Video: Primer on Alberta budget shows government ignoring basic rules, arms citizens with hard questions
CALGARY, Jan. 22, 2013 /CNW/ - The Alberta government will release its
2013 budget on March 7th. Unfortunately, budgets like this tend to be laced with financial
jargon and political rhetoric, making it hard for the average citizen
to understand the true state and direction of provincial finances. That
is why Professor Ron Kneebone of The School of Public Policy has
produced a "citizen primer" for Alberta's budget.
As Kneebone outlines the basics of how governments arrive at either a
surplus or deficit in any given year, and what they do in response to
either case, he begins to unveil some unnerving realities regarding
Alberta's finances - some of which are the product of basic budgeting
rules being broken.
One of these realities is the province's reliance on volatile
non-renewable resource revenues to fund spending on health, education
and social assistance. Kneebone contrasts Alberta's situation with that
of an average family, which he argues would never rely on an
unpredictable income source to pay for its necessities.
In Alberta, if royalty revenues are low in a given year, all of a sudden
the government doesn't have enough money to fund programs or service
its debt. As Kneebone points out, in recent years the government has
decided to solve this problem by dipping into savings, specifically the
"Between 2008 and 2012 the government reduced savings by $16.5 billion. The average annual rate of burn of the government's savings during this
period — $4.1 billion per year — is eerily similar to that during the
Getty years — $4.3 billion per year," he writes.
With provincial savings dwindling, this then raises the question as to
whether future generations will be left paying higher taxes or facing
cuts to programs because of today's financial practices.
Bearing these issues in mind, Kneebone recommends Albertans pose three
questions to those in government and other political parties hoping to
win our confidence and represent our interests:
How tolerant are they of annual deficits?
To what extent are they willing to trust payments for health, education
and social assistance to energy royalties versus taxation?
How, exactly, do they define investments in social infrastructure and
what limits would they put on funding these expenditures with borrowing
or non-renewable resource royalties?
The report can be found at www.policyschool.ucalgary.ca/publications
Video with caption: "Video: Primer on Alberta budget shows government ignoring basic rules, arms citizens with hard questions". Video available at: http://stream1.newswire.ca/cgi-bin/playback.cgi?file=20130122_C7890_VIDEO_EN_22854.mp4&posterurl=http://photos.newswire.ca/images/20130122_C7890_PHOTO_EN_22854.jpg&clientName=The%20School%20of%20Public%20Policy%20%2D%20University%20of%20Calgary&caption=Video%3A%20Primer%20on%20Alberta%20budget%20shows%20government%20ignoring%20basic%20rules%2C%20arms%20citizens%20with%20hard%20questions&title=Primer%20on%20Alberta%20budget%20shows%20government%20ignoring%20basic%20rules%2C%20arms%20citizens%20with%20hard%20questions&headline=Primer%20on%20Alberta%20budget%20shows%20government%20ignoring%20basic%20rules%2C%20arms%20citizens%20with%20hard%20questions
SOURCE: The School of Public Policy - University of Calgary
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