Province looking to cut 30 per cent spending

James McLeod
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Finance Minister Cathy Bennett speaks to reporters Wednesday afternoon.

Update: Finance Minister Cathy Bennett now says that public service layoffs are “on the table” to deal with the province’s massive fiscal crisis.

As it prepares to present a budget this spring, the government is looking for proposals to slash up to 30 per cent of spending over the next three years, according to an internal document obtained by The Telegram.

Government departments, agencies, boards and commissions (ABCs) are asked for proposals to make big cuts, in guidelines from the Government Renewal Initiative, which is steering the budget planning process.

Related story:

Liberal government issues ‘call to action’ on coming budget

“The Government Renewal Initiative is requesting departments and ABCs to identify savings totaling 30 per cent of their 2015-16 expenditures over the next three fiscal years,” the document says. “A specific target has not been set for each year, but departments and ABCs should be prepared to implement accepted proposals as early as possible.”

Hit by falling oil prices and a structural deficit, the provincial government is currently nearly $2 billion in the red, and Premier Dwight Ball has said he’s consulting with the public for ideas on how to raise revenue and cut spending.

After news of the 30 per cent document broke, Bennett spoke to reporters at Confederation Building and said the target is a “blue sky” number to make sure that every possible option is considered.

Among those options, she said, the government must now look at public sector layoffs.

It was only in November, when the Liberals were running in the general election, that they categorically promised there would be no layoffs.

Bennett said no decisions have been made, but given the enormity of the problem, everything must now be considered. At the time when Bennett was speaking, Brent crude oil was trading for less than $28 per barrel.

Also Wednesday afternoon, Progressive Conservative Opposition MHA Steve Kent issued a news release criticizing government for spending too much money on a flashy public event to unveil a new tourism ad for the province.

Kent’s release said that the government spent nearly $8,000 on the event, including a $1,000 performance fee for the singing duo Fortunate Ones, and more than $5,000 in audio and visual staging gear from Eastern Audio. The Opposition release also said the government spent $493.93 on refreshments.

“In tough times, most people would describe a launch party as discretionary,” Kent said in the release. “If the government had been serious about making every dollar count, why would it have spent thousands to host a tea party with a few dozen people, when it could have saved money by simply holding a news conference in the government’s media centre and launched the campaign through its existing YouTube channels and other social media.”

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Recent comments

  • Muggins
    January 21, 2016 - 11:44

    Bennett seems to be the only one who has the courage to tell it as it is. We are in survival mode & it is time to poke a fork in our bloated civil service. Considering their salaries alone consume almost 50% of revenue speaks volumes. It seems they are the only ones who think they should be protected from dire economic times. In the real world companies lay off & hire people according to their prosperity. The party is over & now we have to suffer through the hang over.

  • Barb W.
    January 21, 2016 - 06:18

    Since moving to this province 6 years ago I have found that politics here is wild in compared to other provinces. The thing I find mind boggling, is the lack of perception by the 2 main parties. Over the past 12 months there has been a steady stream of BS spewed by the Ball and Bennett Liberals. I don't ever recall a new gov coming in and being so immediately unpopular and eager break its word to the people. I would think this is a gift to the (also unpopular) PC party who is looking to rebuild, right? The story above alone gives them an opportunity most defeated parties could only dream of. Important moment i would assume, so who do they send out to capitalize on this opportunity?.. The most widely and collectively disliked member of their party, Steve Kent! Even after sifting through the trolls and partisans, the fact that the PCs can't see that Kent hurts them more than he helps them shows a complete lack of reality on their part and explains, in part why they are seated on the other side of parliament. Let us hope NL is not too damaged during the downfall of the economy but it is both hilarious and frightening to see that not only does the government not know what it's doing.. neither does the opposition. You're up NDP.

  • Lumptn
    January 20, 2016 - 20:40

    As predicted,,, as they did before, 1000's of layoffs.. Guess their promise of no layoffs during the Election were false... Learning the hard way!

  • James Hoover
    January 20, 2016 - 19:31

    I for one would like to see a 30% cut in Municipal budgets as well. For example trips to training/information sessions. Haven't people heard of Skype. Time to bite the bullet and delay or cancel some of the projects. Some towns are spending like drunken sailors.

  • dave k
    January 20, 2016 - 18:32

    none of these cuts of course...will come from higher ups or management

  • hslaw
    January 20, 2016 - 18:27

    I worked in health care for 26 years Always when cost cuts were put in place it was always front line workers affected staff were given extra work and middle and upper management always grew

  • Sam
    January 20, 2016 - 17:22

    The last thing I want to see or hear from is the likes of Steve Kent. The Liberal government is tackling the staggering financial mess caused by mismanagement from the former government. Unfortunately the taxpayers have to cover that idiots salary for the next four years.

  • Greg
    January 20, 2016 - 16:51

    Two politicians that I find totally annoying and from what I read on social media I am not alone disliking Steve Kent and Jonathan Galgay. Gratefully, Kent is not on the Government side of the house and Galgay is not Provincial.

  • reality check
    January 20, 2016 - 16:43

    Steve Kent might have a point about 'discretionary spending' but it was his government that created this mess, so he needs to be very careful how what he says on the subject for the next few years.

  • Randy
    January 20, 2016 - 16:43

    Paul Davis and the Boyscout drove the credit card up and now the adults have to clean up their mess. Can't wait to here the hypocrite PCs complain now

  • Kat
    January 20, 2016 - 16:20

    So scary for what the future holds here as we now have two powerful political leaders ie Mr. Ball and Ms. Bennett who were/are entrepreneurs/businesspeople who pay ( correct me if I am wrong please) MINIMUM WAGE to their staff. Lord help us. Can we expect them to see beyond poverty wages as they stack their own bank accounts? I am usually a positive person but today that positivity has left me. I can see these two serving only one term! Hope the damage is not too severe.

  • Kev
    January 20, 2016 - 16:07

    Guess the consultation isn't going so great after all...

  • Charles Murphy
    January 20, 2016 - 15:19

    I'll say it once more, Our new provincial Liberal government is going about it the wrong way. Before making this step. seek advice.

  • Brian
    January 20, 2016 - 15:00

    Yes Steve, you are correct. There could be options that the government could have used. This government is probably steeped in the traditions that the previous government used . The new administration needs to step back from what went on in the past and be innovative . I guess that you were one of the ones that had a refreshment on the people. You are probably well use to that. I would like to see this present administration cut back on the allowances for the Tory opposition and the NDP that reflects the economic challenges that the province faces . I hope that the opposition and the NDP would understand and not make an issue of the reductions in their allowances should the government choose to implement changes.

  • Can the media please stop interviewing Steve Kent?
    January 20, 2016 - 14:57

    Maybe as a pacifier for the jaded taxpayer, they could organize a 'launch party' for Steve Kent. They've just discovered a new planet that's actually a large ball of gas. Kent should feel right at home. And if there's room on board, let John Smith keep him company?

  • Sally Forth
    January 20, 2016 - 14:47

    What? You couldn't see this coming when you were applauding the big settlements Danny and Dunderdale were heaping on the public sector? Or when two-thirds of you were expressing your support for the 'great at twice the price' Muskrat fiasco? Repent at leisure.

  • SkepticalNewfoundlander
    January 20, 2016 - 14:19

    I have the solution to almost the entire deficit. Take back upper churchill. Quebec makes 1.7 billion/year off of it. They'll be making more starting this year. And Newfoundlanders will actually be paying to keep in running. How can the federal government allow these ridiculous tariffs on electricity and claim alberta's trans-provincial oil pipeline is a right? At the very least shut it off and cut our losses.

  • Graham
    January 20, 2016 - 14:00

    A good place to start would be Nalcor and NL Hydro. Cut the salaries and the bonuses.Ed and Gilbert are not as important as they think they are. Really how many vice presidents of operation do we really need?

  • Oh my
    January 20, 2016 - 13:52

    Funny thing, but Kent attended that launch he criticizes and in his typical self-serving way Instagrammed and tweeted pics re: Fortunate Ones and the launch!! This guy is a hypocritical fool.

  • Go away Steve
    January 20, 2016 - 13:49

    Steve Kent is all for himself as always and thinks he will be premier one day. Hahaha. He was complicit in all this. He needs to buzz off.

  • cost cutter
    January 20, 2016 - 13:47

    Hi Mr. Ball: Thanks for the opportunity. 1. amalgamate the complete northeast into St. Johns organize equal taxing and eliminate municipal operating Grants. 2. Get out of the liquor business and just collect the tax 3. Remove the profit clause for nl power et al and privatize it who cares. 4. Stall Muskrat Falls 5. tell people to come in off the islands or buy there own boat. 6. Reduce 40 percent of the public employees. 7. MUN is a joke , set minimum 15K per year for all tuition, 45 K for all foreigners , make it a non profit and get out of the educating business Reduce MHAs to 15 no people there anyway God Bless

    • PSWorker
      January 20, 2016 - 14:40

      Ok "cost cutter", I agree on moving people from the islands and moving the inland. Doesn't make any since that gov. would pay for a ferry service for so little people, ie. Bell Island. As for cutting 40% of the public employees, how in the hell would that work for the hospitals, schools, highways, and all other government agencies, entities, etc? Get Real!

  • The politics of electricity....
    January 20, 2016 - 13:34

    I believe that Muskrat Falls sh be revisited and if possible the public money expended there sh be curtailed until we balance our budgets. Like you said Premier Ball every thing is on the table including the Danny Williams project which is costing us big time in a market where oil is the cheapest form of energy even for Holyrood and will likely be for years... Mr Ball as a taxpayer you can't expect to increase my taxation because politicians screw up and make bad choices... I had nothing to say about Muskrat Falls that is on Danny Williams..... I live in the now not 45 years from now.... I personally believe this project is a good reason why our province is in trouble as it is gobbling up large amounts of yearly revenues not to mention what it will do when it will increase our electrical rates substantially when it comes on line..

  • Tim
    January 20, 2016 - 13:32

    The politicians bankrupted the province ! Classic!

  • Bob
    January 20, 2016 - 13:27

    Steve Kent has to be one one the most arrogant and annoying humans on planet earth.What were the fine folks of Mount Pearl who voted him back in again smoking on election day?

  • Trish
    January 20, 2016 - 13:20

    How about rolling back some of our government officials salaries? It seems that our deficits fall on the shoulders of our union members. Why not roll back salaries of the premier and members.

  • Elizabeth
    January 20, 2016 - 13:19

    Maybe it's time to make a cut on welfare cheques! Most of these people could be working like the rest of us. Why work if they can get their cigarettes, beer, etc handed to them? Time to change that!

    • Shawn
      January 20, 2016 - 13:32

      While I do agree that alot of the "lazy" people that take advantage and abuse the system, the cost of welfare is spit in the bucket compared to what needs to be done. Fact of the matter our elitist government and business leaders have cause the mess we are in today, not people on welfare, for whatever reason. you want to make the right cut backs, start at the top. Go though all the government agencies and crown corps are pull all the fat cat management positions that are redundant. Cut back on their executive salaries and bonuses. Cut back on the expense accounts of the managerial positions that are left after the first round of fat cats are gone. Cut back on travel expenses for all government personnel. Raise taxes for everyone and even more for the top earners and corporations. The poor people always get the burden while the rich get bonuses and that is why were are in the situation we are today, not because of anyone on welfare. To quote the current US president : "poor people on food stamps have never cause a financial crisis".

    • PSWorker
      January 20, 2016 - 14:44

      I agree Elizabeth on individuals on welfare. Government needs to review the lazy ones on welfare, who have everything paid for them, ie. housing, food, smokes, beer, etc. Not to tar them all with the same brush, but, "Get a Job". I work 2 and still find it hard, but I do it to pay for the lazy ones who sit home and do diddly squat. Shame on you!

    • Shawn
      January 21, 2016 - 07:21

      @PSWorker The way to make that work would be to separate welfare from disability programs. Currently they are one in the same and anyone without income for a certain period of time qualifies. Separate into two programs and make the welfare end of it a "one time hand up" style program and not a lifestyle choice like it currently is.

  • david
    January 20, 2016 - 12:32

    60 percent immediately isn't even enough. Oil revenue became our heroin, and Muskrat Falls is our hemlock.

  • Political Watcher
    January 20, 2016 - 12:28

    Ask Kent then why his Gov't sent Minister Brazil an staff to Romania twice only to receive a piece of crap ferry! Kent should just shut up and go away. I can go even further to a hugh flashy Press Conference Dunderdale hosted on to announce a deal that never existed. Kent should keep to school announcement and that's it!

  • Taxpayer
    January 20, 2016 - 12:27

    When Danny Williams was in power the province spend a million dollars on a flower.

  • How about
    January 20, 2016 - 12:27

    How about starting by looking at where Danny started to spend more money and start cutting there. Another word, lets try to undo the damage he caused. Such as the Danny Fund in the Dept of Natural Resources. It's a 3/4 billion dollar program for Nalcor. Chop that first.

    • The real Calvin
      January 20, 2016 - 13:26

      Yes, cut money to hospitals, schools, roads.... any service provided by government really. How fickle we are as a province. When times are good no one complains about spending. Doesn't matter who was in power in the last decade, we'd still be in the same predicament we are right now. If the money hadn't been mismanaged on a potentially viable project like MF, it would have been spent somewhere else, and we'd all be crying the same sob story.

  • dan
    January 20, 2016 - 12:27

    Three ideas for Mr. Ball is to cut back on 1. Management, 2. Management and 3. Management. Seems like anyone with a contact or special skillset is in management. Most managers/directors have 2-4 staff under them.

  • JJB
    January 20, 2016 - 11:56

    Steve Kent drives me!!! Couldn't do crap when with he's a know it all!!!One irritating man!!

  • john
    January 20, 2016 - 11:54

    The best bet for Mr Kent is to keep his mouth closed for awhile. It is his government's failures that have us in this situation in the first. He is a first class hypocrite as they had no trouble throwing splashy events when they knew we lack the monies. Also you guys expected to get elected by not giving a fiscal update before the election because you knew full well of the position we were in. You might be able to fool the voters in your district Mr. Kent but the province as a whole is not fooled by your grandstanding and lack of abilities in government. Just keep quiet and go to the bar and grab a beverage with the other blowhard Galgay.