For the past number of years Manitoba Progressive Conservatives have been warning Manitobans that the out of control spending of the NDP government ultimately comes with a price. Manitoba families know, from their own household finances, that you can only spend more than you make for so and so long until it catches up with you.
On Monday of this week, the endless NDP deficits finally caught up with them as Moody’s Investors Service, the company that helps establish the credit worthiness of governments, downgraded the economic outlook for Manitoba from stable to negative. This will result in the rate of interest that the province pays on its debt going up. And that will mean there is less money for things like education, healthcare and other services Manitobans depend upon.
It is the first time in as long as most people can remember that Manitoba’s credit has been downgraded. And it comes despite the fact that the NDP government increased the PST last year and is now taking an additional $300 million from the pockets of Manitobans. All of this seemed lost on the NDP government this week who dismissed the additional interest that Manitoba would now have to pay as a result of the outlook downgrade from Moody’s.
A careful reading of the Moody’s analysis and downgrade shows the real problem however and it is a problem that Manitobans have seen for some time. The credit rating agency simply doesn’t believe the NDP government will be able to balance the budget by 2016-17 as it promised it would do. It see’s little evidence that the Selinger government has the ability to control its spending despite the fact it is collecting hundreds of millions dollars in new taxes.
In short, Moody’s doesn’t believe the NDP government. That is a conclusion that many Manitobans came to a long time ago but it is worth a second look when international credit agencies are taking notice and coming to the same conclusion.
This lack of trust in the NDP government is now coming with a real price tag attached to it. The cost is a higher interest rate and the threat of yet a further downgrade and even higher interest rates if the trend is not reversed. And it’s a cost that was entirely predictable. Massive NDP deficit after massive NDP deficit guaranteed it. And most disappointing of all, the downgrade was not only predictable it was entirely avoidable.
The NDP are once again vowing to try to use taxpayer’s dollars efficiently. Many Manitobans have long since lost faith they have the ability to do that. It’s a lack of faith that has now gone international.
