Finally, a real balanced budget
This column was published in the New Brunswick Telegraph-Journal on March 21, 2019.
It’s thirteen years overdue, but New Brunswick taxpayers are finally seeing a real balanced budget with actual debt reduction. Bravo.
The government is projecting a $23.1 million surplus and the province’s net debt, which has hit $14.1 billion, is decreasing by $49.2 million.
That’s good news for taxpayers today and great news for taxpayers tomorrow. The debt is hanging like a noose around the necks of taxpayers. Interest charges already cost the government nearly $700 million every year. Credit rating agencies have issued grave warnings of looming credit downgrades.
By far, debt is the biggest issue in the province and the government is tackling it.
Taxpayers should view the budget with cautious optimism. The budget is balanced and the government made some tough, but necessary, rollbacks, such as reducing spending on Opportunities New Brunswick.
But here’s an important point to remember: overall spending is still increasing.
The government introduced a new slush fund for MLAs – reportedly costing taxpayers $2.4 million – to spend in their ridings for: “projects that are important to the fabric of the communities they represent.”
In reality, it will only lighten the load on the fabric in taxpayers’ pockets by taking more money out of them. The new MLA slush fund represents about $50,000 in new spending for every MLA to splash around. At a time when everyone needs to tighten their belts, it’s absurd that MLAs are giving themselves more money to throw around.
Not all spending is bad. In fact, some spending can save taxpayers money. The government is increasing the auditor general’s budget by $1 million. When bureaucrats live in fear of a scathing review from the auditor general, taxpayers save money.
But to secure balanced budgets into the future, it’s imperative that spending goes down – not up.
Finance Minister Ernie Steeves said in his budget speech that the government cannot continue to spend beyond its means and can’t keep raising taxes on hard-working New Brunswickers.
Yet continuing to increase spending leaves the government little wiggle room. New Brunswick is standing on a fiscal cliff of debt. Relying on rosy revenue projections and transfers from Ottawa to balance the budget means any stiff economic headwind could blow the province back down into deficits.
New Brunswickers need a prudent plan to pay down the debt with or without good economic luck and cash from Ottawa.
The budget contains no tax hikes, so it’s not going to make life more difficult. And the government acknowledges New Brunswickers need relief. Unfortunately, the budget isn’t actually saving New Brunswick families any money through broad-based tax cuts.
Tax relief is an urgent necessity for New Brunswickers. Instead, the government characterized tax reduction something it’ll consider some time in the future.
New Brunswick needs jobs and people – fast – and lowering taxes will stimulate job growth and attract new people to the province by making it competitive.
Today, New Brunswickers still pay the highest sales tax in Canada. They still pay some of the highest business taxes and top marginal income tax rates in the country. Many New Brunswickers pay outrageously high WorkSafeNB rates and many are still hit with the unfair double taxation on property. On top of all this, Ottawa’s carbon tax is on its way.
The government needs to speed up the tax cut timeline.
The government gets three cheers from taxpayers for a genuinely balanced budget and a focus on shrinking the debt. The province is on the road to recovery. The next stop needs to be tax relief.
Paige MacPherson is Atlantic Director of the Canadian Taxpayers Federation.