- Ms Kaye is a Tyee Builder. You can be, too.
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Lib Budget Unlikely to Restore Cred Campbell Lost
More surprises this time, and Falcon's forecasts won't be tested until after next election.
Gordon Campbell and Kevin Falcon in 2010: Passengers remember who was driving.
When Finance Minister Kevin Falcon stood in the legislature Feb. 21 to present his budget for 2012-13 and forecasts for two further years, he knew British Columbians won't see audited results until July 2013, two months after the election.
Budgets are as much political statements as lists of figures. If the last Angus Reid poll is correct, Premier Clark's government is in danger of being devastated with 27 per cent of those who voted Liberal in 2009 now intending to vote for the B.C. Conservatives. Her budget may have been an effort to court that lost vote, but Conservative leader John Cummins was quick off the mark attacking the budget, and getting himself in the news cycle.
The damage to the Liberal brand may be so severe that no budget trickery can erase it.
Liberal budget figures suffer from the credibility gap Gordon Campbell created when he promised one thing before the 2009 election and surprised everyone just weeks afterward. All that can be certain about Falcon's budget are things that can be experienced before the May 14, 2013 election. Those include:
Reneging on the promise to eliminate the 2.5 per cent small business tax, saving government $281 million;
Increasing MSP premiums by a further four per cent effective Jan. 1, 2013;
Privatizing the Liquor Distribution Branch; and,
Up to $1,000 for a seniors' home renovation grant that is inadequate to offset the HST.
Nothing nailed down until 2014
The untestable assertions in Falcon's budget include a 2.5 per cent increase in total expenditures after repaying the federal government for the HST transition funds, and a 2.8 per cent increase in total revenue for 2012. For the election year he projected further increases of 0.8 per cent in expenditures and 3.5 per cent in revenue.
You can't bet on those figures being even close to accurate; as usual, it looks like the Ministry of Finance underestimated revenue. It is also unlikely that expenses can be controlled as shown in the budget without a backlash the Liberals will find intolerable.
We'll see three more presentations of provincial financial figures, in September, November and again next February with another budget, but none of those numbers will be subject to an audit until after the next election.
As suggested in the days leading up to his budget presentation, Falcon's budget included a forecast that his 2013-14 budget will be balanced, despite the loss of almost $500 million per year windfall the government received when it admitted the HST was not revenue neutral. It will be July 2014 (14 months after the election) before we see audited financial reports for that key election budget.
Volatile gas
Governments of all political stripes hope that economic growth will allow them to escape the hard alternatives of raising taxes or cutting services. Ontario is facing a deficit crisis; its $17-billion deficit is forecast to balloon to $30 billion if numerous drastic cuts aren't made, or taxes raised. Alberta, by contrast, projects its 2012-13 deficit of $886 million to disappear in 2013-14 as government revenue grows by 10 per cent per year for the next two years, led by phenomenal growth in revenue from bitumen. Falcon's projected revenue growth is less than a third of Alberta's; he must worry about natural gas prices.
The 2012-13 Alberta budget assumed natural gas prices would average $3 per gigajoule, while the last B.C. budget assumed $3.60 for 2012-13. Alberta assumed $3.50 for 2013-14; B.C. assumed $4.20. B.C. budget documents indicate that for every $1 change in the price of natural gas, government revenue changes between $315 million and $365 million. Falcon's 2012 budget reduced assumed prices to $2.52 for 2012. The budget document said: "In 2013/14, natural gas royalties are expected to increase by 64 per cent due to higher volumes, prices, and an increase in gross royalty rates, which reach their maximum when prices are above $3 CDN per gigajoule (at plant inlet)." For this year, if Alberta is right that the price will average $3, the government will have about $180 million more in revenue than indicated in Falcon's budget.
In his 2011-12 budget, Falcon assumed real GDP would grow by two per cent in 2011, 2.6 per cent in 2012 and 2.7 per cent in 2013. This year Falcon lowered the assumed GDP growth to 1.8 per cent for 2012 and 2.2 per cent for 2013. Provincial budget documents indicate that for every one per cent change in nominal GDP, government revenue changes between $150 million and $250 million. The difference in Falcon's GDP growth assumptions between 2011 and now accounts for about $120 million less revenue this year.
Advice for Dix
Falcon's budget shows provincial debt increasing to over $66 billion by 2014, but that does not include "off-book" debt (remember Enron) shifted to BC Ferries or deferral accounts at BC Hydro, let alone billions in contractual commitments for those P3 projects so favored by the Campbell-Clark government. The growth in debt, from $33.9 billion in 2001, makes many people shake their head and further question Falcon's figures.
Adrian Dix would be wise not to commit to what an NDP government would do until he has the benefit of not only seeing provincial financial data from the 2013 budget, but also seeing other economic data over the next year. In the meantime, we will continue to see the Liberals strain their credibility by not only making untestable claims about their situation but also making claims about what an NDP government would do.
It will come down to who the voters are willing to trust.
[Tags: Politics.] ![[Tyee]](http://thetyee.cachefly.net/ui/img/ico_fishie.png){kind=small}
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- ...while on the streets, pirates and ninjas put aside mutual animosity to join student protests
30
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Henry Dorsett Case
13 weeks ago
"off-book" debt
This kind of mumbo jumbo is why N. America is failing and its our bloody fault for allowing it.
ron wilton
13 weeks ago
The cabbage patch preemie's
The cabbage patch preemie's fallback of always pushing the replay button on her eight track player about the evil of the NDP way back when, has worn through the fabric-ation of which it was constucted.
She persistently asks the NDP to tell her what 'they' would do if they were the government, not realizing this is a glaring admission that neither she nor her 'renowned' advisors have a clue about proper governance.
The flighty one missed the sailing when he 'deferred' increasing the corporate taxes.
If the Orient are so effusive about flooding our shores with 'new business', I doubt they even contemplate or care about paying a fairly paltry percentage of potential profit in taxes.
I think the fhe flighty one actually believes that he will someday be the emperor of this new world of BC (Bring China), but alas, with every oath he utters, he looks and sounds more like his 'illustrious' mentor.
Methinks it is time for the preemie to push the 'eject' button on her eight track machine.
lowball
13 weeks ago
We tend to forget that most
We tend to forget that most of these jump-the-fence shills were once members of the old Social Credit crew.
Skywalker
13 weeks ago
Oh when will it all end?
The lying liberals are now trying to woo votes from the conservatives by making the population suffer because they (lying liberals) don't know how to run a peanut stand. The height of foolishness is to one more time mention the 90's - after 11 years of these clowns - as though the public can't see through the smoke as to who is really responsible.
Debt doubled and not including off-book debt - whatever that means - liars the lot of them.
Robert Rogers
13 weeks ago
Fed & Provincial NeoCon Bum Boys Singing From Same Sheet
What credibility? How could more than doubling the debt while selling the rest of the public assets possibly be construed with any credibility by anyone but another NeoCon? This relentless transfer of public wealth to the .01% will continue until either there is nothing left and the population is starving or we stop these criminals. Isn't it interesting how their corporate media both provincially and federally don't even bother to consult the democratically elected opposition parties; instead begging for the opines of their shills from the Fraser Institute or some other fascist "think tank". Their criminal modus operandi is all well documented in Naomi Klein's must-read book "Shock Doctrine". This should be required reading for every citizen living in a democracy around the world. If it was, we wouldn't re-elect NeoCons, we would arrest and charge them for their crimes.
Luck
13 weeks ago
BC PEOPLES BUDGET
WHERE IS THE JOB CREATION TO PAY FOR THIS BUDGET
HELLO, WHERE IS THE JOB CREATION TO PAY FOR THIS BUDGET
IF WANT TO OPEN UP THE NATURAL RESOURCES YOU NEED THE FED GOV ONSIDE, ENVIRONMENTAL CONTROLS IN PLACE,FIRST NATION AND A MARKET.
THE LIBS HAVE DONE NONE OF THIS. THIS IS MERE SMOKE AND MIRRORS.
WHY WOULD ANYONE WANT TO PRIVATIZE LIQUOR STORES IN BC?
IT IS A CASH COW LIKE ICBC AND HYDRO IF HANDLED CORRECTLY.
IF THE LIBS REALLY WANT TO SAVE MONEY, THEN REDUCE THE SIZE OF CABINET THAT GORDO DICTORALLY INCREASED.
ELIMINATE ALL THE HIGH PAID CONSULTANTS THE LIBS HAVE IN GOV,
BUT MOST OF ALL,
INVESTIGATE THE COZY RELATIONSHIP DOLLARS THAT TELUS HAS WITH LIBS.
START AT CALL CENTERS AND THEN HOW GOV MINISTRIES ARE MOVING INTO TELUS BUILDINGS ACROSS BC.
THIS MAY TURN OUT TO BE THE SCANDAL OF THE CENTURY ON MISAPPRORIATION OF TAX DOLLARS.
WE ASK, WHERE IS THE PROV. NDP OFFICIAL OPPOSITION PARTY THESE DAYS.
Vox.Pop
13 weeks ago
The Gang that could never shoot straight.
Another deceptive effort from the Scam-Gang. More tax credits (that preferentially benefit the rich), possible taxes on their friends in Big Business (if they win the next election) & selling off some our assets for a one shot revenue boost (like selling your car to pay your VISA). Really, is this the best that this bunch of lame ducks can come up with? If so, they are toast in 2013 - they'll be lucky to get 2 MLAs elected (just like Brian Mulroney when he pushed through the GST).
Vox.Pop
13 weeks ago
The Gang that could never shoot straight.
Another deceptive effort from the Scam-Gang. More tax credits (that preferentially benefit the rich), possible taxes on their friends in Big Business (if they win the next election) & selling off some our assets for a one shot revenue boost (like selling your car to pay your VISA). Really, is this the best that this bunch of lame ducks can come up with? If so, they are toast in 2013 - they'll be lucky to get 2 MLAs elected (just like Brian Mulroney when he pushed through the GST).
Vox.Pop
13 weeks ago
The Gang that could never shoot straight.
Another deceptive effort from the Scam-Gang. More tax credits (that preferentially benefit the rich), possible taxes on their friends in Big Business (if they win the next election) & selling off some our assets for a one shot revenue boost (like selling your car to pay your VISA). Really, is this the best that this bunch of lame ducks can come up with? If so, they are toast in 2013 - they'll be lucky to get 2 MLAs elected (just like Brian Mulroney when he pushed through the GST).
Cynic
13 weeks ago
It's so tiresome isn't it? So
It's so tiresome isn't it? So this is politics, the doling out of favours, these numbers go here, those numbers go there, sorry, no numbers for you. After all, resources are, you know, "scarce". Believe.
Meanwhile, the elite are above money, above government, because they control the numbers. So "here you go you fools. Fight over these numbers, have a good debate, trot out our economists to apologise for it all."
Deliver me. Without money reform, the lunacy persists.
Okanagan Orchardist
13 weeks ago
It is easy enough to criticize...
I'm no fan of the BC Liberals, or of the Federal conservatives, but sometimes you have to feel sorry for them. At this particular point in time I think we all agree that we are going to have to tighten our respective money-belts. As suggested it is no time to sell the car to pay your VISA bill, but it appears our governments are no different than a lot of its citizens whose VISA bill is now greater than their monthly income. If that is the case the citizen will be forced into downsizing, or, as in the case of Greece, file for bankruptcy. I want my OAP to continue, because if it doesn't I'm up the preverbial creek. That's where our governments are now, particularly, the province of BC. So, help out. Come up with some suggestions that Christy can use. We know it was there fault, but what can we do about it? We know it was the fault of the Greeks for their high flying spending and their penchant for not saving, unlike the Germans, the Dutch, etc.
Skywalker
13 weeks ago
But Orchardist
As it is with any recovery program you first have to admit that you are out of your depth. Maybe that is where the BC Liberals should start. They might get some [positive responses. Till they stop denying that they created this mess with a long line of failed policies designed to help their friends at the expense of the average working stiff, till they stop making every excuse from the NDP made us do it to it is the fault of the teachers, I'm not very disposed to help them with anything past directions to the door.
RickW
13 weeks ago
Okanagan Orchardist
The incentive needs to be there for us all to pull together. It's much like this program I was listening to about productivity. The gist was that employees should get behind the employer and give 110%. That's all well and fine, but the stats show that: A) 80% of Canadians are employed by businesses that are five years old or younger; and that B) most new businesses fail. Of those that succeed, there is a very good chance they will be bought up, and that's when the down-sizing begins. In most cases, the employee who gave the 110% is cast aside.
Likewise, this government hasn't done much to encourage the proverbial team spirit.
When was the last time something like this happened in Canada:
http://articles.businessinsider.com/2012-02-02/lifestyle/31016100_1_bus-drivers-corporate-greed-drivers-and-other-workers
RickW
13 weeks ago
Okanagan Orchardist - PS
If you are concerned about your OAP, you should do what many Canucks are doing:
http://www2.macleans.ca/2011/03/08/retirement-649/
Frank
13 weeks ago
Orchardist
If you keep losing battles and the generals that have been in command turn to the army and ask for ideas you know its time for new generals.
As you said the BC Liberals got us here and there is nothing in their history to suggest they will get us out. So why don't we get some people in that want to try a different direction?
zalm
13 weeks ago
I think I missed something
Where's the part about raising the property transfer tax on single-family dwellings to 3% on all principal residences, to 5% on sales over 1M , 10% on sales over 3M and 25% on sales over 10M? Where's the capital gains tax on principal residences? Where's the resident credit of 25% on the above amounts?
Whole lotta opportunities to make an extra $3 billion were missed here, and I'm not impressed that our odd-job realtor-cum-finance-minister couldn't see his way clear to improving revenue at the expense of people who print money for a living, especially those who want to get their printed money out of their overseas companies before the Communist Party seizes their assets.
Kevin Falcon - he gets my vote for the winner of the Elmer Fudd Award for blowing away wabbits.
Frank
13 weeks ago
One more thing
Let's recall that the auditor general :
"reprimanded the province last year for allowing one of its largest Crown corporations, B.C. Hydro, to improperly defer expenses to future years. The practice makes B.C. Hydro’s bottom line look far better than it really is, while placing a hidden debt burden — billions of dollars — on future generations. In business outside of government, that’s sometimes known as fraud."
and
"“In British Columbia,” he wrote in a scathing report, “if a [publicly-traded] corporation were given an audit opinion with a reservation, the British Columbia Securities Commission would normally place a ‘cease trade’ order against the corporation. The public corporation then runs the risk of being delisted by the stock exchange on which it is traded.”
Worse, it’s nothing new in B.C. “During the last 15 years, this office has issued qualified audit reports on the provincial financial statements 12 times,” Mr. Doyle said. “For a government that strives for transparency and accountability, that’s unacceptable.”"
excerpts taken from this link
http://blogs.theprovince.com/2012/02/21/brian-hutchinson-faux-b-c-budget-wont-fly-this-time/
Simply put, the Liberals are liars. They indulge in practices many consider to be fraud.
DSchreck
13 weeks ago
correction
Correction: The natural gas prices assumed in the Alberta and BC budgets are almost equal; they appear different because BC's is on the basis of plant gate price while Alberta's is on the basis of distribution hub.
dorothy
13 weeks ago
"Kinsella, the BCR gang, &
"Kinsella, the BCR gang, & the rest of the swindlers should really be strung up on the nearest lamppost. Maybe then we'd get some honesty in govt."
Some supposedly wise man said once that the best government a country could ever have would be one consisting of people running it the last seven years of their life. If they knew there was no after-politics golden future to stash things away for, they might actually bend their minds to trying to do a good job, so they would at least be buried with some 'cred'.
jimmmmy
13 weeks ago
fire sale
the falcon budget is a prelude to a fire sale or privatisation of public assets. which is probably giving gwynn morgan a "woodie" . i belive he is currently calling the shots in the sun-setting soc/lib coalition .
freewilly
13 weeks ago
we need help forget ideology
I havent studied the budget in any detail but from what I gleen its the same old.
Old warn Ideological bents keep swaying the BC government in the wrong direction.
Does it not make sense, that even in business when one is purchasing a service or product to go directly to the manufacturer of that particular product? Wether it be a company or an individual? Government is faced with the same issue. The notion that Public private partnerships would be a benifit to government is a joke. Its like asking your friend Joe to find someone to do a job for you, and pay Joe a finders fee.
In BC and other Provinces we have abdicated the responsibily to manage the public good to private consulting companies, instead of dealing directing with those individuals and unions that really provide the core services that British Columbians need.
zalm
13 weeks ago
Fire sale - again
What's with giving away my tax dollars again? Giving people $10,000 to buy a new home? In a real-estate bubble?
http://www.bcbudget.gov.bc.ca/2012/homebuyers/2012_First_Time_Home_Buyers_Fact_Sheet.pdf
Nobody gave me any money to buy a house - not even my folks. Yet now this idiot government, who hasn't enough money to provide for judges or sheriffs for criminal trials, who hasn't the money for kids in care or the disabled, who can't keep elders together in a home, and signs labour contracts that employers can't afford to pay - now they want to dole out our taxpayers' money to people who should be renting, but are tempted by the greed train that's always "just leaving the station right now - last chance to get on board!"
What a pile of bullshit! Premier Perky will do absolutely anything - sell anything - to try to get elected! But she has absolutely no idea how to run a province. and she's not doing these "young people" any favours. Getting them deeply into debt in a market that's poised to turn down just like the rest of the world has done is the dumbest thing anyone could do for them.
Oh, but it won't happen here... because we're the best place in the world!
Campbell's gotta be shaking his head sadly in London right now.... and for once, I find myself of a similar mind.
jimmmmy
13 weeks ago
zalm you sound like my
zalm you sound like my brother. my dad lent me at no interest the money for the down payment on my first house. he would not however lend my brother the money for his. the reason is simply that my brother mistaking claiming he was a socialist refused to pay personal debts. please read marg. atwoods little book called "payback" or watch it on the cbc massey lectures
jimmmmy
13 weeks ago
bcr
dorothy as i suggested to mr t. when he wrote on this crime. once miz clarke signed a 20 year deal with the para-military police [rcmp] the box of evidence implicating her and her cabinet diaappeared , end of story, unless?
dorothy
13 weeks ago
Zalm
Don't you get it - they're trying to keep up the bubble! That can only happen if they entice marginal buyers into going for't, for the capable ones have already bought.
Why do you think CampBell bothers to shake his head sadly? He got out with this packet, didn't he? If he had a mind to care about mee and thee, I believe it would have manifested itself in the way he dealt with this province and its people. Nothing there...
zalm
13 weeks ago
dorothy
Wasn't Canute Danish?
zalm
13 weeks ago
jimmmmy
I think I'm missing something. Your Dad refused to help your brother... because he thought that he wouldn't pay hims back or thought that he couldn't?
Looking back, I see that at my age, in dealing with me, my dad had twice my brains. Yet another thing to honour him for...
jimmmmy
13 weeks ago
zalm missing
both. as for brains i don't know what the term "brains" means to you. so i offer no comment.
jimmmmy
13 weeks ago
i remember mr. shreck as one
i remember mr. shreck as one of the people who helped irradicate socialists from the ndp turning it into a small c conservative group ala tony blair. [ third way] anyways your article is " useless information supposed to fire my imagination" [mick jagger.] however for those of us whose lives are structured around "business and profits" i'm sure its accurate and informative
igbymac
13 weeks ago
Things are going as scheduled
...and everyone in an uproar is simply in denial of how politics works outside of the rhetoric and dis-information we are incessantly fed.
Nobody is immune from the social and institutional forces that shape our Canadian world-view, including the politicians. A few try desperately to step beyond them, but these are not the folks who pursue politics.
In the end, we have a lot of obedience school graduates on the assembly-line thinking train haunting the offices which administer the state. Offices filled with folks who cannot see a solution for our problems. And why would they see them? They have been brought up in a world where obedience to authority and the unlearned wisdom of yore is paramount for individual success. It just doesn't bring humane behaviour or fulfillment or enlightenment or creativity or compassion along. Nor does it bring a historic narrative which offers far more solutions than what we are willing to expose ourselves to.