Times necessitate austerity

April 7, 2017 2:21 pm • By John Gormley John Gormley

John Gormley is a broadcaster, lawyer, author and former Progressive Conservative MP whose radio talk show is heard weekdays from 8:30 am - 12:30 pm on 650 CKOM Saskatoon and 980 CJME Regina.



The word “austerity” has become a political and social flashpoint of our times. After Saskatchewan’s tough budget, even austerity’s definition is debated.

Many of us know austerity as government restraint measures like cutting spending and wages, reducing budgets and increasing taxes, designed to align revenues with spending in the hope of stabilizing public finances.

Although a bitter pill to swallow, austerity measures try to tackle deficit spending, save future taxpayers from high debt and interest payments and make an economy more competitive.

But in the era of culture wars and activism, “austerity” has come to mean difficult socio-economic conditions and consequences deliberately imposed by governments to reduce spending for the purpose of pushing down wages, increasing prices, lowering standards of living, all to benefit the rich at the expense of the marginalized.

For anti-capitalists-whether civil society advocates, members of Occupy, modern progressives, socialist intersectional feminists or old garden variety lefties -- this argument is like catnip.

Austerity, they claim, is actually a neo-liberal ploy (which they used to call neo-conservative) deliberately intended to cause class struggle.

In Saskatchewan, austerity is not some big, bad right-wing conspiracy as much as it is necessary to prevent economic pain later.

The government, to reverse a $1.3 billion dollar deficit, is raising the PST to six points, broadening it, and reducing spending both in government and on civil service salaries.

For example, the “Big Three” of Health, Education and Social Services-which consume 75% of all government spending or $10 billion-will see an overall spending increase of just 1%.

Broken down, it actually amounts to .7% growth in the massive Health budget, a cut of 1.2% in Education and a 9.1% increase in Social Services.

No one is happy-not farmers or businesses paying more taxes, civil servants, university professors whose institutions take a 5.5% cut or school trustees, municipal councillors and the rest of us who are not only hit with higher PST but also tax on every insurance premium come summer.

The immediate attention is grabbed by the closing at the end of May of STC, the chronic multi-million dollar losing government bus company, and cities angry over a cancelled $36 million Crown corporations grant to 109 municipalities.

In the mysterious and opaque alchemy that is municipal government financing, this year the province will still pay hundreds of millions of dollars to municipalities in revenue sharing, utility payments and infrastructure, transportation, road maintenance, transit, and policing grants.

But on the pending Crown payment changes, the government owed cities a clearer warning of what was coming.

That being said, sympathy is a challenge for Saskatoon and Regina which have both raised taxes while collecting 150% more in revenue sharing in recent years-all while sporting growing reserve funds of over $140 million in Saskatoon and over $235 million in Regina.

On the STC closure, it is sad that a large government subsidized company-losing money since the 1970s-has been reduced to shedding routes, often transporting 3-4 passengers per bus and squeezing out competitors by moving into the rural courier market.

Where there is need it will be filled and within days expect competitive carriers to be in the rural courier business.

With concern about 300 cancer patients whose only transportation is STC, this seems more a business and policy case for medical shuttles that can be operated more efficiently than large empty buses running on established and under-used routes.

In coming weeks, many well intentioned people will complain and who can blame them? They are unhappy and no one likes less.

But if these tough measures work-using a timed sequence of difficult choices over the next two years to rebalance the economy-we will all get through this together with an improved investment climate, more jobs and better opportunities for the future.

For the anti-austerity movement none of that matters. And they will be on the streets. 


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