March 29, 2018
For Immediate Release
Liberal Approach Not Working:
2017 AG Report and Moody’s Share Concern
Keith Hutchings, Finance Critic for the Official Opposition, says, “On their third budget, the Liberals’ fiscal approach is not working. The 2018 budget raises spending while the economy continues to shrink with future projections to 2022 heading in the wrong direction. Budget 2018 continues to miss the opportunity to get spending under control while creating the conditions for economic growth.”
In a 2017 report, the Auditor General raised serious concerns about the Liberals’ fiscal approach. In Moody’s’ report today on the 2018 budget, the rating agency said: “Moody’s considers that the province faces increased risk that it will be unable to attain its goal of balanced budgets by 2022/23, a credit negative for the province.”
Hutchings said, “This year’s statement by Moody’s backs up what the Auditor General warned about last year: that the Liberals are not on track to get spending under control. Their spending has actually increased this year. After three budgets, the Liberals are still not ready to make use of attrition opportunities that could have helped them reduce expenditures significantly if they had a plan in 2016, the first year of their mandate. They have been unable to demonstrate a desire or knowledge for changing the way we deliver programs and services in our province to meet our changing needs or to partner with the private sector where appropriate to deliver services.”
“Ironically, while their spending has increased, all the indicators in their own documents show that the province’s economy is heading in the wrong direction. Incomes will fall, retail sales will fall, capital investment will fall, new housing starts will fall, employment will fall, unemployment will rise over 14 per cent this year, the population will fall by 11,000 by 2022, and the economy will shrink. These are not the indicators that will get us back to surplus in 2022, and agencies are recognizing this. This was not the growth people were promised or the growth we need.”
“A big reason for the shrinking economy is the heavy burden of taxation the Liberals have kept in place since 2016, including taxes on retail sales, gas, insurance and income – and the dreaded levy. To make matters worse, they plan to impose a new Liberal carbon tax which will not only mean an individual tax on consumption but a trickle-down effect for products sold in our supermarkets, retail stores and municipal taxes, just to name a few – and it was not even mentioned in Budget 2018. Let us not be fooled by the belief of no new taxes in this fiscal year: one of the biggest yet is coming to Newfoundland and Labrador. The more-than 300 taxes and fees the Liberals instituted in Budget 2016 have cut disposable income, reduced spending, curbed investment and cost jobs, and a new carbon tax will further stifle our economy and increase the cost of living in our province and leaving us even less competitive with other provinces – thus, the Liberal projection of 11,000 people to leave in coming years,” he said.
“The Liberals continue to kick the can down the road without a realistic plan to cut spending or create the conditions for growth. We said in 2016 that the Liberals were not ready to govern. Clearly, they are still not ready,” said Hutchings.
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Director of Communications,
Office of the Official Opposition
(709) 729 6105