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September 27, 2012

Balanced Budget Act a Farce

The Balanced Budget and Ministerial Accountability Act is a farce. It provides for a 10% pay cut for cabinet ministers if they exceed their ministerial budget, and another 10% pay cut for all ministers if a deficit is incurred in the main estimates. The pay cut applies only to the extra pay a minister receives, not to their base MLA salary. Do we have politicians who would close a school or hospital, be harsher on welfare recipients or weaken child protection in order to avoid what for them is a trivial penalty? Of course not. The law is meaningless window dressing. If a minister were to incur consequences for not achieving results, it should be for not achieving key outcome measures. The Premier demotes non-performing ministers, and voters fire non-performing governments. Token penalties that are badly focused are little more than an attempt to con the public.

The Members Remuneration and Pensions Act provides that the Premier is paid 90% more than the base pay for an MLA, a minister 50% more and a member of the executive council without portfolio (minister of state) 35% more. The legislative website lists compensation with the base salary for an MLA as $101,859 as of April 1, 2009; a minister receives an extra $50,930. The 10% penalty for a minister whose budget is exceeded has never been applied because the government, when necessary, introduced rescue legislation redefining duties and budgets for ministers at risk, laughingly called Ministerial Rescue Bills. The 10% penalty for all ministers when the overall government budget is in deficit amounts to $5,095 for ministers whose total pay is $152,789, which is $424 per month for people making $12,732 per month. Proponents of the Balanced Budget law, like the Canadian Taxpayers Federation, would have you believe that the behaviour of ministers would change because of that penalty. I don't think so. The reality is government revenue is depressed as a result of the global economic situation. That's why the budget should be balanced over a business cycle, or if that escapes definition, painful adjustments should at least be made over several years.

Adrian Dix said he believes in balanced budgets. What he doesn't believe in is foolish legislation that is designed to trick the public. He told reporters following his speech at the UBCM that the Act is ineffective and unnecessary.