The Campbell government's growing credibility gap may interfere with public acceptance of the number one promise - balanced budgets. Protection of essential public services has taken a backseat to myopic attention on reaching a balanced budget for 2004-05 and thereafter. The problem is that the public will have to accept government's word that the budget is balanced because the Auditor General's report on fiscal year 2004-05 will not be available until a couple months after the election, and his report on the budget that will be tabled in February 2005 will not be available until more than a year after the election.

Can we accept government's word that the budget is balanced? The projection provided with this year's budget shows why claims about future balanced budgets are not credible. Table 1.1 at the very top of the budget documents showed a projection of a $50 million surplus for 2004-05 and a $375 million surplus for 2005-06; what it didn't show is any provision for a forecast allowance. The inclusion of a $750 million forecast allowance is the device that was employed by Finance Minister Gary Collins to exaggerate the financial challenges faced by government in 2001, and to subsequently claim good management when they didn't have to use it. This year the forecast allowance was set at $500 million and at the end of the second quarter $50 million of it had been drawn on as if it were a contingency fund; that is the same amount by which Collins claims the budget will be balanced for the fiscal year beginning April 1, 2004. Inclusion of a $500 million forecast allowance in the projections for 2004-05 will put the budget into an illegal $450 million deficit.

Even in the absence of a forecast allowance, the surpluses projected for the next two years are small relative to the size of the provincial budget. $50 million in 2004-05, let alone $350 million in 2005-06, is a lot of money, but as percentages of the provincial budget that is less than two tenths of one percent of direct government spending for 2004-05, and less than one and a half percent of government spending for 2005-06. Collins' Second Quarter Financial report for 2003-04 made it clear that numerous components of the budget can uncontrollably swing by those amounts and cancel each other by accident and good luck. For example, the report said that in addition to $500 million in unexpected costs related to forest fires, government expected to receive $675 million less than originally anticipated in federal equalization payments.

Some might say that a government that denies it sold BC Rail would have trouble getting anyone to believe what it says. Others might suggest that a government mired in unanswered questions over an RCMP raid on the office of the Finance Minister might suffer some credibility problems. It is not necessary to consider those reasons for the government's credibility gap in order to reasonably conclude that claims about a balanced budget are not believable; simply looking at the numbers, the normal range of errors and the fact that the Auditor's report won't be available until after the election, means that reasonable people cannot believe what the Campbell government says about balancing its budget. People who accepted Campbell's word that tax cuts would pay for themselves will probably be skeptical before they accept any more vanishing economic sunshine.