Speculation of an HST hike rekindled (Telegraph-Journal March 14,2015)
FREDERICTON • The finance minister says the provincial budget on March 31 will be full of difficult decisions, what the Tory Opposition leader describes as code words for one of two things: a sales tax increase or a cynical ploy to delight people if the Liberals don’t impose a widely-expected HST hike.
Finance Minister Roger Melanson released the budget date in the legislature Friday, ending weeks of speculation.
“The province’s fiscal track record has been abysmal in recent years,” Melanson said, a reference to the sluggish economic growth under the previous Progressive Conservative government. “Decisive action is needed to right New Brunswick’s fiscal ship.”
Talking to reporters afterwards, Melanson was guarded as to what would be contained in the budget, a common parliamentary tradition.
“We’re still working on this budget, finalizing the details, and certainly March 31 will be a day all of us, all of New Brunswickers, will see a budget where there will be difficult decisions made. But it’s going to get us closer to the $500 million to $600 million of expenses or revenues that will be identified in the strategic program review. We want to be in a situation where we’ve got some predictable revenue streams and expenses under control.”
Tory Opposition leader Bruce Fitch said in the house it was good to see the minister finally “get his act together” on the budget date. But he said his math didn’t add up: the Liberals say there’s a structural deficit of $400 million and are looking for up to $600 million in cuts by 2016.
“They’re out there trying to close schools and close hospitals, putting fear into the hearts of people,” Fitch said.
In media scrums, the Opposition leader blamed New Brunswick’s ongoing budget problems on the Liberal government that reigned between 2006 and 2010. That’s when a string of six successive budget deficits began, a situation that continued under the Tory government of David Alward, of which Fitch was a cabinet minister between 2010 and 2014.
The former Liberal government cut income taxes steeply and had planned to hike the HST to make up the revenue shortfall, arguing that sales taxes were less harmful to the economy than income taxes. But the HST hike never happened.
“Those were two things that should have gone hand in hand,” Fitch said. “They did one, not the other, probably because of political pressure. That caused the structural deficit we still have today.”
The leader said the Tories made it clear in their election platform last September an HST hike was unnecessary because there were other means to cut expenses and increase revenues. He hinted a sales tax increase was the Liberals’ preferred option.
Melanson shrugged off Fitch’s suggestion an HST hike was going to happen sooner or later under the Liberals.
Green Party leader David Coon said it was good to see uncertainty had been removed about the budget date, after the Liberals initially said several weeks ago they might have to wait until Ottawa posts its budget in April.
Melanson has since said the province has the figures it needs from the federal government to come up with good budget numbers, which are estimates of provincial government spending from spring 2015 to spring 2016.
I, for one, am looking forward to hearing the estimates, department by department, so we can examine what the consequences of what this budget will be for New Brunswick communities,” Coon said.