Friday, September 15, 2006

Bigger surplus good news, but not for you

VICTORIA - It should be good news for British Columbians. The government looked at the books after the fiscal year’s first three months and found the surpluse will be $600 million more than expected.
That’s thanks to a good economy and you. Income taxes and sales taxes will bring in $542 million more than budgeted. BC Hydro’s rate increase will mean an extra $377 million in profits. The good news is more than enough to offset a $775-million shortfall because natural gas prices are lower than expected.
So instead of a $600-million surplus for this year, Finance Minister Carole Taylor says B.C. is on track to finish at least $1.2 billion in the black.
When most families get good news like that, they think about what to do with the extra money. They consider paying down debt. But they also look at what they need today. Maybe some money should pay for tutoring for a child having trouble in school, or extra help for an aged parent. It’s a question of smart choices.
But not for the government. I asked Taylor if this was a chance for ministries to make another pitch for programs that didn’t make the cut at budget time.
No, said Taylor. There’s a contingency fund for emergency expense requirements, but no plan to look at what could be done with the unexpected surplus.
That’s a shame. And it’s a position that ignores the advice British Columbians have offered the government in prebudget consultations.
You can’t be reckless with this kind of windfall. It would be irresponsible to start some multi-year program only to find there wasn’t enough money to keep it going.
But there are many opportunities for one-off improvements. Maybe health authorities could buy time in private MRI clinics and reduce the long wait for needed tests. Tourism BC could get extra money to launch a pre-Olympic ad marketing campaign. The government could offer tax cuts - perhaps an extra deduction for any company’s research spending that could lead to economic diversification in the province’s struggling northwest.
But those options aren’t on the table.
Paying down debt is important. But the province is already committed to devoting 100 per cent of its budgeted surplus to debt repayment. That, remember, is $600 million this year.
The other $600 million, which was not included in the budget, should be available to meet the public’s needs and expectations.
As Taylor was releasing the quarterly report, she also unveiled the budget consultation flyer that’s to be mailed to every home in the province. It’s a slight document - half the front and back pages are taken up with two big pictures. But it does seek input on budget priorities.
Based on Taylor’s comments on the use of this surplus, there’s not much point in filling it out.
After all, two years ago the budget consultation process produced clear results. British Columbians believed about 15 per cent of any surplus should go to debt repayment. The priority should be improving services, especially health and education.
Last year, the budget consultation committee report was muddled, but the results were much the same. The public wanted a balanced approach to using surpluses, with improved services a priority.
British Columbians recognize the cost of debt. But they also know from their own experience the importance of balance. The mortgage has to be paid down, but the family’s needs today have to be looked after too.
And they know that B.C. does not have a debt problem. The province has the second lowest debt burden in Canada, after Alberta, which no longer has any real debt to repay.
The public’s view so far hasn’t much mattered. The government’s choice is to use all of the surplus to pay down debt, no matter what British Columbians say.
Which leads to obvious questions about how seriously British Columbians should take the coming “conversations” on health care Premier Gordon Campbell has promised. A conversation requires people listening, as well as talking.
For now, British Columbians should be wondering about the point of a budget consultation, given the government’s demonstrated willingness to ignore their clearly expressed views.
Footnote: Fill out the budget consultation flyer, by all means, when it hits your mailbox. But be aware that two years ago - before the election - the government mailed a similar piece to every home. About 26,000 people filled it out. But 23,500 of those forms never really got looked at. Time was tight, so the finance ministry picked a regionally representative 2,550 and tallied the results. The rest were dumped, unread. It was an awfully expensive way to conduct a very rough opinion poll.


Anonymous said...

Heck Paul, we can't be wasting our money on all those programs you mentioned. We need more bucks for the olympics because the costs far exceed what the Premier said they would and according to the Feds. there will be no more bailouts from them. So here we are, with some extra cash to spend but the Premier is very much a skin flint if you ask him to put some of it into social prorams gutted years ago. Only in BC you say.

Anonymous said...

To deflect concerns about the weird bookkeeping methods of the VANOC team backed by the BC Government. "Read my lips 600 Million and that's it".We now see the Finance Minister bringing out the sort of old hat idea that health care will be 100 percent of the budget. This could easily jump up and burn her as folks really do want to get their hips fixed here instead of India. They may even figure out the overruns shown by the Interim Auditor General is more than the health authorities are now asking to top up something. It is time to reign in the spending by those authorities. Maybe check the health authorities wages for a start. Just a thought.

Anonymous said...

Thanks for writing this Paul, it's refreshing to see someone question what we do with these surpluses than just report how big they are.

Also, the "conversations" will go exactly how you suggest. The Campbell crew already have the answers they need. It's all about the optics -- kind of like the open cabinet meetings, remember those? Once they roll out their privatization scheme(s) they can say they consulted with the people and label their critics "special interest groups".

RossK said...

If we've been fooled once by the budget 'consultation' should we allow ourselves to be fooled again by the upcoming 'conversation' on healthcare which, according to Dirk Meissner at least, was also a subtext to Ms. Taylor's announcemnt.


Anonymous said...

Hi Paul. I always get a kick out of BC politics. I love reading the papers when I am out that way. I live on the other side of Canada - in New Brunswick. Where we had a little "politics" of our own yesterday. :>) I love BC and hope to spend three weeks in Victoria area next June. Think I will add this site to my blog roll ... just have to figure out how to DO that . Regards - Barbara