The early reviews from most media outlets is that the budget was a disappointment. Noting the large deficit one wag wrote the Alberta is going for broke. While Alberta isn’t really going broke there’s no doubt that Budget 2010 will be a surprise to fiscal hawks who thought the government was signaling that spending would be held in check. Instead it’s going up almost 6%.
The government is obviously reading the polls which indicate that healthcare is the number one concern of Albertans. Alberta Health Services was the biggest beneficiary of the budget. Not only did they get the news that the government would pay off their $800 million deficit, they will also receive spending increases of 6% in three successive years.
The revenue side of the budget will get a ton of scrutiny as the government is forecasting a surplus just three years from now, even with the big spending increases. They are basing this on a forecast for significant increases in royalties from oil and gas, especially from the oil sands. That however is a mugs game as the government found out last year when they were billions out on their revenue projections after oil and gas prices unexpectedly cratered.
It’s hard to say how this will all shake out. If the polling numbers on healthcare are correct, and if Albertans believe the issue is money, and if they don’t blanch at the deficit then the government may come through this okay. But amongst fiscal hawks the verdict is in, and the government got it completely wrong.
This should be a great opportunity then for Danielle Smith, the leader of the Wildrose Alliance. The trouble for her is that it might be hard to knock the extra money for healthcare. It seems the inevitable debate over whether our healthcare system is actually sustainable has been delayed once again.
But this is just the beginning. Even if most of the media coverage so far has been negative the government and opposition still have a chance to sell the public on their version of the truth.
