DAVIS, BALL AND McCURDY: PRISONERS OF THEIR OWN DECEPTION

Premier
Davis has belatedly taken aim at Liberal Leader Dwight Ball suggesting his
spending plans, and his approach to finding savings, are a fantasy. 

This kind
of speak is tantamount to one drunken sailor accusing another drunken sailor of not being
drunk enough.

Davis doesn’t credit Dwight
Ball with having adopted the “Wiseman Plan”.

That’s the
approach to Budget making devised by his Tory Finance Minister Ross Wiseman. It is
based less upon economic fundamentals than upon “hope”.

Hope is
important to be sure, but it does not influence the direction of oil prices. Nor
is hope something against which we can underwrite health care services or education.
Hope is not a “bankable” commodity. It would be like applying Tina
Olivero’s approach to the Budget: it’s mostly attitude. The rest is in the water.


Think about
it. We have doubled the provincial debt in just a few years. This year’s Budget contained the fourth consecutive deficit. The “Wiseman
Plan” contained a Budget based upon:

         
$1.1
billion deficit on current account (government operations and programs).
         
Another
$1.144 billion for capital account- including infrastructure, fire trucks, and   $760
million for Nalcor, “…primarily for the Muskrat Falls Project”.

That’s $2.24 billion to
which must be added the second demand of $800 
million for 
Muskrat Falls, made
by Nalcor in June.

The Government is adding around $3 billion to
the public debt, this year alone. Yet, that fact gets honorable mention not by one
of the political leaders.

Wiseman predicts five more years of deficit spending
after this Budget, following which he says, oil prices will rebound.

The problem is Wiseman has not a clue about next
month’s revenues, let alone Budgets five years’ out!

         
In
place of $USD $62/barrel, oil prices (Brent) are now scratching $US 40/barrel.
         
Oil
production is lower than forecast.
         
Mineral
royalties are lower, too.  

The $1.1
current account deficit forecast this year is actually far higher than forecast.  


No Fall
Budget Update has been issued by the Davis Government.

Anyone can
figure out, given Davis’ desperate Polls, if Wiseman had good news, he would be
shouting it from the roof tops.

Instead,
all three leaders are making promises; Ball is just making more than the
others.
Davis is not credible. But he is not
credible, either.

Ball
proposes a deficit $270 million higher than this year’s. He doesn’t even know
what the deficit will be! He is foregoing $175 million by cancelling the HST
increase.  $380 million is sought from
cutting government waste but without causing lay-offs. 



It is the folly of the willfully blind. 


Salary and benefits for public employees reached
47% of total government expenses in 2013 (this and other stats were skillfully described
in JM’s Budget Colloquy posted on this Blog).The figure is proof there are no savings without  job cuts, though that fact should not halt any leader providing essential financial leadership.

To that point, we have also come through the entire election campaign without a serious acknowledgement
Muskrat Falls has placed the province in a dreadful financial state. 



In time,
we will wonder how it happened that all three parties could all be simultaneously sleep-walking.  

But, others
facts are equally compelling:

•          For every one NEW dollar spent on
infrastructure, three NEW dollars have been spent on public sector salaries and
benefits.

•          Per capita expenses in Newfoundland
and Labrador are approximately 45% higher than the average of all other
provinces and are the highest of all the provinces in Canada.

•          The Auditor-General reports the
cumulative value of surpluses recorded by the Province from 2004-05 to 2013-14,
of $4.6 billion, was almost entirely the result of payments received under the
Atlantic Accord arrangements….so much for diversification!  

•          The demographic bomb is real. By 2026
33% of the population will be 60 years of age or older, while 15% of the
population will be under 15 years of age.

These are
but a few of the scary statistics that profoundly threaten this small,
increasingly revenue starved, and profligate province.

The simple
fact is the “Wiseman Plan” is not sustainable. Dwight Ball’s adoption of the Plan makes it no more acceptable than Davis’ own endorsement..

Davis charges
Ball with engaging in fantasy. The truth is, having abandoned Tina Olivero only recently, he had long ago embraced “Alice in Wonderland”.. 

A more
astute Premier Davis would have exposed the profligacy of Danny, Dunderdale,
and Marshall.  

Having done so, Davis might have been able to credibly explain why Ball is being foolish.

Indeed, as the incoming Premier, Ball should be able to have an honest conversation with the very public to
whom he has promised transparency and accountability.



But even he could not risk it.

Likely, such frankness would cause too many questions; inspire too much doubt. The public might demand
the clarity he does not possess. It might alter the false economic narrative on
which his campaign is based.

The tragedy
of our politics is that all three political leaders are prisoners of a deception. It is one each of them has helped create.

But, there
is hope, after all; not Tina Olivero’s brand of hope, not Alice in Wonderland’s
or even the false hope on which the “Wiseman Plan” is based.

On Monday,
the public will vote.

In four
years, they will vote again.

Ball needs
to remember the voters won’t be happy if he leads them down a rabbit hole.



Don’t take that to the bank, either!
Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.

NALCOR (Masquerading as ‘Hydro’)LIVES IN AN UPSIDE DOWN WORLD

If a Big Mac costs McDonalds $10 to produce and it is sold for $1.50, McDonalds will go out of business. They would not declare a profit!

REMEMBERING BILL MARSHALL

Bill left public life shortly after the signing of the Atlantic Accord and became a member of the Court of Appeal until his retirement in 2003. During his time on the court he was involved in a number of successful appeals which overturned wrongful convictions, for which he was recognized by Innocence Canada. Bill had a special place in his heart for the underdog.

Churchill Falls Explainer (Coles Notes version)

If CFLCo is required to maximize its profit, then CFLCo should sell its electricity to the highest bidder(s) on the most advantageous terms available.

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