News Release Archive
FINANCE--WHITE PAPER PROPOSES LONG TERM FINANCIAL PLAN ------------------------------------------------------------ A long term financial plan to lower taxes, ensure the future of quality public services and reduce the province's $9 billion debt was proposed today in a government white paper released by Finance Minister Bernie Boudreau. The paper, entitled Shaping the Future, contains proposals for legislation that the minister says will achieve three essential goals. "We want to ensure that no government ever again takes this province to the brink of financial ruin. We want to enhance and expand core public services responsibly, as we can afford them. And, we want to begin to attack Nova Scotia's debt, so we can recover the $1 billion a year we pay in interest on that debt." Interest on the debt has grown from nine per cent of the budget in 1979 to 21 per cent today, chewing up dollars the government needs to support essential services. The province expects to fully balance its budget in 1996-97, achieving the goal of the expenditure control plan. The long term plan proposed in the white paper "takes up where expenditure controls leave off." The white paper includes proposals that would maintain a balanced budget, and eventually lead to a budget surplus, which would be used to pay down debt and lower taxes. "Higher taxes and borrowed money paid for the growth of government during the 1980s. It was double jeopardy, government style. Dealing with that double jeopardy - taxes that are too high and a mountain of debt - has become the public policy challenge of the 90s." Mr. Boudreau said high taxes diminish Nova Scotia's competitive position and by extension, deny Nova Scotians jobs. Since 1980, the salary of a middle income Nova Scotian has roughly doubled. But take home pay hasn't kept up, because provincial and federal income taxes have increased by 143 per cent, he said. To keep the budget balanced the minister is proposing that the government pass a law permitting total spending to increase, but only in direct proportion to increases in revenue. He noted that the government faces a serious challenge just to maintain a balanced budget over the next three years, given a reduction in health, education and social assistance funding from Ottawa. "With less money we have to be more selective and a lot smarter; and we have to ensure the benefits from the dollars we spend are passed on to the people, and not choked off by bureaucracy." The minister said the government needs to target its resources to core public services, and that may mean getting out of some businesses in which it is currently involved. He said more emphasis could be placed on public-private partnerships and said the sale of some provincially-owned assets would be considered, after public consultation. The white paper also proposes measures to ensure government's financial decisions are visible to the public. These include legislative consideration of the budgets of Crown corporations and a limit on the amount of money cabinet can spend without approval from the House of Assembly. "The benefits of a financially secure province cannot be overstated. Lower taxes will give Nova Scotia the competitive advantages we need to compete and win in the global marketplace, resulting in better jobs and more economic opportunities for Nova Scotians. Financial security will guarantee Nova Scotians have quality health care, first-rate education and other vital services today and tomorrow." Mr. Boudreau said he hopes the white paper generates broad public debate. The government's actions, he said, will be shaped by that debate. The paper includes a survey that Nova Scotians are asked to complete and return to the Department of Finance. People are also invited to send additional comments, written briefs and submissions. -30- EDITORS NOTE: THE WHITE PAPER, SHAPING THE FUTURE, IS AVAILABLE AT THE NOVA SCOTIA GOVERNMENT BOOKSTORE, 1700 GRANVILLE STREET, HALIFAX. 902-424-7580 OR 1-800-526-6575. COMMUNICATIONS SERVICES IS MAILING COPIES TO EDITORS AND NEWS DIRECTORS, TODAY. Contact: Jim Vibert 902-424-4886 trp Feb. 07, 1996 - 1:00 p.m.