Raises caution, however, on deficit spending
Today's provincial budget offers some welcome public policy initiatives and programs for business in Newfoundland and Labrador, according to the St. John's Board of Trade.
The board, however, said government should be cautious about deficit spending.
Budget 2010 projects a revised deficit of $294.9 million for 2009-10, and forecasts a deficit of $194.3 million for 2010-11.
"Economic conditions are not static, but prudent management of public funds must be a key consideration for the province," Board chairman Derek Sullivan said.
"The board advocates for debt reduction because that frees up financial resources far into the future. Paying a dollar today on driving debt down will mean multiple dollars for public programs and services in the future."
According to a news release, the board does recognize that government investment in the economy, particularly in regions harder hit by economic challenges, is necessary to support success across the province. Additionally, the track record of government in the past few years in terms of deficit reduction has been welcome.
"This year's provincial spending plan does include a deficit, but we are confident that government will largely stay on the track of working towards reducing our public debt over time," Sullivan said. "Achieving surpluses and getting rid of the provincial debt will pay off for everyone. It's in all of our best interests to encourage our provincial leaders to achieve that goal, even if it means that we don't all get what we want right now."
The board supports a number of items announced in today's budget:
• a drop in small business corporate income tax rate from five per cent to four per cent;
• More than $65 million to help private sector enterprises expand as part of a $126 million business plan;
• Increasing the dividend tax credit rate to 11 per cent from 9.75 per cent;
• and decreases in personal income taxes.