It not exactly the kind of decision-making that instills confidence. The Dunderdale gang appears to have miscalculated, in developing a plan for spending based on the speculation that oil would remain at $124 per barrel through 2012-13.
Just over two months after the provincial budget for 2012-13 was read into the record of the House of Assembly, oil is trading at $103 per barrel (as of Monday, July 22).
In his budget speech in April, finance minister Tom Marshall said the government was beginning a 10-year plan to control its spending.
One of the first things Dunderdale did, on being elected premier, was to reduce the size of the cabinet, from 18 to 16.
We don’t yet have an accounting of how that translated into savings, but if past experience is anything to go by, a significant amount of time usually transpires between government’s saying it and then doing it.
We don’t expect the savings from the elimination of three cabinet ministers has put money in our back pockets overnight.
Only complete eliminations of government funded agencies and programs bring faster results.
We are convinced there is still much that can be done — if someone can find a way to get down to the nitty gritty of daily government operations — to eliminate waste and save government, and taxpayers, a bundle of money.
However, until someone comes up with an easy way to account for every rubber band and paper clip used in a government office, financial planning has to be carried out from broader perspectives; starting from the perspective of how much money you have to spend.
Being truly conservative (the character trait, not the political party), one might assume the betting game on revenues would factor into it global economic events that might impact your Gross Domestic Product.
With oil being the province’s most important Gross Domestic Product at the moment, and economies around the world in recession, retraction and near bankruptcy, a cautionary approach would have been to reduce the bet on the price of oil and build a budget based on a dollar value much lower than the going rate leading up to the budget.
Not only would it have been a smart fiscal move, but a keen political one as well.
Much better, don’t you think Ms. Dunderdale, to have a mid-year financial report that shows revenues in line with, or even higher than, the budget projections? Such reports instill confidence in the electorate. Missing the mark on revenue projections makes everyone nervous and wondering about the leadership and management of the current government.
And we don’t have to tell you about the math that comes into play then, do we?