Tuesday, February 17, 2004

Budget '04: All in all, I'd hoped for better

Budget '04: All in all, I'd hoped for better
By Paul Willcocks
VICTORIA - Less than an hour to tell you something useful about the shopping bag full of binders I got in the budget lock-up.
First, despite some huge problems, I'd prefer this to the NDP budgets I covered. Ministries have come in on budget; the government is on plan. There is much to praise when people do what they said they would do.
Second, the budget is balanced. A lot can go wrong, and Finance Minister Gary Collins hasn't left his usual plump cushion. But it's a real and reasonable projection, without trickery.
And third, the LIberals deserve credit for having cut government spending in many areas wisely and without serious harm.
That's the good news.
The bad news is that the budget has been balanced by chopping spending, not improving the province's economy. The Liberal vision - clearly set out in the New Era platform - was that tax cuts would lead to increased economic activity which would allow government to provide needed services. The reality was that tax cuts knocked a huge whole in government revenues and didn't provide the promised economic growth. The march to a balanced budget was made to the tune of spending cuts, some damaging.
The Liberals previewed their election campaign with this budget. It talked a great deal about how much money would be flowing to health and education over the next three years. But a check of the fine print revealed the benefits wouldn't start to flow until the end of the three-year plan - after the next election.
Meanwhile, things will be very tight.
Health care spending across government is actually projected to go down slightly next year. Even in the direct health ministry patients will be squeezed by a budget that is currently virtually frozen. Within the next two months about $130 million in new federal money will be added, but that's still only a 1.5-per-cent increase. It would take at least three times that amount to keep pace with rising costs and population growth. The health authorities - already on the edge - are going to have a desperate struggle to maintain services.
The money available for education is increasing by less than one per cent next year, and while public school enrolments are falling, there's huge demand for post-secondary training. Costs and demand are going up, and the government isn't providing enough money to meet the need.
In fact the Liberals tightened the noose around post-secondary education. B.C. had provided about $30 million in grants to needy students. But the government killed the program Tuesday. Universities and colleges will get the money instead, with their existing budgets cut to offset the increase. Despite all the talk in the Throne Speech about increasing post-secondary places, the budget for the coming year has not been increased by one dollar.
The children and families Ministry also faces both a tough budget cut and major uncertainty. Another $70 million is to be lopped from spending this year, almost entirely from support for abused and neglected children. And the budget reveals that the shift to new regional authorities - which former minister Gordon Hogg thought could start in 2003 - may be delayed until 2007.
Finance Minister Gary Collins said the budget was "a turning point."
I don't buy that. The turning point will come when the B.C. economy becomes one of the strongest in Canada and throws off enough government revenue to allow creative investments in our long-term future. The problem with focus on cost-cutting - for government or business - is that you can cut your way to disaster. A company that doesn't invest in its new products, a province that doesn't invest in the next generation - both are foolish.
Politically, the challenge may be trust. Gordon Campbell has to go to the voters and convince them that he's ready to make their lives better when he gets the chance.
It's a tough sell.
Footnote: Sorry Heartlands, you're out of the picture. This budget offered little to indicate an awareness of the problems of the province's regions. A small amount for pine beetle and fire harvest, some money for offshore oil work, but much more for the Olympics and no time commitment on forest tenure reform.

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