Dunderdale lays out a new, conservative course

James
James McLeod
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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.”

jmcleod@thetelegram.com

Twitter: TelegramJames

Organizations: Board of Trade, Delta Hotel

Geographic location: Ottawa, Newfoundland and Labrador

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Recent comments

  • Wanda
    February 01, 2012 - 14:50

    Jordan, Everyone is entitled to their own opinion. Obviously, you don't have one on this situation, so you critize those who do.

  • Ken Collis
    February 01, 2012 - 12:47

    Finally the cat is out of the bag. The ratepayers will provide the finances for the hydro project but the government will make money off it. Will the Premier put all the money made from the sale of eccess power towards the cost of development? I bet she says no.

  • Harvey
    February 01, 2012 - 12:08

    What happened to our status as a "have province?" Did the last ten months with Ms Dunderdale at the helm ;plus Tom Marshall's bungling of projecting surpluses and deficits turn us into ''have not" status already?

  • margo
    February 01, 2012 - 10:14

    what was danny williams thinking ,when he stepped down and left kathy dunderdale to look after our province,,not a good idea danny shame on you

  • Scott Free
    February 01, 2012 - 09:08

    Geez, could the budget be as misleading as Premier Dunderdale's glamour pics? or, who's standing in for her in the handout photos?

    • Jordan
      February 01, 2012 - 10:53

      Hahaha personal attacks on the premier makes your opinions sound really credible.

  • Derrick
    February 01, 2012 - 08:49

    With Mr. Marshalls inability to forecast our revenues, I would show restraint too! However Ms. Dunderdale, we are a have province. Come on now, who do you think you're foolin?

    • Jordan
      February 01, 2012 - 10:52

      Alberta is a have province with no debt and they've made cuts.

    • MUN Poli Sci
      February 01, 2012 - 13:25

      To demonstrate the difficulty in accurately projecting revenue streams for the public purse, one only has to look at Alberta in 2009, which forecast a surplus of $6 Billion, only to actually have a deficit of $9 billion within 9 months due to the innacurate projection of the price of natural gas from which AB gets most of its petroleum based revenues, not oil production. An inaccuracy of $15 Billion.

  • Gerry McManus
    February 01, 2012 - 08:42

    The Telegram has reported accurately that Tom Marshall's previous 5 Budgets have underestimated revenues coming into the public Treasury by $2.5 Billion. Marshall himself has explained that projecting Budgets is difficult stuff, so maybe this view that things will be in deficit for the next 2 years is inaccurate as well.

  • Peggy
    February 01, 2012 - 08:31

    Talk is cheap. We just continue on the merry-go-round.

  • Mark D
    February 01, 2012 - 07:02

    I attened the BOT luncheon with the Premier and all I could think about during the delivery of her prepared speech was just how out of place she seemed discussing the important issues of our time. Danny Williams was a scholar, lawyer and successful businessmen. She has none of those attributes and the prepared text that she delivered did not have any resonance of understanding what she was talking about. I doubt Dwight ball or Lorraine Michael could do any better. God help us.

    • Jordan
      February 01, 2012 - 08:16

      Why have you not put your money where you mouth is then and put your name forward?