Friday, May 01, 2009

Where, and how much, will NDP, Liberals cut

We're sliding toward a fraudulent provincial election. And both the main political parties and their candidates are playing along.
Their plan appears to seek election with a bogus mandate and then do whatever they want.
Here's the nub. The Liberal budget in February called for two years of deficits. The New Democrats built their platform based on the budget projections. They project three years of deficits, due to some additional spending.
But the budget was way off and neither of the two main parties wants to admit it. So you're being asked to choose based on misinformation.
This is a big deal. The budget calls for a $495 million deficit this year and $245 million shortall next year before a return to balanced budgets.
It's a fantasy.
The budget is based on projections of 0.9 per cent reduction in the GDP in 2009 and 2.4 per cent growth in 2010. It assumed growth of one per cent last year.
But StatsCan just reported the B.C. economy shrank last year.
And two leading economists, both on the province's forecast council, said they now expect a sharper decline this year - perhaps 2.7 per cent.
The Finance Ministry reports on risks to the budget. Each one-point drop in economic growth chops $150 million to $250 million off the bottom line. So the new GDP forecast alone suggests the deficit will be some $320 million more than the budget projects.
That's conservative; the slowing economy hurts revenues in other areas and increases demand for services like welfare. Natural gas prices, for example, are far below the level the government projected in the budget, meaning a shortfall of of some $600 million.
Gordon Campbell says he won't allow the deficit to rise above the projected level. Meeting that target already required spending cuts in eight of 19 ministries. Most cuts are still being identified, though park and campground closures have already been announced.
The worsening economic results mean another $320 million in cuts from a new Liberal government.
Campbell hasn't specified how or where the cuts will come. Voters need to hear that, so they can make an informed choice. The Liberal plan already calls for 10 of 19 ministries to spend less in 2011 than they did in 2008, despite inflation and population increases.
If you believe that's realistic and won't hurt services you or family members rely on, no worries.
But it has been eight years since the Liberals promised to root out waste and unnecessary programs. You would think the services that have survived make a difference in peoples' lives.
Still, you know where Campbell stands.
That's not yet true for Carole James and the New Democrats. The NDP platform includes a fiscal plan and costs for its promises, though some numbers are questionable.
But it's still based on the Liberals' February budget and three-year-plan.
Since those numbers are wrong, James has three choices. Like Campbell, she could pledge to make whatever cuts are necessary to meet her budget targets - to manage by the numbers. She could raise taxes to come up with more revenue. Or the NDP could decide a couple of extra years of bigger deficits would be reasonable. The Harper Conservatives have, after all, decided that four years of deficits are needed.
With barely a week left in the campaign, voters aren't getting straight talk on what should be one of the must fundamental issues in the election campaign.
The deficit is certainly going to be much greater than the budget projected. The way in which the new government deals with it will have an impact on the lives of almost everyone.
Campbell has said he would cut, but not where.
James hasn't offered any clear idea how an NDP government would deal with a projected deficit greater than the one forecast in its platform.
Voters need answers, fast.
Footnote: The fiscal plan also abandoned the Liberals' past practice of including a healthy "forecast allowance" as a cushion against the unexpected. A post-election budget crisis is almost certain. The unknown is how the parties would respond.

Wednesday, April 29, 2009

One poll, and things different and a little strange

It's time to start paying attention to the election campaign.
The Angus Reid Strategies poll released this week raised a bunch of interesting issues beyond the headline news of a tie between the Liberals and the NDP.
That's significant, of course. The poll found the Liberals have the support of 42 per cent of decided voters; the New Democrats 39 per cent; and the Greens 13 per cent.
Given the margin of error, that's pretty much a dead heat, with the May 12 vote coming fast.
People will spin the results. But Angus Reid has a good track record; the company's predictions in last year's federal election, for example, were extremely accurate.
So it's likely the parties are a lot closer than an earlier Mustel. It showed the Liberals 17 points ahead.
Good news for Carole James, obviously. The media perception was that the NDP campaign had been slow to launch and challenged by environmentalists' attacks over the party's opposition to the carbon tax.
But the poll results tell a different story. When the pollster asked about the tax, 30 per cent of respondents said it had moderately or severely affected their household finances; 62 per cent said it had made them less likely to vote Liberal.
The responses don't make much sense. The tax impact so far is minor and offset by other cuts. And the tax makes policy sense. But people don't like it.
Which leads to one of the interesting issues raised by the poll. Green support is at 13 per cent of decided voters, up four points from its actual support in 2005. But the poll found less than one-third of the Green support this time was definitely committed to the party. Angus Reid Strategies analysis predicts a shift of Green support to the NDP, but the carbon tax issue could be a barrier. The Liberals' problem is that attacking the NDP over the carbon tax might win Green support, but alienate other voters.
The poll has some encouraging news for the Liberals too.
Voters don't like or respect the performance of either Campbell or James. But 40 per cent of British Columbians think the Liberal leader would be the best premier, compared with 23 per cent who prefer James.
The findings on the most important issue facing B.C. are also good news for the Liberals. Some 34 per cent of respondents picked the economy. And Campbell got much higher ratings for being able to deal with that issue. (He also did somewhat better on crime.)
Both leaders should be chastened by the polls. Only 29 per cent of those surveyed thought Campbell inspired confidence; 19 per cent said James inspired confidence.
Campbell scored the biggest lead in the areas of strength and decisiveness and the worst ratings for honesty and trustworthiness. James' best relative grades were for understanding the problems of B.C. residents and being in sync with them on the issues.
Assuming the parties' private polls are producing similar results, the strategists should be having conniptions.
Should James try and emphasize competent management of the economy? Or play to her existing strength as someone who relates to average people?
Does Campbell keep attacking the NDP on economic issues, or show more concern for the needs of British Columbians?
It's interesting that what you could call government responsibility issues - health, poverty, homelessness, education and the like - rival the economy issue if taken together.
The poll also suggests a regional divide. Liberal support is softening in the North and Interior and fading on Vancouver Island (Pat Bell and Shirley Bond both might be in trouble, the pollster suggests).
But the Campbell party still has a 43 to 37 lead in Vancouver and its suburbs.
What it all means is that you should pay attention for the next 10 days and vote - unless you truly don't care which party governs for the next four years.
Footnote: You can review the results at here.
You should; it's both fascinating and an interesting chance to compare the data and the media coverage and make your own guesses at what it all means.

Tuesday, April 28, 2009

Speeding, parks and post-election deep cuts

In one sense, the John van Dongen speeding scandal is a sideshow, a distraction from bigger issues.
But it was also telling, especially in light of two other campaign developments breaking at the time.
Van Dongen, who has never struck me as a wild man, turns out to be the kind of driver who makes highways more dangerous. His record was so bad that the superintendent of motor vehicles issued a four-month licence suspension.
That's bad for any politician, but especially for the solicitor general, responsible for both ICBC and road safety.
Van Dongen had promised to get tough on unsafe driving. "There is no excuse for racing or speeding." He said. "People who engage in behaviours like these can expect to face some of the most severe penalties and fines in Canada."
But when he got caught, van Dongen did offer excuses - he was busy and sometimes drove too fast, he said.
Gordon Campbell offered excuses too. The important thing, he said, was that van Dongen had acknowledged his mistake publicly.
Sort of. Van Dongen lost his licence a week before he told the premier. Only then was responsibility for road safety and ICBC taken from him. He initially would not say how many tickets he had received.
And Campbell said he wouldn't ask van Dongen to step down from cabinet. (He obviously has a problem in all this. If the premier doesn't have to step down for drunk driving, why should cabinet ministers who lose their licences for speeding?)
After a weekend of criticism - especially from the families of people killed by drunk driving - van Dongen did the right thing and resigned from cabinet.
It was wrong, by his standards, to stay, he said. (He also acknowledged nine speeding tickets in five years, including two for being way over the limit.)
Campbell apparently has lower standards.
Carole James, after two weeks of sputtering campaigning, seized on the premier's position as an example of arrogance, lack of transparency and hypocrisy. (Campbell had called for an NDP candidate to drop out of the race after he posted some stupid pictures on his Facebook page; the man did.)
Which leads to the two other developments. The news that the government is planning to close provincial campgrounds this summer and lay off park wardens to cut spending.
And a Statistics Canada report that, rather than growing as the government expected, B.C.'s GDP actually declined last year by 0.3 per cent, the first decline in 25 years. Only Ontario fared worse in 2008.
The campground closures and job cuts, according to Environment Minister Barry Penner, are to reduce spending. The Environment Ministry is among eight of 20 ministries to face budget cuts next year,
By 2011, the last year in the three-year plan, the Liberals are projecting that half the ministries - 10 - will have budgets lower than they had last year, despite inflation and population increases.
That reflects the Liberals' pledge to run small deficits for two years before returning to balanced budgets. Campbell has also pledged during the campaign to stick to the deficits forecast in the budget.
That leads to the StatsCan growth figures. The budget is based on growth of one per cent last year and a decline of 0.9 per cent in 2009.
The 2008 number is apparently wrong, off by 1.3 per cent. The 2009 number is suspect.
And lower growth means lower government revenues - about $150 million to $250 million for each percentage point.
Which would leave a returning government, given Campbell's commitment, with no alternative but even more cuts.
If the government is willing to cut family camping opportunities and lay off park wardens at a time when employment is an issue, what lies ahead?
And if accountability on issues like speeding cabinet ministers is a low priority for Campbell, then the public might worry about accountability on bigger issues after the election.
Footnote: The New Democrats also need to come up with answers. Their fiscal plan is based on the Liberal budget. If the budget has inflated revenues, the party needs to say how it will address the issue - spending cuts, more taxes or bigger deficits. The NDP now proposes three deficit years as opposed to the Liberals' two.

Monday, April 27, 2009

Cuts are coming - how deep, and where?

Columnist Dave Obee has an interesting- and accurate - piece in the Times Colonist warning that given the wild optimism of the February fiscal plan big cuts are coming in government after the election. Worth reading here.