Speech to the Board of Trade focuses on restraint, debt reduction
Premier Kathy Dunderdale made her annual appearance at the St. John’s Board of Trade Tuesday. — Photo by Gary Hebbard/The Telegram
Premier Kathy Dunderdale made it clear Tuesday that the big-spending days are over.
In a major speech to the St. John’s Board of Trade, Dunderdale laid out her vision for the government over the next several years.
The years of big government spending increases fuelled by oil revenue are over, Dunderdale said.
“Our growth in spending, while absolutely necessary, must now be contained,” Dunderdale told the packed ballroom at the Delta Hotel in St. John’s. “The question we all must consider is how do we achieve the careful balancing act between economic growth, a high quality of life and affordable public fin-ances?”
The government is forecasting a deficit this year of nearly $500 million, and a smaller one next year, due to temporary oil production shutdowns and the loss of Atlantic Accord payments from Ottawa.
Despite that, Dunderdale said her goal in the next decade is to radically bring down the province’s debt.
“It is our goal to improve our debt position over 10 years to achieve the same per capita debt as the Canadian average,” she said. “We can get there through discipline in spending, and allocation of surpluses to debt reduction, while allowing for periodic deficits.”
As the government draws together its budget for the coming year, Dunderdale said there will be virtually no new spending and departments will look to trim whatever fat they can find.
“Whether or not we can have any level of new spending is something that’s under vigorous discussion and study at the moment,” she told reporters following her speech.
“The clear message went out some time ago to all departments: don’t come in with a wish list — you know, come in with what absolutely has to get done.”
Two specific areas that are top of mind as the government looks to restrain are health care and public sector salaries.
The government is going into contract negotiations; last time around, it negotiated a deal which gave public sector workers a 20 per cent raise over four years.
While Dunderdale acknowledged the raise was needed to bring workers in line with other parts of the country, she stressed this time around, those kind of agreements won’t be on.
“During our last contract negotiations, the valued skills and contributions of our public service were recognized with a substantial wage increase, and it was long overdue,” she said. “A more moderate approach is now required in light of our fiscal forecasts.”
The health care budget takes up nearly 40 per cent of the total budget. On that front, though, she said the province will need more money from Ottawa, as part of a new health care accord negotiated by provinces.
Liberal Leader Dwight Ball was in the audience and, by and large, he said he approved of the course Dunderdale was charting.
“I’m not here to say that we don’t have to get our debt at a manageable level — I believe we do,” he said. “Obviously, she wants to get a handle on this debt.”
Steve Power, chairman of the Board of Trade, was beaming about what he heard in the speech.
“I think it’s a very exciting event for us today,” he said. “They’re certainly themes that we believe strongly in.”
Beyond spending restraint, Dunderdale also talked about a need to transition the economy away from non-renewable resources, towards renewables.
On this front, she said that the Muskrat Falls hydroelectric project is a cornerstone.
Finally, she talked about the need for the province’s as a whole to “fully capture” the opportunities of the future.
Government spending cannot drive the economy.
“Government cannot and should not do it alone. We need your contributions and collaboration,” she said. “We need young people hungry for lucrative careers to take up the challenge. We need business owners hungry for lucrative contracts to take up the challenge.”
One concrete example of fostering a growing industry she gave was in the ocean sciences field. Dunderdale said it’s the government’s goal to grow that sector to become a billion dollar industry by 2015.
“We are drawing students and investors from around the world by establishing a reputation for excellence, leadership and teamwork in the “blue” economy – and this is but one of the leading-edge sectors in which Newfoundland and Labrador is capturing new opportunities through innovation and partnership.”