Changing the budget process
I have been a firm believer for many years that P.E.I. is in an incredible position to change the way they do their budget. I made this suggestion to Pat Mella when she was finance minister many years ago, and there never was an answer as to why it couldn’t be done. I have sent the following in to the Budget Consultation, and since I do have the opportunity to present it live, would like to make my opinion public.
1. Balancing the budget using past budgets which are not balanced as a foundation is doomed to failure. My suggestion is both innovative and drastic, and yet would not only work in reducing spending, it would lay a new generation of balanced budgets for years to come, without sacrificing current programs. Our province is small enough to make this work, as well as set an example for all of Canada to follow. We need a zero based budget.
Every department, even more, any agency and part of the government that receives money from the province needs to write a budget, not based on percentages from last year, but needs to write a budget justifying every dollar. It is neither as complicated or as overwhelming as it sounds, and would require several years to complete, but the results would begin immediately. Every small department writes their own budget and moved it upwards to their department above, who reviews and puts them together.
Those smaller budgets could be made public for input, and the overview would not cost millions for accountants and lawyers, the people who are putting the money into the system would provide oversight. It would be a large project and would be thinking outside the box. At the same time it would provide a foundation for budgets of the future, and you, as Finance Minister would know, for the first time in generations, where the public’s money is going.
2. With the zero based budget completed, I strongly feel that spending would be reduced on its own without sacrificing any legitimate programs, in fact, with less (preferably none) money going into undefined and illegitimate places, spending could comfortably be increased in certain areas for the first time in years.
3. Spending has traditionally been based on last year’s spending. Cuts or increases have been a percentage of last year’s spending. So any item that has been wasteful or careless is not caught up in the process, it has just been increased or decreased as part of a larger process. With the zero based budget, careless and wasteful spending would be found out, and not included in the new budget, which would naturally leave excess funds, so no increase in taxes would be required to balance a budget.
The absolute worst that could happen, is to provide proof absolute that there is no wasteful spending, and providing a foundation for required tax increases.