Monday, December 17, 2007

Sask. Party: Rainy Day Fund OK now that they are Government!

This is an indication of what can be expected of the Sask. Govt. Contradictions whenever it suits party aims. After strongly condemmning such a fund the Sask. government finally discovers it is useful after all. Van Mulligen is no doubt finding some satisfaction in railing against the Sask. Party for starting their own rainy day fund. I guess imitation is the sincerest form of flattery

Sask. Party government creating own rainy-day fund
Last Updated: Friday, December 14, 2007 | 12:07 PM CT
CBC News
The Saskatchewan Party has flip-flopped on the need for a "rainy day" fund to avoid falling into deficit.

Before the Nov. 7 election, the party criticized the former government for dipping into its Fiscal Stabilization Fund to balance its books.

On Thursday, the new Saskatchewan Party government said it will wind down the Fiscal Stabilization Fund as well as a second rainy-day account — the infrastructure fund.

It said it will also set up a new contingency fund, called the Growth and Financial Security Fund, that will be used to balance the budget.

"The reality is that in the wildly swinging income gyrations of the provincial economy, you need to be able to set aside funds in good years so that you can draw on them in poor years," Finance Minister Rod Gantefoer said.

"Well, duh," was the reaction of NDP finance critic Harry Van Mulligen, who as finance minister endured numerous attacks from the Saskatchewan Party over the merits of contingency funds. When the New Democrats were in power, the Saskatchewan Party said rainy-day funds were accounting tricks that masked the true state of the province's finances.

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Everyone in Saskatchewan realizes that a resource-based economy can be volatile, Van Mulligen said Thursday.

"I don't know what the term is for when you say one thing and do another — is it hypocritical?" he said.

Before the election, the Saskatchewan Party said that it would draw down the NDP's fund and once it was gone, it would return to "transparent" bookkeeping.

Instead, the new legislation will make this fund a permanent fixture in the new government.

The government says it's proceeding to make it law to have a balanced budget every year, instead of the current requirement to balance the books over the four-year mandate.

Under the government's proposed fiscal management law, half of any future surpluses will go into the new rainy-day fund. The other half will go toward paying down the provincial debt.

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