But you still have to think long-term, a point Nova Scotia’s auditor general made this week.
The overall debt for the province, now in the range of $15 billion, represents a vast financial challenge, auditor Michael Pickup warned in his report released Wednesday. It increased by $3 billion over the past 10 years. Although he commended the current Liberal government for its surplus in the past fiscal year, he reminds Nova Scotians of how interest rates on massive debt can be overwhelming.
Adding some extra context, Pickup said that over those 10 years, the province has had to pay $7.5 billion to service that debt, an amount equivalent to paying about two years’ worth of health costs.
So when a slim surplus is announced, perhaps it’s some cause for celebration, but it only means we’re not sliding backward quite as seriously. When government critics say, hey, look at all this money, why are they being stingy, well, we’re by no means out of the woods yet.
What that tells us is that every government needs to work at eliminating that year-to-year structural deficit.
As Pickup notes, the current mountain of debt was amassed by a series of governments, made up of a variety of political stripes.
Interestingly, when John Hamm’s Conservatives were in power, they passed legislation requiring governments to deliver balanced budgets. It was a fine idea, but proved overly optimistic.
As the NDP government found a couple of years later during the start of its term, balancing a budget as the economy plummeted was not going to be possible. They had to undo the law.
And we have to acknowledge keeping the numbers in the black won’t always be possible, but it should be the rule, rather than the exception to the rule.
Many analysts have pointed out that the long-term planning one would find with a corporation does not mesh with the relatively short-term outlook of a government’s time in office. Nor is the cynical ploy of offering extra “promises” at election time helpful.
But another element that gets in the way of the big picture over the long haul is the inevitable changing of the guard every several years. That’s obviously part of the democratic process, but somehow, the various parties need to set aside the predictable stance of being contrary for the sake of being contrary and actually plan, collaborate and agree on big-ticket items. Admittedly that’s easer said than done, but some continuum is crucial.
At any rate, the reminders from the auditor general on the fiscal state is a good wakeup call for politicians – but also for the public, who need to demand politicians keep the issue front and centre at all times.