Finance Minister Tom Marshall said this year’s budget was all about sustainability, and that’s a message the St. John’s Board of Trade was happy to hear.
Marshall spoke to the board Thursday morning, and talked up this week’s provincial budget and the government’s more restrained attitude.
Since the Progressive Conservative party was first elected in 2003, government spending has grown by leaps and bounds, fuelled by high oil production and royalties.
This year, though, government spending grew slower than the rate of inflation — a meagre 1.7 per cent.
Board of Trade chairman Steve Power was happy to hear it.
“We have spending growth less than inflation, and we think that’s critical,” Power said following Marshall’s speech. “That needs to happen into the future. We have a
10-year plan for debt reduction that’s going to require constant vigilance looking at our spending.”
In his speech, Marshall talked about the government’s core mandate analysis. In the coming year, government departments will take a hard look at what they’re doing and what they’re spending money on. If it’s not part of the department’s core mandate it’s liable to get cut.
The government will also look to pare back the size of the public service, as nearly a quarter of its employees become eligible to retire in the next few years.
All of this, Marshall told the board of trade, is about getting the province ready for life after the oil runs out.
“If we have revenue, we don’t keep it, we give it back to the people in different ways, but if we have less revenue, we obviously have less money to spend,” he said. “Our spending will be measured and our investments will be measured based on the revenue we have, but our investments still will be robust. They may not be as big as they were a number of years ago, but we’re going to take on a lot of projects.”
Marshall said that ultimately the government wants to get into renewable resources as an alternative to oil revenue — especially hydroelectric power from Gull Island and the Churchill Falls dams.
Marshall’s speech also focused heavily on the Progressive Conservative government’s record in the past nine years in power.
“The economy is probably the strongest it’s ever been in our history. Gross domestic product is at record levels,” he said. “More Newfoundlanders and Labradorians are working today than at any time in our history.”