Friday, January 23, 2009

Principle of budget confidence violated by PMO official?

With all the focus on the big deficit numbers that were put out yesterday by an anonymous Conservative aide, the larger point was missed. Such budget disclosures are "unheard" of in Finance budgeting.
In an unprecedented move, an official from the Prime Minister's Office disclosed Thursday the federal government would post a cumulative deficit of $64-billion over the next two fiscal years -- five days before the release of its own budget.

The Conservative official, who spoke on the condition of anonymity in a briefing with reporters that had no Department of Finance representatives present, said the government would return to surplus in 2014-15, or a half-decade after the next fiscal year.

Ottawa will record a $34-billion deficit in the 2009-10 fiscal year, followed by a $30-billion shortfall in the next 12-month period.
The circulation of the deficit numbers is being justified by the government as a response to other information seen this week, namely from the Parliamentary Budget Officer and Dale Orr, both of whom had their own projections of the likely deficit for the government in the coming year. Scott Brison makes the point as to what the PMO has been up to:
Scott Brison, a Liberal Party economic critic, accused the government of leaking one of the most important parts of the budget "for political reasons."

He added the unattributed briefing represented "a tremendous slap in the face to Finance," adding: "The government has made a laughingstock of itself."

A Finance spokesman said Thursday night it is department policy not to discuss budget items until the document is released. (emphasis added)
There's more in the report from other analysts remarking on the spectacle and how the discussion of deficit numbers "...could be market moving if it was beyond the scope of what economists and markets expect. This time, however, the figure was in line with expectations."

Looks like the drive to control the media story line took over at what could have been a great cost. From the Globe:
The deliberate leaking of fiscal projections -- just five days before the Jan. 27 budget -- is unprecedented, Finance watchers say. The move reflects the minority Conservative government's desire to get unfavourable coverage out of the way before next week.
Priorities, priorities. Conservative political fortunes above all else, even budget secrecy and the possible impact on the market.

Why did the Prime Minister permit such disseminations?