Wow, finally a blog post. I’ll get around to posting my thoughts on the overall campaign soon, but to tide you over, here is an article from Bruce Owen from today’s freep, and my reply:
Winnipeg Free Press – ONLINE EDITION
The Tories, Crowns and taxes
By: Bruce Owen
Posted: 09/12/2011 1:09 PM | Comments: 0 (including replies)g
This is a tough one to get your head around.
It’s an even tougher one for the Tories to sell to voters in a few sound bites.
On the one side, you have Hugh McFadyen’s Progressive Conservatives accusing the NDP of playing a shell game with the province’s finances and the other you have Auditor General Carol Bellringer saying otherwise.
McFadyen says the books are in such bad shape, the NDP have no alternative but to raise taxes to raise more revenue if they want to balance the budget by 2014.
McFadyen says if he becomes premier, his Tories won’t be able to balance the budget until 2018. Those four extra years will avoid a tax increase by reducing spending.
The NDP refute this, saying they are ahead of track on balancing the books, mostly because of Manitoba’s healthy economy.
Last week, I spent 20 minutes on the phone with Eric Stefanson, former finance minister under Gary Filmon’s Tory government in the 1990s.
He explained, patiently, why this is such an important issue for the Tories and should be for Manitobans.
The PCs also supplied the paperwork to support this, and Stefanson guided me through it.
The difference has to do with what’s called the core budget—the taxpayer-supported budget that deals with direct government services like healthcare, justice and education—and the summary budget, the budget that includes everything else under the government umbrella, like school divisions, universities and Crown corporations.
The smoking gun for the Tories is on page 4, Details and Reconciliation to Core Government Results. The blood on the floor is money moved from Manitoba Hydro ($150 million) and the Workers Compensation Board ($64.1 million) into the summary budget.
According to Stefanson, those combined payments ($191.8 million) went to improve the province’s bottom line and reduce the summary deficit, which sits at about $298 million.
“They really are not part of the core government,” Stefanson said of the Crowns. “They really are funded by ratepayers.”
Without that $191.8 million, the deficit is actually almost $490 million, Stefanson said.
Stefanson’s second point was on another page, Loans and Advances. In particular, loans and advances to Crown organizations and enterprises like Manitoba’s post secondary institutions.
The money, roughly $400 million, will only be repaid to government through future appropriations, according a note at the bottom of page 114 of the Summary Financial Statements.
“What should be really important, I think, to Manitobans is this distinction,” Stefanson said. “These advances, by and large, can only be funded in one way, because we’re running deficits, they’re being funded by debt. “I think what gets lost sight of, which is really the most important issue, is what’s the impact to the taxpayers of Manitoba. What’s happening to the real deficit? What’s happening to debt in Manitoba?
“You look at the gap that has to be closed, it can’t be done without increasing taxes.”
Then there’s the impact of the flood fight on the books plus the future of federal equalization payments to Manitoba. Then there’s the economy, and how much of it is actually driven by public sector spending, he said.
“That can’t go on forever. You can’t keep mounting debt indefinitely without repaying it. Nobody can. No government can
Stefanson is right on. Although the NDP will tell you different, they are playing a shell game. Would you say your annual household budget is balanced if you are $50K in debt, but have $50K in RRSPs? Of course not, but that’s what the NDP is doing.
One other very important point – when the conservatives were in power and introduced balanced budget legislation they were applying this balanced budget legislation to the operating fund. Since the NDP has come in, they have moved to consolidated reporting. This form of reporting was recommended by the AG, which is fine; however, the NDP has used this form of reporting to apply the balanced budget legislation not to the operating fund but to the bottom line of the summary reporting.
What does this mean? While the conservatives were in compliance with the intent of the balanced budget legislation, the NDP has used surpluses from MPI and Hydro to allow them to run deficits in the operating fund and still claim they are in compliance with the balanced budget legislation, which IMHO is an outright lie.
Why haven’t the conservatives pushed hard on this? Why hasn’t the media dug into this? Why has your colleague Dan Lett become an NDP mouthpiece in his last column and forced you to explain it properly Mr. Owen?
Why does the media ( Free Press) refuse to do proper investigative journalism and provide proper information to Manitobans about NDP government actions?
Why has it not been reported that the real reason the NDP did not refund $60 Million in illegal photo radar tickets wasn’t because people pled guilty as then Minister Chomiak said, but because it would have caused them to be out of compliance with balanced budget legislation. Why wasn’t that question asked?
Why has it not been reported that the NDP grant to the U of W for the science complex ($25 M) had to be turned into a long-term loan as it would have caused them to be offside with respect to balanced budget legislation ( wouldn’t have anything to do with the fact the owner of your paper is the U of W’s chancellor, would it?)
The NDP is conducting a campaign of misinformation and lies and several Free Press reporters are complicit in it.