NLIS 5
March 12, 2004
(Executive Council)
(Finance)

 

Minister refutes Opposition Leader�s comments

Loyola Sullivan, Minister of Finance and President of Treasury Board, today said the Opposition Leader is once again trying to mislead the public about the province�s debt expenses.

"The letter sent to the opposition clearly outlined that the total interest cost related to the provincial debt will be in excess of $1 billion," said Minister Sullivan. "Government will pay $551.5 million on consolidated revenue fund debt, and $61 million will be paid by crown corporations, boards and agencies. In addition, interest which will accrue on the unfunded pension liabilities and post-retirement benefits is estimated to be $330.8 million and $70 million respectfully.

"The debt expense is also confirmed by the Auditor General of our province," said Minister Sullivan. "Each year, the Auditor General measures �the extent to which a government must use revenue to pay interest costs rather than to pay for programs and services.� For the 2002-03 fiscal year, 23.9 cents of every dollar raised was spent on serving total provincial debt. For 2003-04, that number is estimated to be over 25 cents."

Minister Sullivan explained the province follows the accrual basis of accounting and, as such, must include debt associated with unfunded pension liabilities and post-retirement benefits. "Accounting standards are changing and provinces must follow an accrual basis of accounting. In fact, the previous government had started this process, and now the Leader of Opposition is trying to revert back to old standards in an attempt to mislead the people of the province on the real state of the province�s finances," he said.

"This government has inherited a serious fiscal situation, one the Opposition Leader helped to create, and it is this government who will take the necessary steps to correct it. We would never want to make a situation worse than it really is, but we must all face the realities and work together to solve the problem," said Minister Sullivan.

Media contact: Diane Keough, Communications, (709) 729-6830

2004 03 12                                        5:05 p.m.


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