Provincial Budget (March, 2013)

[SignalHillHiker]

So, the new provincial budget has been announced. The government now suspects our deficit will be $1 billion less than they announced previously (I suspected that was a union contract negotiation ploy, releasing such terrifying numbers). That said, we're still slashing 1,200 positions.

I'm deeply curious what you all think, especially if you agree with these measures.

I'm under the impression that such austerity measures always fail, usually spectacularly, and often turn a recession into a depression. That said, our economy is booming... this problem is limited to government's inability to balance its books.

I think high-paying public sector jobs are a major component of any healthy economic engine. We see what happens when the lower and middle classes are gutted for the benefit of the rich in the United States. I don't want that to continue happening here.

The idea that wealth trickles down is offensive at face value and also, it seems, incorrect. The wealthy hoard their money. The poor spend it. The more money the lower and middle classes have, the more money that changes hands, and the healthier our economy.

So I think a strong public sector benefits us all.

But, then, where do we balance the books?

What do you all think?

[Trevor3]

I think I may run a strike pool. $20 buys in and person closest to the correct length of the strike, without going over, takes the pot...

In all seriousness, I haven't had a chance to look at any details yet, just what was reported by CBC. Looks like we're down to 2 school boards in the province, 1 english and 1 french. That is not going to work, we used to have 2 school boards in Bay St. George. 2 for the whole province? That's just foolish.

I'd still like to know why they anticipated a $124 barrel of oil in the last budget. Pure stupidity. Common sense should tell you it's better to be conservative on that sort of thing, and you'd think the conservatives of all people would understand that. At least this time they picked a price that oil has actually reached in the past.

[Copes]

I haven't looked at the numbers. I've only read the CBC article. Take my thoughts for what you will.

I tend to prefer smaller government. I have no problem with cuts when I hear that employee costs are over half of what the provincial budget goes towards.

I prefer government to be run like a smart corporation: only employing the people that it needs to operate.

It remains to be seen whether these cuts are good. It remains to be seen whether the right people were cut, whether the right number of people were cut, or whether the cuts will cut back as hoped.

But initially, no, I have no issues with the cuts if we are operating beyond our means.

EDIT: I worry about the education cuts.

[BigRedSpecial]

All I have to say on the topic, is that I can't think of a single example where austerity had the desired effect. However, with our economy, I'm not sure how severe the effect will be. Also, keep in mind that Provincial Government employees are far from "high paying jobs". Even Federal employees aren't up to private industry standards.

Another thing I want to comment on from your post, is that "trickle Down Economics" is the most successful lie ever sold to the masses. How anyone can believe in such idiocy, let alone so vehemently, is beyond my comprehension. The most basic theory of business is that you expand when you have the demand/need to, NEVER just because you can afford to. So, that money gets hoarded. You don't reduce your prices because you can afford to either. Henry Ford tried that. His shareholders sued him for it.

[SignalHillHiker]

It'd be cool to see what government could be like if that were ever successfully implemented, Copes - just having the employees it needs to run.

Belgium went without a government longer than any other country on earth and politicians only started making serious efforts to form one when the people started to realize... hey, nothing's changed? Why do we need government?

*****

You're right about public jobs not being so high-paying, BigRedSpecial.

[Copes]

I also tend to be a fan of non-essential services (and to be clear, I consider health care to be essential) being privatized. The liquor corp. for example. Why is the government wasting time and money running this? I would much rather it be run privately, while government provides the framework (laws) for it to operate.

We'd probably have cheaper booze and more selection.

[Trevor3]

Originally Posted by Copes

I also tend to be a fan of non-essential services (and to be clear, I consider health care to be essential) being privatized. The liquor corp. for example. Why is the government wasting time and money running this? I would much rather it be run privately, while government provides the framework (laws) for it to operate.

We'd probably have cheaper booze and more selection.

NLC is a public/private partnership, much like Nalcor. It's really one of the government's biggest guaranteed source of revenue each year, so they're not wasting money. They're actually making a huge return on their investments.

Edit: included the italicised words.

[SignalHillHiker]

Originally Posted by Copes

I also tend to be a fan of non-essential services (and to be clear, I consider health care to be essential) being privatized. The liquor corp. for example. Why is the government wasting time and money running this? I would much rather it be run privately, while government provides the framework (laws) for it to operate.

We'd probably have cheaper booze and more selection.

I disagree. I much prefer having a strong foundation of public companies.

In my experience, they offer two key benefits:

1. They keep prices low because, generally, they are prohibited from making a significant profit.

2. They re-invest their profit in areas of public good or even literally split it up among residents of the relevant political jurisdiction.

In Manitoba, for example, there were two beloved public companies: MTS (phone service) and MPI (auto insurance).

The former was privatized, rates went through the roof, service fell through the floor. People there still grumble about it having happened every time it comes up.

MPI stayed public. Manitoba still enjoys among the lowest auto insurance rates in the country and, when I lived there, I even got a cheque back once year that MPI brought in too much money.

There are problems, of course... but the idea that private ownership makes public companies more affordable and efficient is wrong. Privatizing industries almost always leads to increased costs for consumers and the consolidation of those profits in the hands of an ever-shrinking number of big wigs.

People seem to mistakenly believe that privatization leads to competition (which is what actually makes this more affordable and efficient). This is almost never the case. Private interests make sure they buy, for all intents and purposes, the public monopoly. Only token competition is ever allowed.

[Copes]

I have a friend who worked a brief stint in the NLC. He said that some of the employees he saw were embarrassingly inept. He also felt they were majorly overstaffed given the work that needed to be done.

I myself worked briefly in a government department on a work-term. I too felt that there were a number of people there who didn't seem to have a role. They sort of just floated around not doing much.

You're right though. You provided a concrete example of where it works, and I really only have testimony to draw on. My conclusions are largely drawn from stories and discussions I've had with people describing government inefficiency. This leaves me questioning the employees my tax dollars are spent on, and more so, whether or not five private companies competing could provide better service than one public company with a monopoly.

I guess what I'm trying to say is that I tend to put a lot of faith into capitalism, and I also am not surprised that there are over 1000 public jobs the government feels they can continue to operate without.

[SignalHillHiker]

Hey all - I decided to create a new thread. It seems this discussion could have legs and I don't want to hijack Jeddy's thread for all economic issues.

[SignalHillHiker]

Oh, my views are mostly not based on direct, personal experience as well.

I wonder what the 1,200 positions are. (BTW, if anyone who lost their job is reading this, I'm sure I can speak for all of us in offering our condolences. We're not talking about you individually and no insult is meant). I think it's possible to cut a lot as well. I'm just curious which ones...

What percentage of public employees is this?

[Copes]

Originally Posted by SignalHillHiker

(BTW, if anyone who lost their job is reading this, I'm sure I can speak for all of us in offering our condolences. We're not talking about you individually and no insult is meant).

I want to echo this. My harshness on the public sector is not a result of the employees. I tend to blame politicians. I feel that the public sector's main problem is that it over-compensates. A new need is determined, the government hires a platoon of qualified individuals to address it to appease voters. Then, once things die-down, we suddenly have employees who may have had diminished roles. This results in people not really knowing what they should be doing, or a manager trying to divide up work that could be done by four people among ten. In some cases, people take advantage of this (I have a friend who falls into this category), thinking that its great that he can spend "a month to update a spreadsheet with no repercussions." (His words, not mine).

I wish that instead of hiring boatloads of individuals, government was more apt to shuffle people between departments. I also wish the government had an easier time firing employees. When a bad apple does exist, I have the feeling its easier to just hire someone to help with the workload then it is to let go of someone and deal with the union. Once again, resulting in a bloated public service.

Morale of the story, it sucks if anyone was laid off. While I feel that layoffs were probably due, I feel for your particular situation, and blame the hiring practices of the government for your misfortune.

Getting back on topic, it seems like there were quite a few cuts in regards to the administration of education in the province. This is not something I feel very good about, initially.

[PoscStudent]

Originally Posted by SignalHillHiker

Oh, my views are mostly not based on direct, personal experience as well.

I wonder what the 1,200 positions are. (BTW, if anyone who lost their job is reading this, I'm sure I can speak for all of us in offering our condolences. We're not talking about you individually and no insult is meant). I think it's possible to cut a lot as well. I'm just curious which ones...

What percentage of public employees is this?

I believe 4.5% of the workforce.

It seems like there are a lot of managers going, I've heard many complain about the number of middle managers in government. As well in a news release by the premier announcing that she would be taking over the Department of Intergovernmental Affairs, she said that 11 jobs were gone from those who were either Deputy Ministers, Assistant Deputy Ministers and Directors.

[SignalHillHiker]

I don't know...

In my corporate experience, there are arguments in favour of cutting out middle management first. Keep the serfs that actually do the work, and keep the leaders who really make the big decisions, and get rid of the middle man that keeps things running smoothly between them.

But when I think about my team... there's no clear place for a cut.

If they get rid of me, they save one of the smaller salaries. It's certainly not enough to cover the cost of outsourcing my work. I might write a whitepaper every week for my salary. That'd be $1,800/week to outsource, which is more than I make.

If they get rid of my direct boss, they get rid of the only management level that spends most of its time working as opposed to in meetings.

If they get rid of our mutual boss, we lose our connection to the Canadian and global leadership.

The leaders positions are merit-based. You suck, you're out. They can't lay off someone for financial reasons at that level and not suffer a significant consequence for future hiring, etc.

So who do you get rid of? The customer reps that answer the phones? Well, they're the reason our calls are answered X% faster than the competition and we get to say we have the best customer service.

I just couldn't find someone on our team to get rid of.

I imagine it'd be similar in government... but I do agree you see people lurking there more often than in private enterprise.

[Trevor3]

The Dept. of Municipal affairs will soon have a new system for funding/grants, which will apparently result in increased spending. That will be interesting. And the 11 largest municipalities will be removed from that sytem. Instead they will draw from a $25 million capital fund, for infrastructure improvment mainly.

I'm most interested to see how that works. Since I live in municipality #12 (thanks to Portugal Cove-St. Phillips leapfrogging us in the last census), we'll be unaffected, but nonetheless, it's an interesting little tidbit.

[PoscStudent]

I thought it was a good budget. I think there was room to find some more savings but that will probably come over the next few years.

[jeddy1989]

I have to be honest, I'd feel much more comfortable hearing it from Danny's mouth

[PoscStudent]

Originally Posted by jeddy1989

I have to be honest, I'd feel much more comfortable hearing it from Danny's mouth

Sadly we heard to much good come from Danny's mouth and it left us in a mess.

[Copes]

Another bad decision in the budget, IMO:

Award-winning N.L. tourism campaign hit by $4M cut
Ad production could halt or fewer spots may air after marketing budget chopped 30%

Production of new ads for Newfoundland and Labrador's award-winning tourism campaign could halt, or the number on the air could dwindle, after Tuesday's provincial budget.

Tourism Minister Terry French says his department will now look at the potential impacts of the $4-million reduction, which amounts to 30 per cent of the province’s tourism marketing budget.

“We’re very fortunate in that we have a great marketing team here in government, we have a great agency of record who have been able to punch above their weight for quite some time,” French told CBC News.

...

The cuts won’t impact the months leading up to the 2013 summer season. Those spots were booked and paid for as part of last year’s marketing budget, according to the minister.

http://www.cbc.ca/news/canada/newfou...-cuts-327.html

[rwspencer38]

I found the budget to be terrible in my honest opinion. I agree with some of the public sector layoffs but the extent is really far reaching. The province is a huge employer in my field and I know for a fact that they have 4-6 empty positions related to what I do that will likely be cut. The sad thing is that they actually need those employees but because they are on slash and burn rampage, those positions are likely out the door. When people hear about the 1200+ layoffs, they tend to automatically think that its 1200 paper pushers that really contribute little to governement processess. In reality, there are many positions that are extremely valuable that will ultimately be cut because department ministers think the job can be done by one instead of 2 or 3, but that is not always the case.

The other major dissappointment is the merger of the education boards. I will say that I will need to see the details of the merger but with my significant other being a new teacher, this will surely mean hard times ahead for her. For those not familar with how the boards are structured, if you want to teach in the eastern school district your best bet is to punch your time in that district. The boards hire based on work experience WITHIN the district, meaning teachers outside the eastern region are below those who punched their time in the region. With the merger of the boards, my significant other will not be bumped to the back of the entire province structure, despite actively subbing for almost two years. It really is a shame that new teachers have a hard time finding work and its only getting tougher with the new budget.

**EDIT**

Also... How did the magically manage to find 1 billion dollars in less than 7 days before the budget? Does anyone not find that strange?? Projected deficit was 1.6 billion a week prior to budget release with an estimated public sector layoff of about 500. Yet on budget day, the deficit is much lower at about 500-600 million yet the layoff is 1200+. Considering the budget books were propably in product a week or two leading up to yesterday; are they saying they had no idea that the deficit would be 1 billion less than they though just 7 days prior? Come on..