Archive for April 17th, 2012

NDP debt growing faster than economy

- April 17th, 2012

The Government of Manitoba’s debt continues to grow in leaps and bounds after the NDP tabled its fourth straight deficit budget Tuesday.
And as percentage of the economy, Manitoba’s debt is starting to become a real problem.
Debt went up in almost every category in the budget, including the overall debt which now stands at a staggering $27.6 billion. That’s up from $18 billion in 2007 and it’s been climbing every year.
Capital investment debt — money the province borrows for capital projects like the new Bombers football stadium — is growing at the fastest pace. It now stands at $3.75 billion. That’s more than triple what it was in 2007 when it was just over $1 billion.
And that money will have to be repaid one day.
Total summary borrowings, guarantees and obligations — which excludes Manitoba Hydro debt — is also up. It’s pegged at $20.7 billion, up from $19.6 billion last year. It was $14.9 billion just four years ago.
Borrowing for general government programs has jumped $1.5 billion since 2007 when it was $6.5 billion. It’s now just over $8 billion. That’s money the government borrows to help pay for everyday operations, including funding for bureaucracies.
The summary net debt, which includes assets such as the pension fund and other financial assets, stood at $16.3 billion. That’s way up from last year when it was $14.8 billion. Summary net debt was $10.5 billion in 2007.
So no matter what category of debt you look at, it’s all up — way up.
The NDP says the province can afford it because as a percentage of a growing economy, it’s manageable.
But here’s the worst part. As a percentage of the Gross Domestic Product, Manitoba’s debt has been growing steadily over the past five years.
Net debt as a percentage of GDP is up for the fifth year in a row. It now stands at 27.4%, up from 21.6% in 2007.
At some point, this government is going to have to do something about it’s out-of-control propensity to borrow.
This has to stop.