Creating opportunity by controlling spending
A little over a decade ago, Saskatchewan was crippled by high income taxes, business taxes, sales taxes and property taxes. Saskatchewan was a ―have-not‖ province, completely dependent on handouts from other provinces.
Today, as a result of tax relief provided by the former NDP government and the current Saskatchewan Party administration, Saskatchewan‘s economy and Saskatchewan taxpayers are much better off.
Sales taxes, income taxes, education property taxes and business taxes have all been reduced and are more competitive. While some may intuitively think that would result in a drop in revenues, the opposite has happened – tax revenue has soared.
After all, by reducing taxes, businesses have been to keep more of their revenues and use them to expand, retain employees and hire new ones. As Saskatchewan‘s tax environment has become more competitive, it has helped attract more investment from abroad.
Ultimately, more people working and more businesses succeeding has resulted in more taxes being paid.
But as you will see in this document, there is more work to do.
The Canadian Taxpayers Federation applauds tax relief and debt repayment made since the Wall administration took office.
However, since taking office, the Wall government has let spending climb from $7.7 billion in 2006-07 to $10.5 billion in 2010-11. That‘s an increase of 36 per cent in just four years.
Reining-in spending will allow the province to aggressively pay down the province‘s debt and provide Saskatchewan residents with further tax relief. Ultimately, lower taxes will allow taxpayers to enjoy more of the fruits of their labour and help even more businesses expand and create opportunities for Saskatchewan residents.
This document includes recommendations on taxation reform, spending restraint and innovative ideas to improve overall results for Saskatchewan taxpayers.
Summary of Recommendations: Pre-Budget 2011
1. Increase the provincial share of education funding to 66 per cent in 2010-11.
2. Phase-out education property taxes by 2020.
3. Index tax brackets to the provincial rate of inflation.
4. Reduce the Small Business Tax Rate to 2.5 per cent and the General Business Income Tax Rate to 10 per cent by 2014.
5. Phase-in a single personal income tax rate of 10 per cent over the next five years and increase the basic personal exemption to $15,000 over the next three years.
6. Freeze spending and balance the budget.
7. Limit future spending to the combined rate of population growth and inflation.
8. Evaluate labour legislation and move to a system of hiring and remuneration based on performance.
9. Limit public sector pay levels to no higher than average private sector pay levels.
10. Push for a discussion at next finance minister‘s meeting to address growing gap between public sector and private sector pay.
11. Shift to citizen driven culture and commerce‘ – discontinue cultural and business grants in favour of allowing citizens to determine which bodies they wish to support.
12. Allow licensed private health firms to provide the same services as the public system.
13. Conduct an in-depth examination of Saskatchewan crowns and be open to privatization.
14. Allow private sector competition with public liquor retail.
15. Explore managed competition and gain sharing for government services to reduce costs and improve results Debt Repayment
16. Establish a goal of becoming debt free by the end of 2015-16.