6/7/17

Ontario is not sinking into deficit: Better public services can be won

The Financial Accountability Office (FAO) predicts significant deficits over the next several years - despite also predicting significant economic growth. Using the government's accounting method, the FAO is predicting budget deficits of $0.5 billion this year, increasing to $3.6 billion in 2021-22. 

If the FAO is right then we do have a problem in terms of building our campaigns for better funding. Deficits will be used to clobber popular expectations for improved public services.  Already the right has taken up the FAO report to spread the deficit alarm.  

While the FAO does make some useful other points, its conclusions about the deficit are likely off base.



Revenues and Expenditures: The FAO expects tax revenue to grow 3.9% on average over the next five years, slightly below their expectations for nominal economic growth.  This is significantly better than their forecast for expenditure growth of 3.3% (which, notably, is a little below the underlying cost and demographic pressures identified of 3.6%). 

However the FAO also expects much slower growth for the second largest source of revenue, federal transfers -- 1.9% growth. 

As a result, the FAO places revenue growth at a more moderate 3.3% average over the five years -- exactly the same as their estimate for average expenditure growth. 

That sounds odd as the they expect the deficit to grow from $600 million this year (2017/18) to $3.6 billion by 2021-22.  

The base year problem: A big part of the explanation is that the base year for their five year forecast is not this year but last year, 2016/17, and they put the deficit for that year at $2.8 billion. 

So an increase to a $3.6 billion deficit after five years is in fact a modest increase in the deficit - - an increase of $800 million by 2021 -2022, or just under 0.5% of total expenditures.  On average, the deficit is expected to increase by less than 0.1% of expenditures each year for five years. 

In other words, there will be a big deficit in five years because there already is a big deficit. 

Is there really a big deficit in the base year?  The forecast deficit of $2.8 billion in the  base year of 2016/17 is itself quite odd.  It is well over a billion dollars higher than the Ministry of Finance estimated in the 2017/18 Budget.  

Key here is that the FAO estimates $1.2 billion less revenue for 2016/7 than the 2017/18 Budget estimated.  This is entirely due to a lower estimate of tax revenue by the FAO.

However, the 2017/18 Budget came out a month after the 2016/17 fiscal year ended. The finance ministry should have a pretty good estimate of revenue from the previous year one month into the next fiscal year.  They will, after all, finalize the books for that year in just a few months.  

Indeed, if past practice is any guide, this government almost always starts out with a very pessimistic assessment of the state of the deficit and then achieves a lower deficit.

Like a cautious middle manager, the government almost always initially overestimates the deficit and then in successive announcements beats its target and reports a lower deficit. Last year, for example, when they finalized the books for 2015/16 in the fall of 2016, they recognized that revenue was actually $2 billion higher than they had estimated in the 2016/17 Budget.

So the FAO forecast of a $2.8 billion deficit in the base year of 2016/17 is suspect. If past experience is any guide, it is more likely lower than the $1.5 billion the government has estimated rather than higher.  

What's the impact if the deficit in the base year is overestimated?  If the FAO's deficit in the base year is an overestimate, then what of their forecasts for the following five years? Well, Ontario will start from a much better position to avoid future deficits.

Notably, the FAO's predicted five year dollar growth in the deficit from $2.8 billion to $3.6 billion is based on the idea that a sizable deficit exists -- that expenditures in the base year were $2.8  billion more than revenues.  

Much of the predicted growth in the deficit is not because revenues are predicted to increase at a slower percentage rate than expenditures, but because the two are predicted to increase at the same percentage.     

As a result of this, the gap between the larger amount (expenditures) and the smaller (revenues) grows in dollar terms (although not in percentage terms). 

Over $500 million of the FAO's predicted $800 million increase in the deficit over five years is simply the result of the fact that both total expenditure and total revenue are supposed to increase at exactly the same percentage rate and expenditures are supposedly starting out at much higher dollar amount than revenues. 

But the math changes and the growth of the deficit is much less if the existing deficit is not as big as supposed.

(It is not clear where the FAO's other $300 million predicted growth in the deficit comes from -- rounding differences perhaps.)

The FAO Deficit Track Record: Notably, the FAO forecasting record has not been great. Well into the 2015/16 fiscal year (November 2015), they estimated the deficit for that year as between $6.8 billion and $8.5 billion.  The FAO now recognizes the deficit for that year as $3.5 billion, i.e. $3.3 billion to $5 billion less than they predicted.   

Even after 2015/16 ended the FAO was still way off.  Last year’s FAO spring economic and fiscal report (dated May 18, 2016) concluded the 2015/16 deficit would be $2.2 billion more than they now admit.  

In other words, a month and a half after the fiscal year ended, the FAO forecast the deficit as 63% higher than it was. 

If the FAO was off by that much predicting what happened the previous year, how much might they be off forecasting five years in the future?  Particularly as much of the FAO's predicted deficit five years in the future is based on the questionable notion that there already is a big deficit. 

Federal Transfers: On another related point, a big part of their modest revenue forecast is very modest  growth in federal transfers.  Part of this makes sense -- as Ontario's economy improves, federal equalization payments to Ontario will decline.  

But it is certainly worth considering that federal transfers for future years may turn out to be greater than currently announced.  The Feds don't get a lot of political credit for promising money years in the future.  They get more credit for cash that will come shortly. The federal election in 2019 may also shake some more federal cash loose (for example we won  a big increase in federal health care money from the Conservatives in the 2011 election).   As a result, the FAO's approach may inherently tend to underestimate future federal transfers.  

If the future is like the past, we will see an improved fiscal situation than predicted in the provincial Budget when the books are finalized for 2016-17 -- and not a worse situation, as predicted by the FAO.  

If that is the case, we will be in a much better situation to face the years ahead than the FAO forecasts -- even if revenue percentage increases simply match expenditure increases, as the FAO predicts

One last point: any long term forecast is dodgy, and the further into the future, the more dodgy.  Economic crisis, or revenue bonanza are hard to predict years in advance. But it is in the longer term that the FAO is more pessimistic. In the shorter term their forecast is much more optimistic.   

In  the immediate future, the FAO estimates very significant revenue growth for 2017/18 -- growth of $8.2 billion or 6.3%. That is very similar to the increase estimated by the Ministry of Finance for 2017/18 and is far above the FAO's five year forecast of only 3.3% annual revenue growth. 

This also provides some reason to think there is a little more gold to come, this year at least. 

Economic crisis will come at some point and create another crisis that will be used by our rulers to undermine public services.  

Good prospects: But barring economic crisis, discount the deficit doomsayers (they have been getting it wrong for years) and don't be discouraged. 

We remain in a good position to win better public services -- just as we did last year when the FAO (and the government) grossly overestimated the deficit.  

5/16/17

Hospital funding increase less than last year's

Ontario revenue and  expense projections 2017/18


In  the lead up to the Budget, the government crowed  that they had heard the public and would improve funding for hospitals. However, based on government  announcements, they actually plan to lower the hospital funding increase this year.  

They state they will increase hospital funding $518 million, a 3% increase.  But, on closer inspection, the funding increase announced for last year was significantly higher.


In the 2016 Budget, Ontario announced that it would increase hospital funding $345 million -- about a 2% increase.  Subsequently, the government announced another $140.3 million for hospital funding in the Fall Economic Statement – bringing the total increase to $485 million.   That is, of course, already quite close to the much ballyhooed hospital funding increase of $518 million for 2017/18. 

But it looks very much like the actual hospital funding increase in 2016/17 was higher than $485 million – higher in fact than the $518 million increase announced for 2017/18.

A little after announcing the $140.3 million hospital funding increase, the province, in its 3rd quarter report, announced an investment of $95.4 million to support additional capacity for stem cell transplants in Ontario.  Sunnybrook hospital will become the second hospital in the Greater Toronto Area -- along with Princess Margaret hospital-- to provide a full range of Complex Malignant Haematology, including stem cell transplants.  Apparently a very small portion of this work goes outside of the country, but most of this work is done in Ontario hospitals. 

Now, in the new Budget, the government has raised their estimate of the in-year health care spending increase from $348 million (in their 3rd quarter report) to $483 million – i.e. another $135 million increase.  The Budget describes the $483 million health care in-year increase as “primarily due to additional investments in hospitals to support the needs of patients and reduce wait times, and funding to support additional stem cell transplants in Ontario.”

So, it is likely that at least half ($242 million) of that $483 million in-year increase went to hospitals.  In total that would mean that hospitals got, at least, a $587 million increase last fiscal year ($345 M + $242 M = $587 M).

That would be $69 million more than the announced increase for 2017-18 – 13% more.   

The announced hospital funding increase for this year (3.1%) is in fact exactly half of the percentage increase announced for all other non-Ministry of Health programs (6.2%).
  
This all suggests that more funding has got to be announced over the course of this fiscal year if they are going to keep crisis from the door - -just like last year.

Premier Wynne told the media shortly before the Budget that she had heard the complaints about hospital funding "loudly and clearly", that she knew hospitals needed her support and  that  help would be coming. 

On Budget day, however, we got an announcement of a smaller increase than the announced increases for last year and (as discussed last week) further confirmation that they plan to decrease hospital capital funding for new hospital beds and facilities. 

Apparently, we will have to speak more loudly and clearly to be properly heard. 

P.S. - - the good news?  Hospitals in low population growth communities around the province  are beginning to report funding increases at around 2% of ministry funding for the hospital.  This tends to confirm the suggestion in the Budget that all hospitals will get at least a 2% increase in ministry funding. That is better than has been the case.  The confirmation of at least that level of funding early in the fiscal year (which began April 1) provides some basis for supporters of public hospitals to build on as the year unfolds. 

5/3/17

More spending on new hospitals and new beds? Nope



Hospital funding:  There is something off about the provincial government's Budget claims on hospital capital funding (funding to build and renovate hospital beds and facilities).   

For what it is worth (which is not that much, given the long time frame the government cites), the province claims it will increase hospital capital spending over the next 10 years from $11 billion to $20 billion – or on average to about $2 billion per year.  But, this is just a notional increase from the previous announcement of future hospital capital spending. 

Moreover, even if we did take this as a serious promise and not just a wisp of smoke, the government's own reports shows they have actually funded hospital infrastructure about $3 billion a year over the 2011/12-2015/16 period.

So this “increase” is really a decrease from past actual spending. Even last year's (2016-17) hospital capital funding increase was reported in this Budget at $2.3 billion - i.e. about 15% more than they have announced, on average, for the next ten years.   

Last I heard, construction costs were going up, not down, so this latest announcement means  a slower pace of hospital faciilty construction and renovation. 

Even with higher spending on hospital capital funding in the past, the Auditor General complained in late 2016 that funding was billions of dollars behind what was needed. Unless there is a significant increase, things are going to get worse.


Funding for new hospitals

Nevertheless, it is good to see that the government is at least trying to take some political credit for growing hospital beds -- see for example yesterday's Toronto Star story on new hospital beds by clicking here.  That, at least, is a little diversion from the attacks on hospitals as appropriate service providers that have characterized this government in the past.  Community and labour campaigns in favour of hospital services can take some of the credit for that.   

The alleged increased level of hospital operating funding will be discussed in the next post.

Overall health care spending will decline as a percentage of total program spending by the province this year – despite all the claims by the government that it makes health a priority, that they have heard the demands for better care, and that they are providing a "booster shot" for health care.  

Total program spending is budgeted to increase 4.9% while health care funding is budgeted to increase 2.98%.  Program spending excluding health care is budgeted to increase from $71.3 billion to $75.7 billion -- a 6.2% increase.  So health care falls a full 3.2% behind the overall program spending increase of other ministries. 

A "Health Care Budget"?  This certainly doesn't look like health care was the winner in the funding battles.

The real winners in the Budget were Advanced Education and Skills Development, Community and Social Services, Infrastructure, and, as expected, electricity cost relief, and the environment and climate change. 

Hospital and long-term Care (LTC) funding will decline as a portion of total program spending, just as overall health care funding will decline as a portion of total program spending.

Long-Term Care:  “In 2017, an additional $58 million, representing a two-per-cent increase, will be invested in resident care.”  However $58 million is not 2% of total provincial LTC funding.  That would require roughly a $66 million increase (not even counting provincial social assistance and “other” provincial funding that ends up in LTC).    

This is likely 2% of the Nursing and Personal Care (NPC) envelop and, perhaps, the Program and Support Services (PSS) envelop, the two largest portions of provincial LTC funding.   

That increase will not allow for significant increases in staffing hours for either NPC or PSS hours.  The government's refusal to open new LTC beds when the relevant population (aged 85+) is growing very rapidly means that those who get into LTC require more and more care.  

So we are stuck with another year of no more time to care while residents need more and more care. 

The third LTC envelop funded by the province, raw food, will grow by 6% -- or $15 million. “The government will increase the food allowance by over six percent this year, or $15 million, to ensure that LTC homes can provide nutritious menus that are responsive to medical and ethno-cultural needs.”   Advantage Ontario (the new name for the not-for-profit long term care providers previously named OANHSS) called for a 3.9% increase to the raw food budget - -so they (like the for-profit providers) are thrilled with this increase. How this will play on industry profits is a good question.  


These two announcements amount to a $73 million increase – very roughly a 2.3% increase for those three envelopes overall. 


There is also another $10 million for the Behavioural Support program.  Some (but not all) of that will wind up supporting LTC.  The Province says it is working towards the goal of a Behavioural Support Ontario (BSO) resource in every long-term care home in Ontario.  Funding will also be provided to expand the “work already underway in the long-term care sector to improve access to training and supports for quality palliative and end-of-life care in long-term care homes.” They don’t put a dollar amount on this last item, so it is probably not much.

There was nothing in the Budget about new LTC beds and Advantage Ontario did not even mention it in their response (although they had made a big deal of this prior to the Budget).  The government continues to redevelop old beds.


Compared to other provinces, Ontario LTC funding relies on extraordinarily large private payments from residents for accommodation.  So this fourth envelop of funding is not so significantly affected by the Budget.


Home and Community Care: As per usual, the “Province is expanding home and community care programs, including home nursing, personal support and physiotherapy services, with an additional investment of $250 million this year.” 


These $250 million increases have gone on for some years, so there is not much reason to think that this will do much to remove the backlogs or stop the reductions in service to less ill patients than we have seen in the past several years. 


Ontario Drug Benefit Plan expansion:  “OHIP+” will be available to all children and youth under 25, regardless of family income. It will completely cover the cost of all medicines funded through the ODB Program. There will be no deductible and no co-payment. This should reduce the costs of employer-based drug plans. The government reports an annual cost of $465 million.


The Gold -- Government Revenue: Ontario nominal economic growth was a third higher than expected in 2016 (4.6% versus 3.4%).  The Province's tax revenue estimate for 2016/17 is up $3.2 billion more than the 2016 Budget and $1.2 billion more than the Fall Economic Statement. So, they now expect to end up with 3.5% more tax revenue than planned in the Budget. Unfortunately the government also revised its estimate of carbon allowance proceeds downwards by $500 million so the total overall increase for 2016/17 is up $2.6 billion over the 2016 Budget estimate overall, about 2% more than planned.

Similarly, the revenue estimate for 2017/18 is up $3.9 billion and up $3 billion for 2018/19 compared to the 2016 Budget estimate for those years. These are positive but not surprising changes, given better than expected real and nominal growth in 2016.  

Note however, the increase in expected revenue is entirely driven by greater than expected tax revenues – the other areas of government revenue (government business revenue, federal transfers, carbon allowance proceeds, and “other” non tax revenue) are generally dragging revenue expectations downwards over the next few years.

In total revenue grew 3.8% in 2016/17 (almost $5 billion) after bumper revenue growth of 8.3% (almost $10 billion) in 2015/16. 

The government hopes for significant increases in revenue in 2017/18 -- over 6%. Increased tax revenue and a one-off increase in “other” non-tax revenue are supposed to be the key factors in this growth. That level of revenue growth is important for their zero deficit goal. A pause in economic growth or nominal economic growth could create problems.   

But we may not have heard the full story on revenue for even 2016/17.  Last fall, the final accounting for 2015/16 in the Public Accounts  added a surprising $1.9 billion to revenue, significantly improving the books at the last moment. That would certainly improve future revenue prospects -- if it happens again.     

Net Debt as proportion of the economy falls for third year in a row: Progressive Conservatives, rightly fearing (from their conservative perspective) the potential for increased pressure for improved public programs, have begun to re-focus on the province's debt accrued over the years. With the deficit gone, that argument against public social programs is mortally wounded (although the PCs haven't quite given up all hope they can find some way to breath life into the deficit monster). 

However, even the new "debt" line of attack on public programs has been weakened. The province's net debt as  a percentage of GDP (see bottom of the chart below), the key measure of the province's ability to pay its debt, is now planned to be over 1.6% lower than its high in 2014/15 of 39.1%. More cuts in the debt to GDP ratio are quite possible. 





The Future: The government expends a fair bit of energy diverting attention to future health care funding increases.   They claim they are going to increase health care funding 4.7% in 2018/19 (see the funding numbers in the chart up top).  

That would be just in time for the election. 

It would also put health care funding increases closer to health care cost pressures, albeit  still below the level set by even conservative advisers. According to the Budget, this would also be more than double the increase other ministries would get, for a change.

In any case, for 2019/20 (after the election) they only promise a 3.1% health care funding increase. 

Hopefully, this is just an opening salvo. It would be a pity if the “booster shot” wore off after the election.

3/3/17

Cash give-aways haven't helped the Liberals so why double down?

The government has answered the question about who might benefit from the improved fiscal situation of the province.  At least in part.


The government's announcement that they will spend $2.5 billion over three years on hydro subsidies (an average of  $833.3 M per year) takes them further down a road they have already tried, without much to show for it.  

Premier Kathleen Wynne implicitly confirmed growing government revenue but cautioned that this latest cash give-away is putting them closer to falling back into deficit.  She stated:
"Thanks to a provincial economy that is leading all of Canada growth, we can make this change and stay on track for a balanced budget next year and the years to follow.  But it’s going to be a lot harder now and we’ll remain a lot closer to the line."
So far these sort of cash give-aways have accounted for the large majority of the new, in-year spending that has marked the tentative move away from government austerity that began last fall. 

The conclusion the government seems to have drawn from their huge hydro cash give-away in the fall (the "HST tax cut") is that it wasn't enough. 

So they have doubled down.

Well it's true that the previous cash give-away hasn't helped the government's polling numbers.

But will more cash give-aways help them any better? It's pretty easy to forget about something you are no longer paying. 

In contrast, it's hard to ignore mounting problems in your public services. 

New funding announcements aimed at simply maintaining public services amount to only a small fraction of the cash give-aways announced.  

As a result, public services are still starving on an austerity diet.

Wynne's comment, noted above, seems aimed at managing expectations that there are more spending announcements to come. But with an election just over a year away, a Budget in the offing, growing government revenue, and perhaps little to show for the cash give-aways, there probably is more to come.  

But surely no more tax cuts or cash give-aways. 

For his part, Patrick Brown now feels compelled to release Progressive Conservative (PC) hydro policy in the next few weeks. This is a change from the cloak of secrecy he has put up around PC policy, whatever it is. Previously the plan was to announce PC policy at their November convention. 

But there is no sign yet that they will announce anything early about their health care policy.   Who knows what they might do -- hospital cuts? more austerity? Exactly what Brown stands for is as clear as mud. 

2/22/17

Ontario government spending grows. But the deficit falls like a stone


Yesterday’s third quarter report from the Ministry of Finance indicates that their estimate of the deficit for 2016/17 fiscal year has fallen by $2.4 billion -- from $4.3 billion to $1.9 billion.

This despite the announcement of another $223 million in new spending increases for 2016/17.  If you recall, the government announced even more in-year spending increases in the fall for Hydro rebates and hospitals.  


Since the 2016/17 Budget, they have now increased program spending about $1.1 billion through in-year increases.  That is an in-year increase in program spending of 0.92%.  

This is quite unusual for a government that typically under-spends their budget.  

The new increased expenditures announced yesterday are mostly on a specific hospital based service and drugs:

·    Ontario Drug Benefit Program: an additional $106.0 million to address funding requirements for the Ontario Drug Benefit program.
·    Malignant Hematology including Stem Cell Transplants: an investment of $95.4 million to support additional capacity to provide stem cell transplants in Ontario, which require specialized facilities and staffing, including creating a new unit at Sunnybrook Health Sciences Centre, as well as OHIP out-of-country costs for stem cell transplants that cannot be accommodated in Ontario.

Health spending is now forecast to be $347.6 million higher than forecast in the 2016/17 Budget. That's the biggest increase of any ministry -- although at 0.67% far from the biggest percentage increase of any ministry.   

Tempering these expense increases is the previously reported $381 M decline in interest expense on the debt. As a result, total expense is up $737 M.

Following an expert panel's report on pension accounting discussed in a previous note, the government is indeed sticking to its preferred accounting method for the teachers and civil servant pension plans, significantly reducing the debt and deficit.  With this, the key debt to GDP ratio is now scheduled to fall for a second year in a row -- hitting 38.3%.
 
The large majority of the in-year decrease in the deficit measured against the Fall Economic Statement is the reversion to the long held accounting practices for these pension plans.  

But this obscures the fact that since the Budget (which also used the government's preferred budget accounting method for the pension plans), there has been a dramatic increase in revenue thanks to increases in a variety of taxation categories.  The big gains were in corporate taxes (up $1.1 B since the Budget) and sales taxes (up $803 M).  Both of these categories have also seen significant increases since the Fall Economic Statement (very significant in the case of sales taxes)Income taxes are also up significantly since the Budget ($726 M) -- but the estimated increase is significantly less than in the Fall Economic Statement.

In total, revenue is up almost $400 million since the Fall Economic Statement and up $2.52 billion since the 2016/17 Budget.   That big increase in revenue largely explains the $2.4 billion reduction in the deficit since the Budget -- when the pension plans were accounted for on the same basis as this third quarter report. 

The government has gotten some favourable media about falling deficits through this third quarter report -- something I can't recall happening before from a usually forgotten report.  

But they are likely saving more good news for the upcoming Budget or the close out of the 2016/17 books with the Public Accounts in late September.  Those are higher profile announcements and much closer to the 2018 election.  

Bottom line: revenue is increasing, the deficit is falling, and the government has shown an uncharacteristic willingness to spend more in-year than budgeted. 

On the fiscal front, things are looking up – at least in the short term.  Some will benefit, but, as always, the question remains, who?  

2/15/17

The end of provincial public sector austerity in Ontario?

The experts appointed to review the claim by the Auditor General that the surpluses in the teacher and civil servant pension plans cannot be counted as government assets have reported.  

Importantly they have sided with the government and against the Auditor General, Bonnie Lysyk.

Lysyk's pension surplus accounting policy required the government to add $10 billion to the provincial debt and $1.5 billion to the deficit last fall. Only then did she approve the final provincial government books for 2015-16 (the Public Accounts).  

The government estimates this policy would add $2.2 billion to the deficit this fiscal year (2016-17).   Indeed, according to the Finance Ministry's Fall Economic Statement the extra program expense associated with this policy is increasing at a rate of $600 to $900 million per year through until at least 2018-19.  The Ministry of Finance reports that this policy would add $2.8 billion  in program expense in 2017/18 and $3.7 billion in 2018/19. 

Ontario fiscal outlook improves


But if this policy is over-ruled, the government could actually spend those billions on public programs (like health care services) and not fall back into deficit. 

This is significant as getting out of deficit has been this government's key measurement of their  own success as fiscal managers -- at least in their public statements.


So the big news (reported by the Toronto Star) is that Treasury Board president, Liz Sandals, now says, for good or ill, that the government is "committed to implementing the advice of this independent panel and will use it in preparing the province's financial statements."   

If so, and if this accounting policy is applied to this fiscal year, $2.2 billion should come right off the top of the deficit. Given that this government always put significant padding into their Budget deficit estimate,  that they reduced the deficit by over $5 billion last year and that they are  (nominally) planning
only a $700 million reduction this year, it is at least possible that the entire deficit will be eliminated this year -- one year earlier than planned.  

Even without this accounting change, the government claimed that they would be deficit free in 2017/18 and 2018/19. So they would be deficit free even with  $2.8 billion in extra program expense  in 2017/18 and $3.7 billion in extra program expense in 2018/19 due to the Auditor General's pension accounting.  

Program expense is $125.3 billion this year. So saving $2.8 billion in program expense should free up 2.23% of program expense for other purposes.  The government was already planning a $2.4 billion (1.92%) increase in program expense for 2017/18, so this, in effect, more than doubles their room.  

Ontario fall economic outlook
 
In total, simply based on their own statements to date, the government has room for $5.2 billion in program expense increases -- over a 4.1% increase.

If provincially funded programs did get a 4.1%  increase, that would be a modest break with the harsh public sector austerity since the recession in 2008-09.  That could help the Liberal re-election campaign in 2018.  It would not however match the widely accepted cost pressures faced in health care.

Of course, just because they have the space, doesn't mean they will use it for good.  For example, the government could blow the cash on tax cuts for the wealthy.  The tax cuts they have provided to date for corporations amount to tens of billions of dollars and there is little doubt that corporations have big plans for all the new found cash. 

Another issue is what position the Auditor General will take. Notwithstanding, Sandals declaration that the government will implement the advice of the expert panel, the Auditor General still has to sign off on the Public Accounts for 2016/17 which are due in September.   

Whatever the Auditor's conclusions, she does not sign off on the Budget (upcoming in the next month or so) and the 2017/18 Public Accounts won’t go to the Auditor General until after the next election.