News Release - March 23, 1995
Winston Baker, the Minister of Finance and Treasury Board,
today delivered a balanced budget in the House of Assembly of
Newfoundland and Labrador.
Baker said his budget will require no borrowing in 1995-96 to
cover either current account or capital account expenditures, and
no new taxes. "For the past five years, we have been
progressively reducing our spending with the goal of balancing
our budget. Today, I was able to inform the House of Assembly
that we have achieved our target of a fully balanced budget, one
year ahead of the schedule we had set for ourselves."
The budget projects that the province will actually have a total
budget surplus of $1.9 million in 1995-96. The Minister credited
the balanced budget to a number of factors, including increased
economic activity and revenues from traditional government
sources; adherence to a deficit reduction strategy which has
brought expenditures under control; and some extraordinary one
time revenues which the province will receive during 1995-96.
Baker added that this favourable situation will be achieved
without major reductions and cutbacks in either services or
employment. "An important part of our deficit reduction
strategy is to provide services more efficiently. A number of the
measures we are taking will do exactly that, through
restructuring in health care and education, consolidation of
certain government services, and restraint of spending in
departmental budget cuts. Only a very few of these measures will
have an effect on employment, but all can be expected to improve
the quality of services provided by government," said Baker.
On the revenue side, these efforts will be complemented by plans
to collect $19.6 million in dividends from the crown-owned
Newfoundland and Labrador Hydro.
Baker said that, besides containing costs, the government will
continue its aggressive efforts to promote business and economic
development opportunities through its EDGE program of tax
incentives to business, the economic development zones,
regulatory reform, and the planned introduction of a Scientific
Research and Experimental Development tax credit in 1996.
The Minister said it will be a major challenge for the province
to deal with the reductions in federal transfers announced in the
federal budget. "We remain concerned about the federal
reductions in social transfers, and I will be carrying forward
the message that social transfers must be allocated on the basis
of demonstrated need, not on a per capita basis. In addition, we
will be starting early in the new year with the implementation of
a multi-year approach to expenditure management so that all
stakeholders are fully involved in this process."
Baker also said that, in dealing with other issues of concern
such as the large unfunded liabilities in public sector pension
plans, and enhancement of municipal infrastructure, government
will be consulting with stakeholders to develop reasonable
solutions.
The Minister concluded his speech by emphasizing that this budget
is one element of a long term strategy to improve the province's
economy. "There are many significant fiscal challenges ahead
of us. No single budget can offer a solution to all of these
challenges, but each budget must be an incremental step ... each
budget must build on the foundation of those that precede it, and
become part of the sound fiscal foundation for those budgets that
will follow it. This foundation is essential to the attainment of
our economic and social objectives."
For information, please contact:
John Downton
Director of Public Relations
729-0110