Budget Needs RevisionIt is time for Premier Clark and Finance Minister Falcon to admit that BC's budget will not be balanced until a year or more after the next provincial election.
Speaking at a lunch hosted by the Calgary Chamber of Commerce (rather than in the House of Commons), on Tuesday, November 8, 2011, federal Finance Minister Jim Flaherty admitted his plan to balance the budget requires revision and postponement until 2016-17. A background document states: "Nominal GDP is the broadest single measure of the tax base and its downward revision drives a significant decrease in tax revenues over the projection period."
Falcon's budget is affected by the same negative factors as Flaherty's. Falcon's First Quarter Financial Report maintained the fiction that the BC budget will be balanced for fiscal year 2013-14, although it said an additional $458 million in revenue is needed to achieve that feat. Promising a balanced budget for the fiscal year ending March 31 2014 may remind voters of what happened after the 2009 election when they discovered the government's numbers were not reliable. Flaherty’s estimates of slower revenue growth from both the personal income tax and HST, when projected to BC’s budget, means a loss of approximately $300 million on an annual basis.
The Budget Transparency and Accountability Act requires the Minister of Finance to release his Second Quarterly Financial Report no later than November 30th. It is unlikely to be released before the legislative session adjourns, but once it is look to see if Minister Falcon follows the lead of his federal counterpart, by restating estimated revenue and admitting that a balanced budget will not be achieved until well after the May 2013 election. Going into that election, as Gordon Campbell did in 2009 with unfounded optimism, will further undermine trust in the Clark government.