Little to excite entrepreneurs, says business community
Chatting outside the House of Assembly in the main foyer of the Confederation Building, Rick Daw (left) of the Institute of Chartered Accountants of Newfoundland and Labrador and Steve Power (centre), chairman of the St. John's Board of Trade, discuss Tuesday’s provincial budget with Finance Minister Tom Marshall after Marshall presented the budget inside the House of Assembly Tuesday afternoon. — Photo by Joe Gibbons/The Telegram
For business owner Matt Hickman, this year’s provincial budget provokes nothing more than a shrug of the shoulders.
“There’s not a lot of news,” said Hickman, the owner of Kean’s Pump Shop and KPS group of companies, on Tuesday after the budget was released.
“No real drastic change in spending, no real initiatives, no devastating cuts, no big celebrations of government largesse. I think (provincial Finance Minister Tom) Marshall called it a ‘stay-the-course’ budget, and I think he’s right.”
Hickman said the drastic drop in revenues due to decreased oil production highlights the need for better economic diversification.
“This year we’re going to lose two out of three oilfields just for a little while, and that in and of itself is sufficient to swing us from a pretty strong surplus in 2011-2012 into deficit for the coming year,” he said. “I know they projected a deficit for the past year, but that was beaten handily by improved production and higher oil prices. Without those things, we’re where we are in 2012-2013 and worse again. We all know that we’re dependent on oil, but this really puts it in stark relief.”
For the broader economic community, reactions range from mostly pleased to mostly disappointed. Steve Power, chairman of the
St. John’s Board of Trade, said he was pleased to see the provincial government rein in spending.
“The biggest positive we took away today was the return to sustainable spending,” he said. “We’re seeing spending go up by just 1.7 per cent, which is substantially less than growth in inflation, and we think that’s important. What that’s going to help us do is maintain some programs that we have for future generations, and maintain our quality of life, and we think that’s critical.”
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Power said the Board of Trade wants more detail on the government’s plan for economic diversification.
Bradley George, director of provincial affairs for the Newfoundland branch of the Canadian Federation of Independent Business, said the budget barely deserves a passing grade. He gives it a D.
“There’s nothing really there to excite small business or encourage small business to grow, to hire employees,” he said.
“Really, there was an opportunity for government to address one of their biggest liabilities, which is pensions, public sector pensions, and I think the finance minister missed that opportunity completely.”
The Newfoundland and Labrador Employers’ Council was pleased with reduced growth in spending, but said the government failed to make “two tough decisions” on strategic issues facing the province.
“One of those is just the massive liabilities that we have under public sector, post-retirement benefits,” said Richard Alexander, the council’s executive director.
“So we had $38.8-million savings in government departments, yet the pension liability is increased by $725 million.
“The other area that they failed to make a good, long-term strategic direction decision on was to just make the tax on wages in this province competitive. They had promised to eliminate the health and post-secondary education tax in the Blue Book, and they decided not to do that, for whatever reason.”