Belts, get ready to be tightened

The free-spending ways of the last few years are coming to an end, writes online editor John Gushue.

Here's my bet for the next provincial budget: it's going to feel like a great, big cold glass of water.

First, I'm going with the conventional wisdom that the PCs are going to win the election on Oct. 11, and that the Blue Book released this week — strong on the passion, not nearly so much on the details — sets the table for the fiscal agenda in the year to come.

Caution, prudence and even "fiscal constraint," as they word it, are themes you'll find through the Blue Book, as well as modest spending increases so tentative that PC Leader Kathy Dunderdale underscored that the whole package is contingent on there being money to pay for them.

Which is interesting, given that Finance Minister Tom Marshall tipped his hand in August that higher-than-expected oil production meant that the government was poised to collect an extra $600 million this fiscal year. That's a windfall that would be the envy of any other province.

The disclosure came amid a summer-long spurt of spending announcements that cast more than a few doubts on the Tory image of cautious stewards of the public purse. To be honest, many of them were actually re-announcements, all part of a PR campaign to keep Dunderdale and her ministers in the public eye with non-stop announcements about fire trucks and road paving.

All of those announcements flowed from April's $7.3-billion budget, which was the definition of a pre-election spending spree. Marshall had buckets of cash for health care, home-heating rebates, recreation, tourism … well, everyone. None more so than health and education, though, which together account for 58 cents of every dollar that government spends.

And, my, how that spending has been mounting.

In 2005, the government passed a budget of about $4.4 billion. In other words, the Newfoundland and Labrador government has increased its spending by two thirds in just six years.

Granted, government was doing what it called catch-up work on hospitals, schools and roads, with maintenance, refurbishments and construction that had been put off during years of forced restraint.

Increases at every level

But spending at every level seems to have increased. Consider the public service. When the Tories took office in 2003 (and, let's not forget, before a year or so of serious belt-tightening), there were 6,942 civil servants in core government departments, and not including health and education boards and government agencies.

A count given to my colleague David Cochrane this spring put that number at 8,429, making an increase of about 21 per cent.

That's quite an increase, no matter how you explain it.

No wonder, then, that the former auditor general John Noseworthy — who has a curious transition to PC candidate, in Signal Hill-Quidi Vidi — called the level of recent spending by the governing Tories unsustainable.

Coming up

In this spring's budget lockup, we peppered Marshall with questions about the budget, and the pressure he had been under to spend in an election year. Marshall, who had formerly had a more hawkish point of view on managing the debt, was unapologetic about how there appeared to be money for everyone.

"We're going to have lots of revenues," Marshall said, adding that he expected no complaints from ordinary people. "People are paid well, and we cut their taxes."

The Blue Book, though, has a much more cautious tone. [You can read the full text here.] 

"Implementation of our priorities will be phased, if necessary, to accommodate fiscal constraint," the platform says on its third page - the kind of warning that, in effect, says that every promise is hardly cast in stone.

The year-over-year spending increases were remarkable in the last term.

From the looks of it, a re-elected Tory government will have a different point of view on spending.