PBO's report suggests feds not following through on budget promise
Too many generals and not enough soldiers?
That seems to be the scenario Parliamentary Budget Officer Kevin Page sees in his office's analysis of federal spending for the first half of the current fiscal year.
The recent report noted that the Conservative government's spending cuts have been aimed primarily at front-line services while administrative spending is heading in the opposite direction. In reviewing federal spending from April to September 2012, the PBO found that direct program spending was slashed by four per cent, largely on the strength of close to 11,000 civil service jobs that were eliminated during the first half of the year.
But the report said spending on internal services, which includes such areas as communications, information technology, human resources and financial management, climbed by eight per cent to $5.3 billion.
That goes against the words of Finance Minister Jim Flaherty, who pledged last year that austerity measures would be primarily aimed at administrative and support costs so as not to hinder front-line services to the public. The budget initially said 70 per cent of austerity cuts would be internal, but that doesn't seem to be the case.
The PBO report said, "The continued increase in Internal Services expenditure suggests that spending growth on overhead has not been curtailed, as suggested in Budgets 2010 through 2012, and the focus of restraint exercises has instead been on reduced spending to front-line services."
That's not to say there shouldn't have been cuts to front-line civil service jobs. When financial belt-tightening needs to take place, it's usually best if the cuts are spread around. But if the trimming is focused too heavily on front-line programs and workers, it directly affects the Canadians who rely on those government services, and the ripple effect can make life difficult for countless citizens.
Making matters worse is the fact that the internal costs for these government departments have actually increased in spite of the so-called "austerity" effort.
A spokesman for Treasury Board president Tony Clement, who is overseeing the government's austerity effort, questioned the PBO report, noting it "underestimates the savings from operational efficiencies because it does not include all back-office savings measures."
If that's the case, it could be because Page's office has had an ongoing difficult time obtaining the information it has routinely sought from federal departments in order to prepare its calculations. If, however, the PBO report is correct in its assessment, the federal government needs to take a more judicious eye to its financial trimming. It could start with items such as International Development Minister Julian Fantino's $25,000 meet-and-greet for members of the Canadian International Development Agency, which came to light last week.
Perhaps the federal government needs some lessons on the definition of "austerity."
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