractors and discretionary programs over the next three years.

There will still be spending increases during that period of time though, 3.5 billion in program maintenance, but not in new spending. Health care will get a bump this year, but there will be limits and expectations of Health Authorities to work within those guidelines, meaning we suspect longer waiting times and struggles for those on the front lines and those that visit them.

Children and Families will see their budgets frozen, this despite the obvious that in a declining economy their services will be perhaps the most impacted of the social service agencies.

And whatever happened to Gordon Campbell's trendy Green agenda, those fanciful days of shaking hands with Arnold, of proclaiming that the environment must be protected? Well in this era of financial distress, environment took a hit, with a 20 percent cut to the budget.

To their credit there will be some funding increases to some key areas such as welfare, shelter for the homeless and forest fire protection and even the start of all day kindergarten for some in 2010 and a full impelmenation by 2011. Though the latter project will no doubt provide challenges for already financially strapped school districts.

Many British Columbians will face increased taxes, MSP payments and of course the introduction of the Harmonized Sales Tax, but there will be some breaks along the way, a reduced tax rate for some and a credit on HST when it comes to energy payments, but overall we'll be making do with less and perhaps finding less in our bank accounts at the end of the day for our troubles.

The government appears to be suggesting that business having been outlined of the benefits of an HST era of tax collection, will provide some breaks for consumers, a rather optimistic thought one would think. Maybe they will, maybe they won't. but regardless, it's an issue that the government is washing its hands of, happy to be finding some extra funding coming in courtesy of their fellow travellers in governance in Ottawa.

Ominously, this may just the start of the bad news cycle, the next test of the Government's resolve and our patience may come when the main budget comes due in February.

If the financial figures aren't to Mr. Hansen's liking then we may see a number of other initiatives in place that will make Tuesday's budget update speech look like the halcyon days of government spending. And after all, if the government has any hope of surviving the recession era troubles of our times, they'll want to get as much of their hard knuckle stuff out of the way early on in the mandate, so as to ride out the storm to the next election.

The only problem is that when it comes to telling it like it is, there's little left in the credibility cupboard for British Columbians, from that optimistic forecast in the February budget, to the recent electoral campaign, which saw the Liberals continue to campaign on those rosy numbers despite growing evidence to the contrary, it may be hard for us not to wonder if we really know the truth here anymore.

Even today, that highly touted financial voodoo economic outlook followed as late as May, has come back to haunt the Liberals. That with the revelation that the Finance Minister indeed knew that the numbers as outlined weren't going to work out, a fact that both Hansen and Premier Campbell chose to keep to themselves, leaving them to have that deer caught in the headlights look when asked about it today.

Kind of sounds like the old days of the Roman empire, where no one wanted to share the details of the decline.

And of course history has shown us all how that worked out...

The full budget details can be found from the government website here, with the Ministers update speech available here.
The media reviews can be found below.
Vancouver Sun-- B.C. to run record-breaking, $2.8-billion deficit this year
Vancouver Sun-- B.C. increases budget for welfare, kindergarten and forest fires
Vancouver Sun-- Monthly Medical Services Plan premiums to rise six per cent
Vancouver Sun-- The B.C. budget and public education
Vancouver Province-- Budgeted deficit of $2.8-billion is first of four: Finance minister
Vancouver Province-- Little mention of HST's impact on consumers
Victoria Times Colonist-- Finance minister has pulled off his Mr. Nice Guy mask
Victoria Times Colonist-- A tough as nails budget
Victoria Times Colonist-- Most British Columbians will pay higher taxes
Globe and Mail-- B.C. enters a decade of austerity
Globe and Mail-- B.C.'s green reputation fading
Globe and Mail-- B.C. to increase health premiums
The Tyee-- Budget gets low marks on education
The Tyee-- BC budget includes record $2.8 billion deficit, cuts, optimism
Georgia Straight-- B.C. finance minister Colin Hansen's budget forecasts record $2.8 billion deficit
Georgia Straight-- B.C. Liberal budget includes savage cuts to core arts funding
CBC-- B.C. heads for $2.8B deficit
CBC-- Business groups cautiously support B.C. budget
CBC-- B.C. budget fails to protect health care, education: critics
CBC-- B.C. budget bites into green programs
Photo above from CBC Website

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