Monday, January 30, 2012

It Was the Best of Times...Or Was It?

Source: CTV News Regina: Wall Warns of Austerity, Prudence in Upcoming Budget

While there is a lot to talk about federally, especially considering the OAS and pension argument that Harper seems to be provoking; I'm going to focus solely on the province in this posting.

Brad Wall took the opportunity today to address the  SUMA (Saskatchewan Urban Municipalities Association) conference to talk about what Saskatchewan can expect in the upcoming provincial budget. Wall did his usual song and dance routine, informing the delegates gathered that the budget would be one that would see spending and program reductions...But tried to stress that there would be no cuts.

Surprisingly, Wall admitted that low corporate income tax and potash revenues would have a negative effect on the province's bottom line.

Wait...A Conservative said what?!

These were two issues that the NDP talked a lot about during the last election, and they were also issues that the Saskatchewan Party dismissed. Wall ridiculed demands to increase potash royalty rates and flat out refused to consider raising corporate income tax rates...But now, Wall is admitting that these low rates are having a negative impact on the province's coffers.

The only non-surprising aspect of this is that Wall is announcing program and spending 'reductions', trying very hard not to mention the words 'cuts', as a means of improving the bottom line...Instead of, you know, raising these low rates.

So, Wall can identify a problem...But he refuses to address the problem directly, and instead will rely on other sources of making up this lack of income from a different area. So, the people of Saskatchewan will see reductions in services so corporations can continue to have a lower tax rate.

The real problem, however, is the fact that this message runs directly counter to the one Wall and his party presented in the election. Wall and team always talked about the strong economy and how Saskatchewan was booming...Yet, if this were the case, why would we need to be talking about 'reductions' at all?

I suggest a different tact: The economy has stopped 'booming' because Wall and company no longer have record Crown Corporation profits to plunder...Or a large rainy-day fund to make up the difference either. And to avoid that D-word that every Saskatchewanian has learned to fear (deficit, in case you were wondering) Wall is pro-actively making reductions to avoid this fate later on.

His party has plundered what they can from the public coffers to keep the budget 'balanced' and now they have no choice but to start making cuts if they want to keep their illusion of sound financial management.

The fact of the matter is that we were told one thing by his party during the election, and now they are doing something that completely negates their message. Saskatchewan is clearly not on sound economic footing if cuts are the first option to balance the books.

And hopefully, this is one of those things people will remember come the next election cycle.

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