Measuring progress toward a better future

It’s time to look ahead toward the next provincial budget.

The provincial Liberal government is now working toward its spring budget, and it is no doubt getting an earful from paid lobbyists. The usual suspects, like the Employers’ Council (NLEC), are still crying foul on public spending.

Government, of course, will be considering the longer-term: balancing the budget over the multi-year business cycle as economists recommend.

Government will also need to consider the health of the broader economy. As Common Front NL pointed out earlier this year, they need to work toward what matters to the voting public: an economy that is jobs-rich, fair and sustainable.

Adopting that vision means short and long term budget changes, that bring us closer each year to that vision. It also means tracking the right indicators, and reporting those to the public.

However, when the discussion focuses solely on indicators like GDP, government spending, and deficits; government feels less incentive to consider important values like fairness or long-term quality jobs. When the conversation includes indicators of broader values, government will be able to do a better job on budgets and policies that serve those values. What gets measured matters.

And it matters a lot for the next budget. The health of the broader economy is best served by maintaining a steady fiscal climate and bolstering local demand. Massive spending cuts, like those proposed by the NLEC, would devastate the economy; deepening employment losses and injecting fuel into the negative tail spin. As Premier Ball recently observed, individual employers would be poorly served by massive public spending cuts; such cuts would reduce demand and purchases in the private sector, likely pushing some firms out of business.

The top of the list for boosting the health of the economy is addressing unemployment, which is at a disgraceful level, and could be dangerous if it rises further. The ‘official’ unemployment rate is 14.5 percent, more than twice the Canadian average. And the real rate is much higher. That 14.5 percent doesn’t include people who work part-time involuntarily, those waiting for jobs, and those who have simply given up looking for work. The real rate is above 18 percent—almost one in five.

When preparing its budget, government needs to be in ‘job-creation’ mode, not in ‘slashing’ mode. They need to ensure that budget measures build the framework for quality jobs, by investing in quality public services, diversification, and local procurement.

Government needs to be focused—and reporting to the public—on the full picture of unemployment, not just the ‘official’ level. They need to focus and report on the quality of the jobs created. It is increasingly important to track job quality, to ensure new jobs are not just temporary, part-time precarious work.

Government also needs to be focused on fairness. We know that poverty harms the economy, but income inequality—apart from poverty—is also an economic drag. Inequality is associated with significantly worse outcomes for physical and mental health, drug abuse, educational attainment, imprisonment levels, obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being.

After-tax income inequality has been rising in Newfoundland and Labrador since the 1980s, and StatsCan data shows that Newfoundland and Labrador is the third most unequal province in Canada, in addition to having the third-worst gender wage gap. Fair taxation and spending by the government can significantly reduce inequality. Government needs to pay close attention to inequality measures when designing its budgets, and when reporting to its citizens.

On environmental sustainability, government has been making some positive moves. Its new program of low-interest loans for energy efficiency improvements, will help reduce energy consumption, while also easing the cost of living and creating jobs. Premier Ball announced that the province will work cooperatively with the federal government, to bring in a carbon pricing system by spring 2018.

These are good starts, and government must continue to adopt policies that reduce greenhouse gas emissions to meet its targets. While the federal government reports on annual emissions, it is up to the provincial government to obtain and publicly report on independent, credible forecasts of future emission levels, based on the policies it adopts. Investing in renewable energy and green jobs is another opportunity the government cannot afford to miss, which means they should be measuring and tracking that sector.

There is a great deal of good that the Liberal government can do in the next budget. The budget is not only a financial plan for government, but also a profoundly important economic document. It can take us down the road to austerity, which we know from other jurisdictions will result in further economic contraction. Or it can take us down the road to a better future—one that is jobs-rich, fair and sustainable.

The budget is also a political document. Recent budgets have been controversial, to say the least, and the voting public is now watching closely. They will want to see a budget that takes us to a better place, and they will want to see signposts along the way that tell us we’re heading in the right direction.

Mary Shortall is President of the Newfoundland and Labrador Federation of Labour. The Federation is a member of the Common Front of Newfoundland and Labrador.

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