Fiscal management puts oil revenues at risk

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When we talk about the present and future prosperity of Newfoundland and Labrador, it is hard to overestimate the importance of oil revenues. One third of the total revenue the province collects to fund health care, educate our children and provide the services people expect and need comes from oil royalties.

Ensuring the people of the province get every single penny of revenue from these royalties requires government to complete audits of the royalty dollars collected to ensure the maximum amounts are paid.

To understand the importance of these audits simply look at audits carried out on the royalties that came from the Terra Nova oil fields from 2002-2005. Audits which resulted in an additional $45 million owed to the people of the province. These recovered dollars highlight the importance of timely and efficient audits being completed.

In 2008, the auditor general raised serious concerns about the audit timelines of the current government saying proper staffing levels were not in place and audits were at risk of falling behind because there are not enough people completing the work. Now in 2014, the auditor general is again saying it will be extremely difficult to finish these audits on time with the staff available. Last year government cut important public service staff that completed these audits leaving the timely closure of the audits at risk.

To further highlight government’s fiscal mismanagement you need only look at their practice of spending double or triple on outside consultants in an attempt to try and catch up on the hundreds of audits that need to be completed before deadlines expire. So, taxpayers pay more money for these audits and the audits take longer than necessary putting potential future oil revenue at risk. In the end the residents of Newfoundland and Labrador are covering the costs associated with this poor fiscal management practice.

Considering the value of the potential oil royalties to our province Government should be made to answer for their improper staffing levels, as well as the excess costs of hiring outside consultants. Surely systems and process can be established internally to efficiently and effectively audit oil royalties. Yet despite repeated warnings from the auditor general, Government’s inefficient fiscal management puts revenues at risk while also wasting taxpayers’ money.

Cathy Bennett — MHA, Virginia Waters

Opposition finance critic

Geographic location: Terra Nova, Newfoundland and Labrador

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Recent comments

  • A.S. Morris
    August 29, 2014 - 15:23

    Newfoundland & Labrador Government is still living in the time of Joey Smallwood. It doesn't matter which government is in power it turns out to be the same. It is amazing audits are not completed on time and made public. Do you have to wonder why Newfoundland & Labrador are laugh at by the rest of the country? Wouldn't it be just a stress panic for the government if all Newfoundlanders were to return all at the same time. Especially those who have been working outside Newfoundland for most of their working lives. I wonder how much money has gone toward expense accounts by MLA's.

  • NL's Audit System is far too lax. Fix it please!
    June 10, 2014 - 13:58

    The article states: '''To understand the importance of these audits simply look at audits carried out on the royalties that came from the Terra Nova oil fields from 2002-2005. Audits which resulted in an additional $45 million owed to the people of the province. These recovered dollars highlight the importance of timely and efficient audits being completed.""" My question is was this $45 Million in hiding waiting to be stolen by those who knew about it and were awaiting it not being discovered? I can't believe how lax the audit system is in our province. Someone needs to fix this loophole immediately.

  • Susan
    June 10, 2014 - 04:55

    Ms Bennett, Fine new relieve. but your taking the long way around, just to say this Government. Explain, what do you mean by fiscal management? Its sound more like the liberals are planning on doing plenty of cuts if they become to power, or are you saying the liberals are going to be over spending just to get the votes of the people. which is it? We all know your not concern about over spending, At one time you were on the board of Nalcor, when that project was approve , you wasn't concern about fiscal management then.

  • Scott
    June 09, 2014 - 16:37

    Ms Bennett your talking about fiscal management of our revenues and tax dollar. TRUE..But there something wrong with this picture, See if you can help me out, According to Dwight Ball and the rest of the Liberals, has of to date the Libs aren't in power. But for some reason where every Dwight and the rest of gangs travel. Their, along with you are telling the people, what ye would do if ye were in power. Its take money...True...Please explain where is all this money coming from? If the PC's got in a sinking boat. Answer backs of the working poor...True...Ms Bennett I believe at one time, You and Dwight are also telling the people about diversification our economy...Please explain how? Thing about words they are cheap...True...

  • Laughable
    June 09, 2014 - 16:18

    Now this really is funny, Coming from a lady who think fiscal management should be on the backs of the working poor, by laying off our people, and bring in foreign workers. Only finance she understand, is her bank account.

    • Pierre Neary
      June 10, 2014 - 16:54

      Your comment is unsubstantiated and should be removed from this site.

  • Roy
    June 09, 2014 - 12:07

    This is what we're headed for. McBennett's concern about fiscal management is not the run away level of spending but how to get more money. Please Dwight, do not make her the Finance minister.

  • Jay
    June 09, 2014 - 11:06

    Note, you didn't mention Muskrat Falls.Maybe they should kick the AG out of the House of Assembly, and let them audit other things. Oops, tried that.

  • Maurice E. Adams
    June 09, 2014 - 09:15

    Fiscal mismanagement (by government and Nalcor) puts ratepayers, the poor, low and middle income earners, economic development, business competitiveness, and the province's credit rating at risk.

    • Christopher
      June 09, 2014 - 11:51

      Perhaps if you did not always sound like a broken record more people would actually agree with you.

    • Maurice E. Adams
      June 09, 2014 - 12:14

      Fiscal mismanagement (by government and Nalcor) puts ratepayers, the poor, low and middle income earners, economic development, business competitiveness, and the province's credit rating at risk.