Falcon shrinking government in name of restraint

Craig McInnes, Vancouver Sun

…. Falcon is doing more than just holding the line on spending. He has set a target – a two-per-cent increase in each of the next three years – that will reduce the size of the government relative to both the size of the economy and the population it serves. His budget predicts about four-per-cent growth each year in nominal GDP. That’s the figure that, all other things being equal, governments can expect their revenues to grow by.

Despite his assertion that this is a virtuous path onto which he has recently stumbled, it’s the road the Liberal government has been down for the past decade; all he has done is pick up the pace.

Over the past decade, the economy grew by 53 per cent while government spending increased by only 41 per cent. At the same time, BC Statistics reports the number of people employed by the government – expressed as full-time equivalents or FTEs – fell, so that while there were 94 British Columbians for every provincial government employee in 2000-01, by 2010 there were 131. Falcon’s plan calls for a further decrease over the next three years of 2,000 FTEs….

Falcon’s 2012-13 budget essentially freezes the budgets for 13 of 16 ministries. In government, a freeze means that the ministry has to start looking for ways to cut back, since even with the relatively low inflation rates, the cost of delivering the same level of service next year as they did in the past is at least three percentage points higher when population growth is factored in.

Looking at the ministry of children and family development, one of the flatlined ministries, you can see how this works. Three per cent of the $1.33-billion budget is $40 million. So in the first year, employees have to find $40 million in services to cut. In the second year, $80 million and in the third, the cost of providing the same level of services for children is $120 million more, $120 million they won’t have for children and families in need. …