Wednesday, April 26, 2000
The Halifax Herald Limited

Hamm’s moment of truth

By Brian Lee Crowley

NOVA SCOTIA Premier John Hamm is a political rarity: an honourable man who genuinely wants to do the right thing. That’s good. He is also a political neophyte at a moment when we need bold leadership to reshape the public sector. That’s bad.

People trust the premier. But such political capital is a volatile commodity. Too many missteps and people begin to lose faith. Then they turn hostile. Premier Hamm’s government has not yet reached the stage of terminal political decline. On the other hand, unless it starts getting a grip quite soon, events risk spinning out of control.

The confrontation with teachers and the school system touched off by Finance Minister Neil LeBlanc’s budget is the latest warning signal. The government’s political opponents could not have invented a strategy more likely to harm the government’s credibility on public sector reform. After having sent mixed messages for months about how serious the province’s fiscal situation really is, the government finally tables a budget that promises much, but pushes most of the hard decisions off until next year. What little has been done lets the government’s opponents portray its top priority as attacking the interests of the province’s children. That’s a battle the government cannot win.

It doesn’t have to be this way. To fix it, however, the government must decide, unambiguously, that fixing our finances comes first. Our accumulated debt now costs us $1 billion a year in interest payments. Further borrowing doesn’t protect needed public programs – it undermines them. And because the debt is merely deferred taxes, the fear of future tax rises helps to suppress the economic growth that alone will allow us to create jobs and pay off our debts.

But fiscal sustainability means tackling important interest groups, like public sector unions and businesses that have grown fat on taxpayers’ money. It also requires careful planning. People will support a clear program, when a credible leader like the premier explains why it will make things better in the long run. But it must be done right.

The lessons from places that have reformed government and cut costs are clear. It can be done and it can be politically popular. But here’s what political leaders in places like Britain, the U.S. and New Zealand learned from their experiences.

First, if you’re going to have reform, move decisively, and on a broad front. Otherwise, the interest groups will mobilize and drag you down. Don’t do education today, health care in six months and liquor privatization in two years. Seize the day. Make it clear that everybody is going to feel a small amount of pain, and that everyone will be expected to play their part. That gains you allies, as people who have done their part become allies of the government in resisting special pleading by powerful groups. This appeals to people’s sense of fairness. People will make sacrifices when the benefits are clear and no one is exempt.

Momentum is vital. Betray uncertainty or a lack of confidence, and your opponents will seize on it and reform will fail. The costs of public sector reform come right up front, and are highly concentrated and visible. The benefits come later, and are often indirect and widely dispersed, such as stronger economic growth. Move too slowly and people only see the costs of reform before the next election. This government is nine months into its mandate and can’t even decide what it really wants or how to get there. The apologists for the status quo know exactly what they want.

The final lesson is that credibility is everything. If people doubt that the government means what it says, or the government is inconsistent in its message, opponents will devote massive efforts to trying to get the government to change its mind. When a government is rock solid in its commitment to reform, people put their efforts into adjusting to the new reality, not into protesting, media stunts and lobbying. That’s why continued grants to business at a time when the government is raising taxes, cutting education and clawing back money earmarked for charities sends absolutely the wrong signal.

The government doesn’t have four years to get this right. At most, it has got a few more months. Then its course will be set. And if it backs away from any of what it has started, it will never recover what little momentum it has. You have no more time, Premier Hamm. What do you want to be remembered for?

Brian Lee Crowley is president of the Atlantic Institute for Market Studies, a public policy think-tank in Halifax.
Email:BrianLeeCrowley@aims.ca

 

Wednesday, April 26, 2000
The Halifax Herald Limited

Wednesday, April 26, 2000
The Halifax Herald Limited

Hamm’s moment of truth

By Brian Lee Crowley

NOVA SCOTIA Premier John Hamm is a political rarity: an honourable man who genuinely wants to do the right thing. That’s good. He is also a political neophyte at a moment when we need bold leadership to reshape the public sector. That’s bad.

People trust the premier. But such political capital is a volatile commodity. Too many missteps and people begin to lose faith. Then they turn hostile. Premier Hamm’s government has not yet reached the stage of terminal political decline. On the other hand, unless it starts getting a grip quite soon, events risk spinning out of control.

The confrontation with teachers and the school system touched off by Finance Minister Neil LeBlanc’s budget is the latest warning signal. The government’s political opponents could not have invented a strategy more likely to harm the government’s credibility on public sector reform. After having sent mixed messages for months about how serious the province’s fiscal situation really is, the government finally tables a budget that promises much, but pushes most of the hard decisions off until next year. What little has been done lets the government’s opponents portray its top priority as attacking the interests of the province’s children. That’s a battle the government cannot win.

It doesn’t have to be this way. To fix it, however, the government must decide, unambiguously, that fixing our finances comes first. Our accumulated debt now costs us $1 billion a year in interest payments. Further borrowing doesn’t protect needed public programs – it undermines them. And because the debt is merely deferred taxes, the fear of future tax rises helps to suppress the economic growth that alone will allow us to create jobs and pay off our debts.

But fiscal sustainability means tackling important interest groups, like public sector unions and businesses that have grown fat on taxpayers’ money. It also requires careful planning. People will support a clear program, when a credible leader like the premier explains why it will make things better in the long run. But it must be done right.

The lessons from places that have reformed government and cut costs are clear. It can be done and it can be politically popular. But here’s what political leaders in places like Britain, the U.S. and New Zealand learned from their experiences.

First, if you’re going to have reform, move decisively, and on a broad front. Otherwise, the interest groups will mobilize and drag you down. Don’t do education today, health care in six months and liquor privatization in two years. Seize the day. Make it clear that everybody is going to feel a small amount of pain, and that everyone will be expected to play their part. That gains you allies, as people who have done their part become allies of the government in resisting special pleading by powerful groups. This appeals to people’s sense of fairness. People will make sacrifices when the benefits are clear and no one is exempt.

Momentum is vital. Betray uncertainty or a lack of confidence, and your opponents will seize on it and reform will fail. The costs of public sector reform come right up front, and are highly concentrated and visible. The benefits come later, and are often indirect and widely dispersed, such as stronger economic growth. Move too slowly and people only see the costs of reform before the next election. This government is nine months into its mandate and can’t even decide what it really wants or how to get there. The apologists for the status quo know exactly what they want.

The final lesson is that credibility is everything. If people doubt that the government means what it says, or the government is inconsistent in its message, opponents will devote massive efforts to trying to get the government to change its mind. When a government is rock solid in its commitment to reform, people put their efforts into adjusting to the new reality, not into protesting, media stunts and lobbying. That’s why continued grants to business at a time when the government is raising taxes, cutting education and clawing back money earmarked for charities sends absolutely the wrong signal.

The government doesn’t have four years to get this right. At most, it has got a few more months. Then its course will be set. And if it backs away from any of what it has started, it will never recover what little momentum it has. You have no more time, Premier Hamm. What do you want to be remembered for?

Brian Lee Crowley is president of the Atlantic Institute for Market Studies, a public policy think-tank in Halifax.
Email:BrianLeeCrowley@aims.ca

 

By Brian Lee Crowley

NOVA SCOTIA Premier John Hamm is a political rarity: an honourable man who genuinely wants to do the right thing. That’s good. He is also a political neophyte at a moment when we need bold leadership to reshape the public sector. That’s bad.

People trust the premier. But such political capital is a volatile commodity. Too many missteps and people begin to lose faith. Then they turn hostile. Premier Hamm’s government has not yet reached the stage of terminal political decline. On the other hand, unless it starts getting a grip quite soon, events risk spinning out of control.

The confrontation with teachers and the school system touched off by Finance Minister Neil LeBlanc’s budget is the latest warning signal. The government’s political opponents could not have invented a strategy more likely to harm the government’s credibility on public sector reform. After having sent mixed messages for months about how serious the province’s fiscal situation really is, the government finally tables a budget that promises much, but pushes most of the hard decisions off until next year. What little has been done lets the government’s opponents portray its top priority as attacking the interests of the province’s children. That’s a battle the government cannot win.

It doesn’t have to be this way. To fix it, however, the government must decide, unambiguously, that fixing our finances comes first. Our accumulated debt now costs us $1 billion a year in interest payments. Further borrowing doesn’t protect needed public programs – it undermines them. And because the debt is merely deferred taxes, the fear of future tax rises helps to suppress the economic growth that alone will allow us to create jobs and pay off our debts.

But fiscal sustainability means tackling important interest groups, like public sector unions and businesses that have grown fat on taxpayers’ money. It also requires careful planning. People will support a clear program, when a credible leader like the premier explains why it will make things better in the long run. But it must be done right.

The lessons from places that have reformed government and cut costs are clear. It can be done and it can be politically popular. But here’s what political leaders in places like Britain, the U.S. and New Zealand learned from their experiences.

First, if you’re going to have reform, move decisively, and on a broad front. Otherwise, the interest groups will mobilize and drag you down. Don’t do education today, health care in six months and liquor privatization in two years. Seize the day. Make it clear that everybody is going to feel a small amount of pain, and that everyone will be expected to play their part. That gains you allies, as people who have done their part become allies of the government in resisting special pleading by powerful groups. This appeals to people’s sense of fairness. People will make sacrifices when the benefits are clear and no one is exempt.

Momentum is vital. Betray uncertainty or a lack of confidence, and your opponents will seize on it and reform will fail. The costs of public sector reform come right up front, and are highly concentrated and visible. The benefits come later, and are often indirect and widely dispersed, such as stronger economic growth. Move too slowly and people only see the costs of reform before the next election. This government is nine months into its mandate and can’t even decide what it really wants or how to get there. The apologists for the status quo know exactly what they want.

The final lesson is that credibility is everything. If people doubt that the government means what it says, or the government is inconsistent in its message, opponents will devote massive efforts to trying to get the government to change its mind. When a government is rock solid in its commitment to reform, people put their efforts into adjusting to the new reality, not into protesting, media stunts and lobbying. That’s why continued grants to business at a time when the government is raising taxes, cutting education and clawing back money earmarked for charities sends absolutely the wrong signal.

The government doesn’t have four years to get this right. At most, it has got a few more months. Then its course will be set. And if it backs away from any of what it has started, it will never recover what little momentum it has. You have no more time, Premier Hamm. What do you want to be remembered for?

Brian Lee Crowley is president of the Atlantic Institute for Market Studies, a public policy think-tank in Halifax.
Email:BrianLeeCrowley@aims.ca