Budget vague on details, groups say
While some people saw encouraging signs in Monday’s provincial budget of how the Furey government intends to control spending, others say a lack of detail is disappointing.
“The cumulative effect of years of spending more than we bring in has led to interest costs on our debt being one of our largest expenditures,” Finance Minister Siobhan Coady said Monday.
“Solutions are needed to address long-standing structural issues such as the high cost of providing services to nearly 600 communities across a large geography, chronic deficits, dependence on volatile oil revenues, as well as a declining and aging population.”
Richard Alexander, executive director of the Newfoundland and Labrador Employers’ Council, said his group is disappointed in the budget because of its lack of detail.
“We have a major structural spending problem and government’s plan to return to surplus doesn’t appreciably decrease government spending, so I don’t know how it is that you deal with a spending problem by not decreasing your spending,” Alexander said.
“We have businesses in the province now that are liquidating assets, we have employees — the best and brightest, our talent — leaving the province because they don’t see a future, and we have other businesses that are struggling to get financing for some of their projects because Newfoundland and Labrador is not viewed as a good place to invest right now.”
Justin Ladha, chair of the St. John’s Board of Trade, says the $20 million for the small business assistance program announced in the budget is important for members of the board, and the government’s willingness to open discussion regarding provincial assets is encouraging.
“I’m glad to see that they are looking at new ways to provide services, talking about partnering with the private sector and other community groups,” he said.
Ladha said the board has advocated in the past that while the government is focusing on eliminating the deficit, it can’t lose sight of the bigger picture of total debt.
“We have $47 billion in debt and we are spending $1 billion a year today in servicing that debt, and we are in an environment of increasing interest rates,” he said.
“We need to look at avenues to reduce that debt, and the only way to do that is to bring in big chunks of cash, so I’m pleased to see that the province seems open-minded to looking at our assets."
Jerry Earle, president of the Newfoundland and Labrador Association of Public and Private Employees, said the possibility of the government selling assets, particularly ones that are making money for taxpayers, is concerning.
“When they start talking about a review of such things as the Newfoundland and Labrador Liquor Corp., then you go into the budget itself, there’s a line in there that says they anticipate the liquor corporation to make $200 million for the taxpayers this year in this budget cycle,” he said. “Why would you consider getting rid of it, other than a reward for the business community, getting rid of something that actually makes money for the people of Newfoundland and Labrador. It makes no sense whatsoever.”
Eduardo Araujo of Social Justice Co-op NL said raising tuition fees at Memorial University will hurt immigration efforts.
Mostly I feel the budget is not really fulfilling, especially when it comes to immigrants,” he said.
Araujo said raising tuition fees will create a barrier and discourage people from moving to Newfoundland from other countries.
“It just doesn’t seem right,” he said.
Zach Langdon, also with the Social Justice Co-op, said he is concerned about subsidies continuing to the oil and gas industry when the province is supposed to be transitioning to a green economy.
“But they are not actually doing enough right now. It’s not enough to say we are making this move for the future. We need to be doing it right now — $280 million towards the oil and gas industry, I think, is a lot when they haven’t really made the same push for other industries right now. They know we need to diversify our economy, but they are not really putting the effort in right now. They are still sticking with giving the money to the oil and gas industry.”