If we could turn back time-
Author:
David Maclean
2004/01/28
It's often said that "hindsight is 20/20." The old expression means it's easy to be critical when events have already happened. It helps us absolve ourselves of past mistakes, and continue working toward new solutions. When looking at Saskatchewan's current fiscal problem, is hindsight 20/20, or were the implications of the decisions made just five years ago blatantly predictable
In 1998, the Government of Saskatchewan was sitting on a $326 million surplus (the amount that government revenues exceeded spending) - the fourth surplus in a row. In general, expenditures were on the decline and the size of government had stabilized. 1998 was the last year of fiscal sanity in the province.
Beginning in 1999, the great Government Spending Spree began. That year saw the surplus shrink to $69 million with an increase in government spending outstripping a fairly substantial increase in revenues. In the next year, the government again hiked spending by nearly $600 million while the population declined.
Revenues declined between 2000 and 2001 by around $120 million, and the government responded by reducing expenditures, thus preserving an impressive $460 million dollar surplus. From here on in, things just get plain weird. After Premier Calvert took power, government spending went skyward.
That 2002 was a rough year can not be questioned. But the real story lies in government spending in all areas. While crop insurance payments topped $500 million, virtually every other government department was ratcheting up spending and hiring employees. In other words, doing what government does best.
In the coming days the province will release their third quarter update that will confirm yet another deficit - likely in the neighbourhood of $500 million. By the end of this fiscal year, this government will have taken on $1.6 billion in new debt.
How does Premier Calvert's spending spree stack up against Grant Devine's Hold on to your hat -- the province's debt is larger now than when Grant Devine left office. Of each provincial tax dollar collected, 22 cents goes to pay the interest on the provincial debt.
What should we have done differently in the past five years Well, consider if government spending increases remained constant with inflation, our surplus for this year would be $938 million dollars. And that's even after you factor in the increases in health spending. Our accumulated surplus since 1997 would be $5.4 billion.
The simple truth is that the government revenues are currently higher than ever before. In fact, it seems the only entity in Saskatchewan not feeling the pinch from the drought is the government revenue department. What do we have to show for the government's massive spending spree A thousand new bureaucrats and a handful of failed businesses like Spudco.
Now, in the next budget, the government will go back to taxpayers and ask us to tighten our belts and pay more tax, while they have done nothing to tighten their own. Say no to tax hikes and tell the government to turn back the clock on government spending. Sign the petition at www.taxpayer.com and tell the government to balance the budget without raising taxes.
In five years, when we look back on the decisions we make today, let's make sure we're can't say: "well, hindsight is 20/20."