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| Sooner or later, the bubble will burst - Thursday, February 26, 2004 at 11:44 |
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February 26, 2004 It was all about who could spend the most money: Klein, who actually can, and premier wannabe Taft, who would love to get his hands on Albertans' tax and energy royalty cash. Then you'd really see some fireworks. Taft accused the Tories of running a "have province with have-not services." Then he lit into the usual Liberal baloney of "little children who sit in schools hungry" and "seniors stranded in understaffed nursing homes." Klein's staff had armed him for the predictable Liberal onslaught. And he reeled off a long list of massive spending initiatives, basically to prove that an Alberta Tory can spend any bit as good as an Alberta Liberal. Better, in fact. "While the opposition is sitting there twiddling their thumbs and counting pennies, we're counting the billions of dollars of new infrastructure in this province," stormed Klein, who then reeled off a number of school, highway and seniors lodge projects. It was quite a sight watching the premier come unglued because someone challenged him for not being enough of a free-spending Liberal. The same role reversal occurred when Nelson had her moment before the cameras earlier in the day, after announcing in her third-quarter budget update that the net revenue prediction for the year had hit $3.3 billion. And the sustainability fund was valued at $4.2 billion before $1.8 billion was stashed away in the debt retirement fund and the capital fund. And that was after $1.2 billion had been drained out of it for mad cow money, natural gas rebates and forest fires. In other words, right now the province is riding an incredible wave of prosperity, just like it did in 1974 and 1979. And like anyone who went through the first and second great oil booms knows, what goes up must come down. But instead of recognizing this, Nelson and Klein appear to be headed on an even greater spending spree. The fiscal framework that was supposed to guide and discipline the Tories for the new millennium has been trashed after less than a year in operation. The $3.5 billion in resource revenue allocations to run government programs is about to be ratcheted up to $4 billion in the new budget that will be delivered soon. The budget will almost certainly contain a couple of billion dollars in new spending, and, if it doesn't, spending will probably increase by that much by the end of the 2004-05 fiscal year anyway. And any thought of the premier achieving his nirvana of sustainability will be hopelessly wasted. Ironically, in the midst of riches the Tories may be sowing the seeds of Alberta's coming fiscal distress. And while Klein was trying to preach to the federal Liberals about soaring health-care costs and going it alone, back home he and Nelson have steadfastly refused to challenge the real reason why health-care costs continue to rise at seven per cent a year while government revenues putter along at three per cent, and that's the fact that 75% of the total tax bill goes to wages, fees and salaries. But whenever push comes to shove, the Tories turn turtle and give the special interest groups double-digit wage increases. Now Klein is musing about finding ways to "generate significant revenue" for the health-care system. In Klein's own words, it's the "no-brainer" solution to a political problem. It's a problem that Nelson recognizes is coming but clearly doesn't want to confront. Yesterday she was talking about a "more normal market correction" coming for energy prices. "So therefore we have to realign our spending so we don't have a position down the road where we can't sustain the core programs of government," Nelson confessed. But until then, the Alberta Tories' new slogan is "Wanna party?" |