Sunday, March 6, 2011

The Wildrose Alternative Budget: Fun With Numbers

Nation, after the release of the Government of Alberta's 2011-2012 Provincial Budget (and the all-day media feeding frenzy that followed), the "next Premier of Alberta" (as introduced by Rob Anderson, AFTER Ed announced his impending retirement, which makes you wonder what Rob knows that we don't) Danielle Smith presented the Wildrose Alliance's "Alternative Budget 2011".

I try to look at these types of documents with as objective an eye as I can - numbers in the millions and billions tend to make my head hurt, as they're so completely unrelatable to my every day life (more on that in an upcoming blog post).

That said, however, after reading the entire document, one phrase kept asserting itself over and over in my mind...  "ARE YOU FREAKING KIDDING ME?!?!"

Okay...  now that I've got that out of the way, let's take a look at the Wildrose Alternative Budget (full document available here).

Increasing spending on health care, education, children’s services, public safety, and seniors and social supports by the rate of inflation plus population growth (which was approximately 2.2% in 2010).

Alright...  now, I've gone on the record time and again as being in favour of spending restraint. We shouldn't waste money. Seriously. If I do it at home, my wife throws things at me. And that's if I waste my OWN money. Government doesn't HAVE its own money - the money that government spends is OUR money - yours and mine. We worked for it. We earned it. And they took it. Or it's a royalty on a resource that we own. But the money's ours, and government shouldn't waste it.

BUT...  the Wildrose often likes to echo the mantra from the Ralph Klein days (which makes sense, as they're adding notable Klein-era Tories all the time, much to the chagrin of some of their original membership) that "government should be run the same way you run your household".  They even refer to that idea a little later in their budget alternative.  So let's play a little game I like to call "inflation plus population growth".

Last year, your household budget for maintenance was $200. You spent $175, because you're awesome. This year, you had no new children, and inflation was - oh, let's say 1%. So, if you use the Wildrose Spending Restraint Rule, you can budget $202 for maintenance. Which you should be able to swing - after all, you're awesome.


That sound you just heard downstairs was your water heater blowing up. A new one costs about $500, uninstalled.

Not a giant deal, you say.  This is an unusual situation, I can whip out the credit card to deal with this...  Oh, no you can't. You can't do that, because we govern our home under the Wildrose Spending Restraint Rule. Turn on the stove and start filling the bathtub with hot water from the pots on the stovetop, because we don't run deficits in THIS home.

The Wildrose points out - in their budget document - that a private member's bill brought forward from their caucus last year would have codified the Wildrose Spending Restraint Rule as law, and it was defeated. It was defeated, of course, because it's a stupid thing to have codified under law. About as stupid as a law outlawing deficit spending. Sometimes, bad things happen. Sometimes, you need to spend money to fix them when those bad things happen. And forcing politicians to "break the law" when those bad things DO happen is wasting our legislators' time in order to score cheap political points and satisfy the egos of the bill's author and sponsors.

Repeatedly throughout the document, the Wildrose Alliance makes reference to what they call horrible over-spending from the PC's "over the last decade". Half of that decade saw their hero Ralph Klein as Premier and half of their current caucus as Cabinet Members, although they go to great pains not to mention those facts. And another of those years saw the budget overseen and presented by one of their newest publicly-lauded party members, Dr. Lyle Oberg, who was Minister of Finance in 2006-07. So, which is it, Wildrose? Did Ralph and Lyle suck, or were they awesome? You can't have it both ways...

There are also communities in the province that need new schools and health facilities immediately. Only the most urgent of these should be undertaken this next year with a commitment to refrain from opening any new facilities without the budget to fully staff them.

An excellent idea. Take the new South Calgary Health Campus, for example: They shouldn't start accepting emergency cases there until all 293 beds at the new hospital are fully staffed. I don't care if you're bleeding from your carotid artery, get to the Rockyview Hospital - tell them Danielle sent you.

This year, the Wildrose Balanced Budget Alternative proposes to increase overall departmental spending for the Departments of Health, Education, Solicitor General, Seniors and Community Supports, and Children and Youth Services to the rate of inflation and population growth, which in 2010 was approximately 2.2% (*Stats Canada and Alberta Finance). All other departmental budgets will be kept relatively unchanged or decreased where recommended by the PCs in Budget 2011.

Okay. I'm not going to go into the "Which hospitals won't you open? Which schools will you close?" line of questioning, because it's already been done. We've got new health centres opening, and they need staff - which costs money. We've got teachers getting a contracted 5% raise - if their district budget increases by 2.2%, the extra money's going to come from...? (DON'T say "selling the CBE's new headquarters" - it'll just make Josh Traptow's head explode when he reads it).

What I AM going to take umbrage with here is the statement "All other departmental budgets will be kept relatively unchanged or decreased where recommended by the PCs in Budget 2011".


We can't trust the PC's to run a lemonade stand...  there's nothing even remotely conservative about them...  they're in need of a "3-step program" to deal with their "spending addiction"...  and yet, where they suggested spending reductions, you're just saying "okay, we're good with that"?

Folks, this is political laziness at its worst. And it's dangerous.

The Provincial Budget was written with hundreds of staff and full access to government financial details, over months of working meetings, deliberations, internal audits, and polishing. They had access to the full weight of the public service in writing it - because it's not the PC Budget for Alberta, it's the Government Budget for Alberta. Wildrose has to use their own people, and their own resources. The entire document is a massive undertaking. No one expects the Wildrose to be able to produce a mirror to that document, taking apart every ministry and department budget expense line-by-line.  But if you're the party that likes to think of itself as the next government - if your members introduce your leader as "the next Premier of Alberta" - you've simply GOT to do better than an 18-page rebuttal document that includes a title page and 8 charts that take up at least half-a-page each. That's 13 pages worth of text. This might be the last Budget to come out before the next General Election. You're proposing we hand you the keys to a nearly $40 Billion economy and our entire social infrastructure, based on 13 pages of text.

The Wildrose Alternative Budget was released the day after the Government presented the actual Budget document. One day after. The sober, reasoned construction of a mature and well-constructed rebuttal to 500 pages of detailed financial information and fiscal policy was released after less than 24 hours. I don't know if you can write a budget rebuttal hopped up on Red Bull or not, but the only other alternative I can see is that the rebuttal was written before the authors saw the original budget, and they just filled in some blanks. But the meat-and-potatoes of that 13 page rebuttal was written before they saw the budget. Which reeks of "politics as usual" - "I haven't read it, but I oppose it". THERE'S the refreshing change Albertans are looking for.

I get it. I really do. In the age of retail politics and Twitter, you've got to get your rebuttal out as soon as possible, while people are still talking about the Budget. Three hours from now Charlie Sheen's going to do another interview, and you'll lose your casual audience. But doing it FAST shouldn't be the focus of a party that wants to form government. Being thoughtful and thorough should be their focus. If you want to win the hearts and minds of Albertans, start by giving them what they deserve. Take a week, and do it right. Albertans don't deserve slick retail politics. That assumes they're fickle and simple-minded. Albertans deserve thoughtful and deliberate planning. They're smart enough to read a document without the pretty coloured charts (that indicate Wildrose proposals in blue and PC Government actions in red or pink - nice touch!), and they're serious enough about their government to read something at least as thick as the local paper. Albertans are smarter than you give them credit for. They don't just want it fast - this isn't drive-thru governance. They want - and deserve - for it to be done RIGHT.

Now, none of this is to say that the document is completely devoid of any redeeming qualities: The title page is nice, and the graphs are appealing (though VERY poorly labelled). And there are even a few good ideas in it, like shrinking the size of cabinet. I think we need a strong public service, but that doesn't mean we need 23, 25, or 29 ministers overseeing it.  And as I said, I favour the principle of eliminating waste, and spending only what MUST be spent, and saving the rest for a rainy day.  I get that from my parents, who in turn were raised by people who grew up in the Great Depression.

But this document reads, to me, like a badly constructed joke more than a serious proposal from a party that hopes to form government.

I'm not going to tell you what you should think - read the document for yourself. Come to your own conclusions.

But I *am* telling you what *I* think.

I think... "Are you freaking KIDDING me?"


Brock Harrison said...

Thanks for this, Joey. Always nice to get into issues.

But I don't think your critique is very substantive. Your example of a calamitous event prompting over-budget spending doesn't jive with your government's spending problem. Spending needs to be targeted and prioritized, especially during lean years, not ramped up and scattered indiscriminately. That is the point of the Wildrose spending cap. Governments flushed with other people's money (as you correctly identified) need some constraints to keep spending reasonable and maintain trust with taxpayers.

As for releasing our Balanced Budget Alternative the next day, it was important to show Albertans that this thing really could be balanced. Obviously, nobody is going to confuse it for the government's behemoth document, but that wasn't really the point. The point was to show how things can be done better, how fiscal restraint can work, and I think we showed that.

Nobody is saying fiscal restraint is easy. Your post, and the overall tone of reaction from the Finance Minister and other Tories, is to be expected. Nobody wants to make difficult decisions. That doesn't change the fact that difficult decisions have to be made. (There is some low-hanging fruit like the $275M for MLA offices, but even that you guys refuse to touch.) Otherwise, you'll always find a reason to keep spending money and growing the govenment, at the public's expense. And really, that's where we are with you guys today.

Enlightened Savage said...

Brock: Thanks for your response. My heart leaps at the prospect of a substantive discussion. :) If you’re feeling froggy today, jump on down and offer some thoughts on the qOtd posts below this one.

“Spending needs to be targeted and prioritized, especially during lean years, not ramped up and scattered indiscriminately.”

I couldn’t possibly agree more.

The problem is, we came out of the (necessary) cuts of the 90’s with a pretty significant infrastructure and social deficit. You have to be careful not to run a deficit to spend on social programs, because it’s completely unsustainable and will come back to bite you. You have to try and commit to spend as little as is feasible, because as the old song goes “rain is gunna come”. Resource revenues, ideally, should never be spent on recurring social programs – that’s how we develop dependence on money that will disappear one day. It’s like paying your mortgage with your poker winnings: One day, you’re going to stop winning and the bills will keep coming. But spending money on necessary capital infrastructure when costs are low, Albertans are out of work, and (most importantly!) you’ve got the money in the bank is the BEST time to do it, in my opinion.

I support the principle of a cap on spending increases. Just as I support the principle of reducing the size of cabinet – both ideas championed by the Wildrose. What I DON’T support is the idea of codifying those principles as law. We should TRY to avoid unnecessary spending increases not because the law says to do so, but because it’s the right and smart thing to do. When it’s not possible, for whatever reason, to follow that principle, we shouldn’t force our leaders to break the law in letter or in spirit to deal with an emergent and unforeseen situation – consider the federal Conservatives and their “sorta-but-not-really-fixed-election-dates” law.

I believe strongly in blood donation. But should the government pass a law requiring donation simply because it’s something I believe in? What if I haven’t eaten today? If I can’t donate because I’ve got a cold, am I breaking the law?

Unnecessary laws are almost as bad as unnecessary spending – they waste the time of our legislators, our courts, our enforcement agencies – the only people who benefit from unnecessary laws are the lawyers, and the special interests that lobbied for the law in the first place.

Taxpayers already have the most fundamental recourse in dealing with politicians whom they feel have betrayed their trust: They can kick them to the curb when the next election comes along. No new law required. Consider: We don’t stay faithful to our spouse or partner because the law says we *must*. We stay faithful because if we don’t, they’ll kick us to the curb. As they should.


Enlightened Savage said...

(continued from above)

"The point was to show how things can be done better, how fiscal restraint can work, and I think we showed that."

I think sometimes people try to over-simplify complex situations, to make them easier to digest. I know I do it all the time. The budget document the Wildrose released relied almost entirely on spending caps and cancelling previously targeted expenses to balance the budget. But Albertans deserve to have this conversation with those who lead them - and those who WANT to lead them - from an informed place. Let's talk about HOW to make the numbers work. And not the party-line "the Wildrose is going to close hospitals" claptrap - that's simply hogwash. If you're going to increase spending in Health by 2.2% instead of 6% (might be wrong on the numbers, not looking at the GOA budget right now), what will that look like? What will be effected? Will that be purely trimming the fat, or would there be facility closures or staff layoffs? What effect would the Wildrose proposal to move back to regional health boards have on operating costs, as each region would likely (as before) spend millions of taxpayer dollars to hire professional "government relations" consultants to go to Edmonton and lobby for more taxpayer dollars?

If we're going to have a REAL discussion, then let's have it. And that starts with asking "HOW will you make that work?"

"Nobody is saying fiscal restraint is easy."


"Your post, and the overall tone of reaction from the Finance Minister and other Tories, is to be expected. Nobody wants to make difficult decisions."

The Finance Minister is defending the budget he presented. That's part of his job. I haven't done anything of the sort - and when I DO analyze the budget, I can tell you right now there are sections I have issues with. Likely, a lot of the same ones you do.

I'll tell you this, though: I *DO* want to make difficult decisions. I want to do it not because I'll enjoy it, but because it needs to be done for the sake of my niece and nephew and my own future kids. I owe it to them to help make these difficult decisions. But just because a decision is difficult, or takes a long time, doesn't necessarily validate it as the RIGHT decision, either. Telling the kids they can't have new winter jackets is tough. But when winter comes, as it does every year, sometimes you realize that decision was the wrong one, made for what you thought was a good reason at the time.

"There is some low-hanging fruit like the $275M for MLA offices, but even that you guys refuse to touch."

I don't know how much it costs to run 83 (soon to be 87) MLA offices, but if it can be done for less, it should. And I don't know who "you guys" are - I'm not an MLA. I don't work for the PC Party, or the Ministry of Finance. If any of those roles are in my future, though, and that number CAN be reduced, I'll say right now, on the record, that it should be. That clear enough? :)

"Otherwise, you'll always find a reason to keep spending money and growing the govenment, at the public's expense."

I'll end off with this statement of principle. I didn't come up with it, and can't recall who did originally, but I've loved it ever since I first heard it, and believe it with my whole being:

You get what you pay for, but our financial resources are not limitless. What government MUST do, it should do well - but without wasteful spending. We deserve the best government services that we can afford. No more, and no less.

Josh said...

Thanks for the mention Joey! It's amazing that the CBE didn't see this coming! Teachers will be laid off or positions that are open will not be filled, once again they will have to run a defect and dip into there saving again this year.

Chris said...

I don't think "spending restraint is hard" and "extroidinary circumstances" are a particularly good defense to the government's current fiscal position. There is really no reason to believe that in the short to medium term that money is going to rain down on Alberta like mana from heaven. Natural gas prices are down and they aren't coming back up anytime soon. Nor is the Middle East likely to remain anarchic indefinately.

Beyond the immediate deficit the problem of the aging population hangs like the Sword of Damocles over the province. The population is aging, health costs are expected to rise as the population becomes older and thus less healthy. Senior care outside of direct health costs will require more money, and all of these people will be paying less money in taxes.

Not only are the PCs massively unready to address that looming crisis but they've put us in a position where we're already in the hole, when the only reasonable expectation is that they things left aloen are going to get worse.

Mean Gene does not have a plan to get health care costs under control. Believe me I asked, and promptly resigned from a pc board after the answer was "umm hopefully we'll get some more prevention". Barring some sort of miracle drug that doesn't sound bloody likely to solve our current population based time bomb.

We've already squandered a large amount of the oil resources in thi province and we've saved next to none of that for the future. The seventeen billion sacked away in the rainy day fund should have been in the heritage fund to begin with.

If the choices are hard now, they aren't going to get easier and Tory Torpor isn't going to fix this province so by that measure a title page, some badly labelled graphs and a single page reading "Stop spending so much damn money" is a decided improvement.

joannis said...

The Middle East is not going to remain anarchic? Bwahahahaha, that's a good one, Bwahahaha!!
Have you studied the countries of the Middle East lately? I mean, I would have laughed before Tunisia exploded, but after.....Bwahahahaha!!

OK, let's look at them. Tunisia, Egypt, Iran, Iraq, Syria, Jordan, Lebanon, Libya, Afghanistan, Pakistan, Yeman, Bahrain, Saudi Arabia... Bwahahahahahaha!!

And if you've noticed (obviously not), Iran is trying to get THE BOMB. How about the wisest policy is to make sure they DON"T get one? And if they do get one, there will be PROLIFERATION with the Saudis and other Sunnis trying to get one too.

Bahrain, Yeman, Pakistan - all on the edge. Egypt massacring Christians. On the edge.

ANARCHIC? We're talking freaking APOCALYPTIC - and the first to know it ARE Oil executive veterans who've been there.

We have never experienced becoming the single most importance source of Oil in the world, but its comng to that - which is why NORWAY is investing against their liberal principles, in the OILSANDS!

The WRA will be talking slashing while everything in the province will be expanding - and that is a worse than KLEIN disaster! When everything expands, you build - to contain the over-heating, as Lougheed said in his interview on TV, that Alberta OVERHEATED...

These rednecks who joined the WRA, are going to find out, thank God, and not to far distant, that the world is bigger than Alberta and that Alberta is bigger AND BETTER than a bunch of washed up rednecks who can't think their way out of a paper bag. The vote will split if anything - and the WRA won't benefit - but the certainty of a more minority government for Alison Redford and a larger Alberta Party in the legislature. The WRA will just look stupid, while the world tries to cope with uncertain oil access and our province enjoys the fact - and danger - of being the largest and SAFEST supply of THE ESSENTIAL world resource!