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Fiscal Restraint Needed for Manitoba

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12Aug

By: Graham Lane
Posted: Winnipeg Sun, August 12, 2016

Governments are expected to act in the broad public interest, too often they haven’t. Advantage may go to
those supporting and paid by government, disadvantaging the majority of taxpayers.
Governments have two ‘honey pots’ to draw on, taxation and borrowing. Raising taxes affect taxpayers
immediately and can bring about electoral defeat. Borrowing allows government to spend more than they take
in, delaying the time when taxpayers have to pay for the goods or services bought by borrowing.

While borrowing avoids the immediate need to increase taxes, it also reduces future governments’ flexibility.
Still, borrowing is not always bad. Borrowing is bad when done outside a recession to fund day-to-day
operations of regular ongoing public services. Only when used to fund new infrastructure providing bona fide
long-term public benefits can borrowing make sense.

Too often archaic policies waste taxpayer money with abandon. Wildly bureaucratic and dysfunctional
personnel policies had Winnipeg’s mayor paying half a million to split with an administrator and a quarter of a
million to a police constable for a year’s work with overtime. What should we think?

Former NDP Premier Selinger paid off his close political advisors, discarding them because they preferred a
different leader. He must have known that many would simply move on to Alberta’s NDP or their former union
employers after pocketing overly large severance payouts. What about the NDP using borrowed funds, higher
utility rates and creative accounting (masking future rate hikes) to ‘give away’ a share of two unneeded
multibillion dams to a select group of First Nations while subsidizing American utilities?

Too often governments act as if our money are theirs. Taxpayers are rarely asked if they want their hardearned
tax dollars spent on economically dubious items, like bus rapid transit.

Governments have also found it easier to give in to union contractual demands than stand up for unorganized
taxpayers. Why not dig in and say no? Because if they do the unions pressure and criticize them, using slick
advertising campaigns and threatening to withhold services. Standing firm is not usually praised in the media,
creating the risk of a loss in the next election. Much easier to give in than stand up for taxpayers.

In the past, efforts have, though rarely, been made by a government to control spending. The Filmon PC
government of 1987-1999 actually passed a balanced budget law with teeth. (The Doer-Selinger regime slowly
pulled the teeth, removing all restraints on its hand-over-fist spending.) Filmon actually took on the public
sector unions, holding down contract terms while avoiding uneconomic mega projects.

The Filmon government deserved special praise because it served in difficult times. With the federal Liberal
government slashing transfer payments Filmon had two choices: restrain and cut costs towards eliminating the
structural deficit left by NDP Premier Pawley, or continue running large deficits and raising taxes. By taking the
first route he saved Manitoba’s ability to borrow and paved the way for balanced budgets.

The new Pallister PC government has an enormous opportunity to end wasteful spending by modernizing
public sector services and implementing effective balanced budget legislation. The combination, done smartly,
could break the back of the NDP’s wasteful spending coalition to the applause of the silent majority of
taxpayers..

Graham Lane chairs Manitoba Forward (manitobaforward.ca).

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