We’re one week into the New Brunswick provincial election and we’re already in the hole.
Debt. New Brunswick’s got a lot of it and it’s limiting our choices regarding what we want New Brunswick to become over the next four years. According to the Finance Department’s pre-election fiscal outlook, the province’s debt will climb to $12.2 billion in 2015. It’s an amount few of us can visualize, other than to know that’s a heck of a lot of money.
One way to break it down is to divvy out the debt across the New Brunswick population. That figure, the net debt per capita, illustrates the size of the debt in relation to each of us. Right now the net debt per capita sits at about $15,500 and it’s on the rise. By this time next year it will be just over $16,000. You got an extra $16,000 kicking around? I didn’t think so. How about an extra $64,000? That’s what a family of four will owe. Happy New Year to you too.
With that much debt hanging over us it limits our choices – unless we radically change the way we do things in New Brunswick. How do we do that? Well, to start we need to limit our spending and we desperately need to make more money. That’s pretty basic and it’s what all of us do when our credit card bills or bank credit lines get too large. Cut expenses and raise income. However that just solves our immediate problem – lowering our existing debt.
That shouldn’t satisfy any of us. Getting out of debt is one thing – staying out of debt is an entirely different conversation. To do that we need to build a province where people can generate more wealth for themselves and enjoy life. I’m a big fan of enjoying life. Why else live in New Brunswick – out here on the edge of Canada – if you can’t have fun? Might as well pack up and move somewhere with more services, more money and more stuff to do. Which is, of course, what so many New Brunswickers are already doing.
The above infographic is our cheeky attempt to start thinking about New Brunswick’s money problems in a different way. Laptops in schools and healthy living programs are two ideas we hear a lot about when we travel around New Brunswick but neither is ever at the top of anyone’s list of things we need. They always end up in the hodgepodge of items politicians like to label ‘wants’, which in New Brunswick is code for ‘we can’t afford it’. That’s the debt talking, it limits our options.
However, relative to the net debt, the cost of these items is small and both have the potential to lower our costs in health care and education – the two largest items in the provincial budget. Sounds great but until we’ve got the debt under control, we can’t begin to talk about new investments.
There are examples for us to follow. Over a three-year period in the mid-1980s New Zealand’s Labour government radically changed the country’s economic structure under the direction of Prime Minister David Lange and Finance Minister Roger Douglas. Faced with a staggering public debt, the result of years of government intervention in the economy, Lange and Douglas moved quickly to reduce the size of the state, by instituting deep reforms to the welfare system, reducing the civil service and ending many economic controls. A decade later, Estonia followed a similar route. In 1991 it emerged from the Soviet era with a crippling debt and a society out of step with the modern world. In less than two years Prime Minister Mart Laar and his government introduce a flat income-tax, free trade, its own currency and privatization.
That’s the kind of conversation we need to have over the next month and in the years ahead. We need fresh new ideas to get out us out from under our $12 billion debt and to generate more personal wealth.
We owe it to New Brunswick.
Lisa Hrabluk is the founder of Wicked Ideas. Follow her on Twitter @lisahrabluk.
Wicked Ideas’ 2014 election series is financially supported, in part, by the New Brunswick Business Council. Wicked Ideas retains full editorial control of all content and members of the New Brunswick Business Council are not consulted or informed of Wicked Ideas’ content prior to publication.