Budgets in the time of the fiscal cholera

In my column tomorrow I salute the government for getting the growth of health care costs down to 3% year over year in the 2011-2012 budget but I was thinking while doing the dishes tonight – isn’t there some kind of two year public sector wage freeze in place?  And we still have a 3% increase in health care spending and a 2% increase in overall spending?    Labour costs are usually around 60%-70% of public service costs -so with wage freeze on you might be able to argue that this budget – other than the cut in asphalt was not much tougher than the last budget.  Hmmm.  Can anyone confirm the two year wage freeze?

2 thoughts on “Budgets in the time of the fiscal cholera

  1. There is a two year wage freeze as far as I know, but i also know that doctors aren’t currently covered by the freeze. They agreed to salary increases with the last government two years ago, just before it froze public wages. The government originally told the doctors they could have the freeze at the end of their contract (which was for three or four years); though the doctors were agreeable to this, the government then reneged and told them they had to take it up front. A fracas ensued and several doctors threatened to leave the province over this and other perceived mismanaged files in the system. Eventually, after a change in health minister, the doctors took their freeze at the end of the agreement. I hope that helps.

  2. Do nurses have a wage freeze? What about other staff? What are the administration trends.

    In rummaging through the ordinary accounts looking for something else, I noticed just how significant the health costs are.

    In nominal dollars, health costs doubled between 2000 and foretasted 2011. Using my own deflation calculations (based on statistics Can inflation for each year), I come up with a 66% real increase in costs. (I could post the graphs if anyone is interested.)

    Are we getting 66% more service from the health sector (have the number of procedures increased drastically? The number of drugs covered increased? The wait times decreased substantially ?). Anecdotal information would indicate there has not been any significant progress in any of these areas. So where is the money going? Has anyone studied this area in any great depth?

    PS. Don’t be too quick to blame the consolidation. Though it didn’t seem to contribute much to savings to aggregate health spend, it also didn’t seem contribute much to costs… seems kind-of a wash so far – from a rough view of course.)

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