Looking Ahead

Looking Ahead

By: Ryan Young

Welcome to 2017, my dear constant readers. As you may have noticed, The Rogue Bayman has been a quiet space for the past couple of weeks. I apologize to my readers who may have been expecting some commentary to digest over the holidays, or some response to the big items that are currently dominating the headlines such as snow clearing and gas prices. I had intended to be more active over Christmas, but after finding my way back home to Bonne Bay on Christmas Eve, I decided to take a step back from writing and commentary to reflect on the year that just passed, and the new one that just began.

The previous year was certainly an eventful one. I don’t think anybody could have predicted the turmoil that resulted from a change in government from the Tories to the Liberals. We all knew that times were tough in the provincial treasury, but when the new Liberal Government brought down their first budget last April, it quickly became apparent that the “Stronger Tomorrow” they had campaigned on was not actually what they intended to deliver. I had contemplated doing a “Best of 2016” style post, but there have been plenty of those to go around, and to be honest, I don’t really have the stomach to go back through it all. Instead, I have decided to do a list of stories to watch for 2017 that I hope you will enjoy.

1. Grieg NL

The proposed aquaculture development by Grieg NL on the south coast was a major story in 2016, and it will likely become an even bigger story in 2017 as the project begins to move forward. The decision by Perry Trimper to excuse Grieg NL from a full environmental assessment has raised many questions about the project and many people are worried about what the negative effects of the development might be. On the other side of the coin, we desperately need the employment that the project will provide for the province, especially with unemployment numbers predicted to hit 20% by 2019. We can expect to see plenty of discussion about this story in the coming year, including a feature post by The Rogue Bayman in the weeks to come.

2. Public Sector Job Cuts

Despite Dwight Ball assuring us over and over again that there would be no public-sector job cuts under a new Liberal government, unions are bracing for a battle as it is becoming apparent that job cuts are very likely on the table for Budget 2017. It is very hard to imagine that the government can reach its own financial targets without job cuts, but they money they save will come with a very deep cost to their political capital, which is already dangerously low. Any job cuts will result in a negative PR campaign by the unions that will likely include more public protests and marches in the streets. With contract negotiations due to begin soon, it will be interesting to follow how this story unfolds in the months ahead.

3. Ed Martin Severance Report

The Ed Martin Severance story dominated the news for several weeks in the spring of 2016 and then it kind of went away as we were asked to wait for the Auditor General to complete an investigation into the matter. The report was expected in the fall, but as of yet we have not heard anything from the office of the AG. People want to know who knew what, and when they knew it. The premier was caught in several lies on the issue, and it was the first of many knocks against Dwight Ball’s credibility. When the report is released it will bring the story back into the light, and from the way I see it, there is no way that Ball can come out of this looking good. He simply lied too many times for people to trust him on this issue.  While this may not be enough to force a resignation, this story has the potential to do serious damage to the premier’s already rocky reputation.

4. Hydro-Quebec

There was plenty of talk about backroom deals with Hydro-Quebec during the last sitting of the House of Assembly and I expect that it will evolve into a major story to watch in 2017. For starters, Newfoundlanders and Labradorians have a legendary distrust for Quebec, and in particular, Hydro-Quebec. Even if the government were in a position to get a good deal, (which they are not) it would be a hard sell to the voting public. With the Upper-Churchill renewal kicking in last summer, we were reminded again of that great Smallwoodian giveaway, and people will be wary of any deal with the Quebec boogeyman. Any discussion around developing Gull Island will create even more controversy and will draw the ire of Land Protectors in Labrador and create an even wider divide between the big land and St. John’s. Will Ball and Coady sell out our future once again for a little bit of short-term relief for Muskrat Falls? I guess we will have to wait and see

5. Budget 2017

It might be hard for many to imagine that Budget 2017 will draw the same sort of backlash that Budget 2016 caused, but with the aforementioned public-sector job cuts, the budget this spring will be a major story to watch. With nothing left to tax or put fees on and no real diversification plan, cuts are the only thing the Liberals have left to meet their own financial targets. We can likely expect more cuts to unionized jobs such as teachers and health care providers and less money for programs and services. It is hard to predict how deep the cuts will go, but there will be cuts and people will be angry. There will likely be more protests and marches and if the unions are hit hard they will spend plenty of money to make sure everyone knows that Dwight Ball lied to public-sector workers. No matter how much the government and the media try to portray the problems last year as just bumps in the road, people will not forget, and they will continue to be very vocal in the year ahead.

2017 has the makings to be another very eventful year, and The Rogue Bayman will be here to bring you the issues that matter to you. I believe that while we need to keep the governments feet to the fire on the issues that matter to us, we also need to start looking ahead and talking about how we can do things better. If 2016 was the year of anger and disappointment, then let us make 2017 the year of creativity and innovation. We don’t have to reinvent the wheel. The research and the solutions are out there, we just need to bring it all together and start looking at real evidence-based policy decisions. It is clear that our politicians do not understand the reality of information sharing in our new digital age, and we must continue to share the real truths about our lack of democracy and what we can do to enact real change. I wish you all the very best in the year ahead as we dig in our heels and show this government that we, the people WILL be heard.

RB

What is Austerity and Do We Need It?

What is Austerity and Do We Need It?

By: Ryan Young

Webster’s Simple Definition:

Austerity: a simple and plain quality : an austere quality

§  a situation in which there is not much money and it is spent only on things that are necessary

§  austerities : things that are done to live in a simple and plain way

Does anyone remember when the word “austerity” started showing up everywhere? It was in 2009, during the global economic crisis. The country of Greece was the first to implement drastic austerity measures and the term quickly caught on as a buzzword in the mainstream media. With the economic crisis putting the crunch on many of the worlds developed economies, the “austerity-doctrine” soon began to be implemented, especially in the Euro zone. The problem in Greece, however, was quite unique. After a decade of record prosperity, the Greek economy foundered in 2008 with massive debt holdings left over from financing the 2004 Athens Summer Olympic Games that left the country dangerously close defaulting. The austerity measures that the Greek government were forced to implement were a condition of an agreement with the Euro zone to provide a massive bailout to stabilize the country. The Greek economy had become unsustainable and drastic measures were needed to get it back on track.

But what is austerity, and what does it mean for us? By the very definition of the word, austerity is a situation where there is not much money and it is spent only on things that are necessary. In terms of government austerity, it means the cutting of government expenditures to only programs and services that are deemed necessary. But that is where it gets tricky. What is considered necessary spending can differ greatly from person to person. As we saw from our own government’s renewal initiative, there is a very wide variety of fiscal ideologies in this province. We know there will be serious short-term economic problems involved whenever government cuts jobs, but what we elect our leaders to do is balance those problems against the bigger problems such as skyrocketing debt and decreasing revenues.

One idea that was a common theme throughout all of the government renewal consultations, is that we spend too much on our public service. About 30% of our provincial work force is employed in the public sector. That is twice as much as Alberta or Ontario and well above the national average which sits at about 18%. According to Stats Canada, out of about 240 000 employed workers in the province, over 70 000 work in the public sector. The total amount spent on public sector wages is now approaching $4 Billion. To put that in perspective, in 1997, the total real amount spent on salaries and employee benefits was $1.7 Billion. In just twenty short years we have seen the size of our public service double. By 2013 the government was spending 47% of its expenses on wages and benefits. Add to that the $500 Million we spend each year in professional services and the unwise tax cuts of the Williams era, and you start to see where our fiscal problem came from. Our expenses are currently more than 50% more per person than the average of all other provinces. The simple truth is that the public service is too big for our tiny population and it needs to be adjusted before it implodes.

So why then, with all of this knowledge, do we have groups still waving the anti-austerity flag? A planned anti-austerity rally is being organized by the Social Justice Co-operative for next weekend and The Independent continues to publish articles that suggest that we do not have a spending problem at all. I understand the view from the left. Nobody wants to see job losses, and public service cuts will definitely have a temporary negative effect on our economy. But as much as we don’t want that to happen we have to address the reality of our fiscal situation. We can’t continue to bury our heads in the sand and hope that Newfoundland and Labrador will find some magical new source of revenue to lift us from despair. I find it ironic that many of the people who oppose spending cuts are the same people who oppose our offshore oil industry. It’s easy to see how the left often gets painted as a “crowd of dreamers” who write and talk with no grasp at all on the realities of fiscal solvency. The fact that organizations like The Independent are funded by the NDP, which are funded by the labor unions, might offer some clue into why there is such a push from the left against cuts of any kind to the public service, but no matter what they tell us, the real numbers about our public service expenditures do not lie.

I will agree with the fact that 30% across the board cuts are a bad idea. This blogger has already stressed the need for independent audits of each department to eliminate dead wood and free up employment for younger generations of job seekers. Across the board cuts based on seniority will not change the culture of inefficiency within government and will only further destabilize the labor market for the young families that we so desperately need to keep here in the province to grow the tax base. Each and every department is overspending while the quality of programs and services they provide is declining. There seems to be no accountability, and despite Premier Dwight Ball’s promise to clean out inefficiencies within government, for the most part it has been business as usual.

I don’t believe that the anti-austerity people have too much to worry about right now. I expect that this year’s budget will not contain too much shock value for most people. Most likely we will see some new fee and tax increases and some elimination of peripheral spending that will not ruffle too many feathers. The real shock won’t come until next year when the Liberal’s officially wrap up their Government Renewal Initiative. That’s when Dwight Ball’s government will have to make the choice between continuing to sit on the sidelines or tackling on the problem head-on and leaving a real mark on government that will carry them into the next election.

That was the path that led Clyde Wells to a second term despite “Clyde Lied,” and if this government wants to be there when the dust settles after the next election they have to do the dirty work now and show us that a stronger tomorrow really is within our grasp. We can only hope that this new government will at least use this year’s budget to let the public in on the direction they are planning to take with our fiscal future.

As for austerity, we need it whether we want it or not. The real question is: Does this government have the guts to make those hard choices? I guess we will have to wait and see.

Is it Time for Independent Auditors and Performance-Based Layoffs?

Is it Time for Independent Auditors and Performance-Based Layoffs?

By Ryan Young

Inefficiencies said Dwight Ball. Streamlining said Cathy Bennett. Getting more for less was one of the only things the Liberals had to campaign on in-lieu of an actual platform during the general election last November. Surely that idea had been lost on the previous PC governments who, in contrast, embraced a less for more mentality by not only bloating the public service, but by increasing the amount the government spends on “professional services” to tell the bloated public service how to do their job. Dwight Ball promised over and over that a Liberal government would eliminate “inefficiencies” in the government sector that would provide “massive” savings for the province.

So far Premier Ball has asked his Ministers to look for 30% savings in each of their respective departments. While there are many inherent problems with this approach, let’s focus on just one aspect of how it will fail to produce results.

Most Ministers are currently saddled with several portfolios due to an ineffective gesture by the government to make it appear like it is saving taxpayer money by reducing the number of members in cabinet. In reality this is stretching the duties of the Ministers (See Christopher Mitchelmore and his 3 major portfolios) to the point that they are unable to effectively engage in the operations of any single portfolio. More plainly, it means that they can’t do a proper job as a Minister if they can only devote 30% of their time to any one department. Because of this, most of the real work within the departments is done by the bureaucrats. By asking departments to look within for 30% savings, the Premier is asking managers to identify friends and co-workers that may be expendable. Newfoundlanders are good hearted people by nature and dropping the ax on a friend whose job is redundant  is not something that many managers will be happy to do. Even the fairest of managers in the group will have some bias. It is human nature and it would be foolish not to take this aspect into consideration. Certainly we need to find savings but maybe we need to look at a different approach. Instead of sticking with the status quo, wouldn’t it be fair to assume that in order to find real inefficiencies in the system, it might be wiser to take the responsibility of making cuts out of the bureaucrats and put it into the hands of independent auditors. These auditors would be given full access to each department and would compile comprehensive reports on how each department functions and provide recommendations on how to streamline services and become more cost-effective.

As part of this process it may also be time to take a look at performance-based layoffs as opposed to job losses based on seniority. I know at first glance that all of my union friends will cry foul at me, but it is no secret that there is a lot of dead weight in our public service. Anyone who has had to deal with the government bureaucracy will agree that our government sector could be performing better to serve the needs of the public. As JM pointed out in his “Decade of Squandered Opportunity,” no union boss or shop steward would ever publicly agree with performance-based layoffs, but if it were put to a private vote, most of the rank and file would rather trim the dead weight than let go of the fresh new hires that so often do the brunt of the work. If the decision is left to managers we will have a public service with just as many bureaucrats and less front line staff to actually get the work of running the province done.

We are in a deep hole financially but many still choose to bury their heads in the sand and think that our problems are all because of the price of oil. The media fails to report that the size of the public service has doubled in the past twenty years. Public sector salaries and benefits rose from $1.7 Billion in 1997 to nearly $4 Billion in 2013. Since the unions are nearly due for a raise and Premier Ball has repeatedly said that public service layoffs are “off the table,” we have to wonder who will take a leadership role and do what needs to be done to bring the public service back to a sustainable level.

None of us wants to see any person lose their job. We certainly understand the negative effects of cutting public-sector jobs, but if it has to be done, shouldn’t we make that decision in the best interest of the province instead of the best interest of the bureaucrats? Isn’t it better to trim dead weight than new growth? If we are ever going to get this ship back on track we need someone to show some courage and leadership, both of which seem to be currently in short supply. The time is now. The notion of big brother taking over our government if we can’t take care of ourselves should not be a foreign concept to any thinking Newfoundlander. They just have to ask themselves if that’s what they want to see happen or will they choose new ideas and demand real leadership to lead us through. I guess only time will tell.