Newshounds grill Dexter

 Nova Scotia Premier Darrell Dexter and his Finance Minister, Graham Steele underwent a sustained grilling today at the hands of the Halifax media. Reporters demanded to know why the pair could consider raising taxes, cutting spending and not balancing next year's budget when only a few months ago during the provincial election campaign, they promised a balanced budget with no tax hikes or major spending reductions.

"We did not have the information that we have today," a grim-faced Dexter told his inquisitors. "Six months ago, no one would have believed what we're facing today."

Dexter and Steele were reacting to the report of the Nova Scotia Economic Advisory panel released on Friday. The panel warned that trying to balance next year's budget would wreak havoc on the economy as well as on public services that people need. It also warned that tax increases and spending reductions would be needed to balance the budget in four years. Without such measures, the province would face a budget shortfall of $1.3 billion by 2013.

"We intend to balance the budget. We intend to live within our means," Dexter declared. But he added he believes the economic panel's advice is sound. "I recognize that we cannot balance the budget next year." He also conceded that tax increases would be needed even though he claimed that "tax burdens in this province are already unacceptably high."

Gloom and doom's brighter side

The NDP government's decision not to balance the budget this spring is welcome news for those who value social programs and the public sector workers who deliver them. Slashing public services in the name of balancing the books puts financial accounting ahead of people's needs. As Dexter himself pointed out to a reporter who was pressing the idea of government cuts to save money, "You can't take away services that people need."

At the same time, however, the premier made it clear that some cuts are on the way. It would be a matter of balancing cuts against needs, he suggested adding the government had to figure out, "How we take that envelope of services and fit it into the financial envelope that we have."

The sudden, serious talk of tax increases --- until now, considered a form of political and economic lunacy --- is also welcome news for those who believe government programs have been squeezed too hard in an effort to free up as much money as possible for private consumption. Public services benefit everyone. According to a recent study by Hugh Mackenzie and Richard Shillington, in 2006, the average Canadian received a benefit worth $16,952 from public services such as health care, education and personal transfer payments like pensions or child tax credits.

Gloom and doom's downside

Unfortunately the so-called crisis over rising government deficits and debts takes attention away from the perennial problem of poverty in Nova Scotia. Darrell Dexter himself suggested to reporters that significant steps to reduce poverty might have to wait until the deficit monster is slain. As noted in my previous blog post, No help for the poor, the government's Advisory Panel had almost nothing to say about alleviating poverty --- a personal crisis for thousands of Nova Scotians.

At today's news conference, I asked the premier: "What effect will the Advisory Panel's recommendations have on any plans your government might have to raise welfare rates up to the StatsCan poverty line?"

"We believe poverty in the province is an important issue," Dexter replied, suggesting (apparently) that the NDP would follow through on the Conservative's Poverty Reduction Strategy with its glacially slow-moving plan to reduce poverty by 2020.

During the election campaign, the NDP itself promised such things as more affordable housing, additional non-profit child care and a plan to allow welfare recipients to keep more of their earnings if they land a job. But when I pressed him on the possibility of significant increases in welfare payments, Dexter replied tartly, "We didn't campaign on welfare rates."

Indeed. Once again, even with the NDP in power, it seems the poor will just have to wait for better days.