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Budget cutters blind to mixed messages

The Finance ministry has pages of financial data on how diligently it is eliminating waste and slashing unnecessary spending en route to balancing next Februarys budget.

The Finance ministry has pages of financial data on how diligently it is eliminating waste and slashing unnecessary spending en route to balancing next Februarys budget.

But the whole theme is negated when people turn on their TVs and endure another round of the saturation ad blitz about the B.C. Liberals jobs plan, all paid for with tax dollars.

Finance Minister Mike de Jong spoke at length last week about the razor-thin margins hes working with when it comes to making the current deficit vanish by next year. The message from his briefing was that they are squeezing every nickel. It doesnt square with the evidence in all the media endless feel-good ads about the Liberals economic strategy, some of them putting Premier Christy Clark front and centre.

Theyre budgeted at $15 million and theres no doubt the government will spend every nickel in that allowance. The rationale offered was that its an aggressive information campaign to grow confidence and attract investment.

But nobody takes that seriously. The jobs plan is the only new initiative the preoccupied B.C. Liberals came up with in their third term. So theyre going to ride it for all its worth.

Even de Jong appears to be having trouble with the glaring discrepancy in the messages. He gave an insipid defence of the ads, but acknowledged that people would question the outlay and that he has heard the concerns.

They look even more absurd now in light of de Jongs outline showing the deficit for the current fiscal year is getting bigger, not smaller. Its mostly because the timing of a Âé¶¹´«Ã½Ó³»­social-housing land deal has been changed, so more than $200 million in revenue will arrive next year rather than this year.

Combined with other revenue drops, that means the deficit, originally estimated at $968 million last February, then adjusted to $1.1 billion three months ago, is now pegged at $1.5 billion.

Its going in the wrong direction. Just to make things interesting, de Jong introduced a new concept. He doesnt just want a balanced budget, he wants a credible balanced budget. That means a big enough surplus to be convincing when he announces it on Feb. 19, rather than a slim one that the Opposition can heap doubt upon.

Small but steady economic growth is expected to erase most of the red ink in time for the next budget speech. The spending clampdown is designed to erase more. The government aimed for $240 million in savings earlier and still has $65 million to cut. But even with those measures, de Jong said the government still needs to find $200 to $300 million more.

Not just to remove the deficit, but to post a big enough surplus to look convincing. The usual areas have been targeted. Theres a hiring freeze, a salary freeze for managers and restrictions on travel.

But revenue drops continue to offset the savings. Coal revenue has joined natural gas in not meeting initial expectations. And the property-transfer tax is bringing in about 10 per cent less than expected.

De Jong said his ministry is still wrestling with the gap.

His briefing had been promoted earlier by Clark. In what was billed as an important address, she told a Port Coquitlam group on Tuesday that his outline wasnt going to be pretty.

The idea was to pitch the B.C. Liberals as engaged in a heroic struggle almost alone in Canada and the world to stop running deficits. And to contrast that with certain Opposition leaders less-than-fervent support for balanced budgets. Theres no question B.C. is making progress. Albertas quarterly report was also issued Wednesday and shows that government aiming for a $2.3-billion deficit this year. B.C. is years ahead of Alberta and Ontario in deficit reduction.

So far, Clarks government has managed the spending cuts without attracting much attention. There havent been any wholesale program cuts. And health and education are on the protected list, exempt from any real budget reductions.

But that last $300 million or so is going to be the hardest.

There is virtually no room for any timed pre-election spending extravaganza, de Jong told reporters.

Except for the sustained, political pre-election advertising drive thats apparently on the protected list as well.

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